Quick answer

An estate should be settled before individual properties are finally delivered, sold, or registered in the heirs’ names. The usual sequence is:

Secure the death certificate and preserve the property.
Find any will and identify every lawful heir.
Separate the surviving spouse’s own share from the deceased’s estate.
Inventory assets, debts, taxes, and expenses.
Choose extrajudicial or judicial settlement.
Determine the heirs’ legal shares.
File and pay the estate tax, obtain the BIR electronic Certificate Authorizing Registration (eCAR), pay applicable local taxes and fees, and register each transfer.
Distribute the remaining property and prepare a complete accounting.

An extrajudicial settlement is available only when the deceased left no will and no outstanding debts and all heirs can validly participate, including properly represented minors. A will must be probated. Court settlement is generally necessary when there is a will, a dispute, unresolved debt, missing heir, questionable filiation or marriage, incapacity, or a need for court-supervised administration.

Inheritance rights arise at death, but this does not authorize one heir to take, sell, or register the whole estate as personal property. Until partition, two or more heirs own the estate in common, subject to payment of the deceased’s debts. These rules appear in Articles 777 and 1078 of the Civil Code.

First secure the estate

Before discussing who receives which property, protect what exists.

Obtain several PSA-certified copies of the death certificate.
Locate the original will, if any. Do not destroy, alter, or conceal it.
Secure titles, tax declarations, condominium certificates, deeds, stock certificates, passbooks, vehicle records, insurance policies, loan documents, business records, and digital account information.
Notify banks, insurers, corporations, cooperatives, pension administrators, tenants, and business partners as appropriate.
Continue essential payments such as property taxes, insurance, condominium dues, security, necessary repairs, and loan installments when funds and authority permit.
Photograph valuable personal property and prepare a dated inventory.
Record all rents, dividends, collections, withdrawals, expenses, and property taken into anyone’s custody.
Preserve messages and documents about prior donations, advances, loans, possession, ownership, and promises to heirs.

No heir should secretly withdraw funds, collect rent without accounting, change locks to exclude co-heirs, transfer vehicles, or sell land as though solely owned. A co-heir may generally deal with an undivided hereditary interest, but cannot convey the other heirs’ interests; the effect of a transfer is limited to what may eventually be allotted to that co-heir under Articles 493 and 1078 of the Civil Code.

Determine what actually belongs to the estate

The deceased’s name appearing on a title is important but is not always the end of the ownership inquiry. Establish:

whether the property was exclusive, conjugal, community, or co-owned property;
when and how it was acquired;
the spouses’ marriage date and marriage settlements, if any;
whether it was inherited or donated exclusively to one spouse;
whether another person supplied the purchase price or owns a documented share;
whether the asset was mortgaged, pledged, leased, or subject to litigation; and
whether a beneficiary designation or special law governs payment outside the estate.

For a married decedent, liquidate the applicable property regime first. The surviving spouse’s own net share is not an inheritance from the deceased. Only the deceased’s share, plus exclusive property and other transmissible rights, enters the hereditary estate.

Where Articles 103 or 130 of the Family Code apply, community or conjugal property must be liquidated in the estate proceeding or extrajudicially within six months from death if no court proceeding is instituted. A disposition or encumbrance after that period without the required liquidation may be void. This is especially important if the surviving spouse plans to remarry or sell common property.

A corporation’s property is not automatically the shareholder’s estate property. Ordinarily, the estate includes the deceased’s shares, not land or equipment owned by the corporation itself.

Identify every heir before calculating shares

Collect civil-registry and court records that establish family relationships:

PSA birth, marriage, and death certificates;
adoption orders and records;
judgments concerning annulment, nullity, legal separation, filiation, or presumptive death;
proof of acknowledged or judicially established filiation;
records of children or descendants who died before the decedent; and
documents concerning prior marriages and children from each relationship.

Do not rely only on the names known to the relative preparing the papers. An omitted child, spouse, descendant, or other heir can challenge a settlement, and an extrajudicial settlement does not bind someone who did not participate or had no notice.

If there is a will

The original will must be presented for probate. No will passes real or personal property unless proved and allowed by the proper court under Rule 75 of the Rules of Court.

Even a valid will cannot ordinarily defeat the legitimes reserved for compulsory heirs. Under Article 887 of the Civil Code, compulsory heirs may include legitimate children or descendants, legitimate parents or ascendants when applicable, the surviving spouse, and legally established nonmarital children. The will governs only within the limits allowed by law.

A foreign will may require allowance in the Philippines before it can affect Philippine property.

If there is no will

Intestate succession applies. In broad terms:

Children and qualifying descendants are ordinarily first in the direct descending line.
A surviving spouse and legally established nonmarital children may inherit together with legitimate descendants.
Legitimate parents or ascendants inherit when there are no legitimate descendants, subject to the concurrent rights of the surviving spouse and nonmarital children.
In the absence of descendants, ascendants, and nonmarital children, the surviving spouse may inherit alone or together with brothers, sisters, nephews, or nieces, depending on who survives.
More remote collateral relatives may inherit only within the limits fixed by law.
The State succeeds only when there is no person legally entitled to inherit.

The exact shares cannot safely be calculated by simply dividing the estate by the number of relatives. Marriage, filiation, adoption, representation of a predeceased heir, full- or half-blood relationship, disinheritance, unworthiness, prior donations, repudiation, and the existence of a will can change the result. Recent Supreme Court rulings have also addressed Article 992’s treatment of nonmarital relatives, making document-specific advice important in affected families.

Muslim estates may be governed by the Code of Muslim Personal Laws. Indigenous customary law, foreign citizenship or domicile, foreign property, and land-ownership restrictions can also require a different analysis.

Choose the correct settlement procedure

Situation	Usual procedure
One heir, no will, and no outstanding debts	Affidavit of self-adjudication
Several heirs, no will, no outstanding debts, and valid agreement among all heirs	Deed of extrajudicial settlement
Heirs disagree but administration is unnecessary	Action for partition may be appropriate
There is a will	Judicial probate and testate settlement
No will, but there are debts, disputes, missing heirs, contested ownership, or a need for an administrator	Judicial intestate settlement
Gross estate does not exceed ₱10,000	Rule 74 technically provides a judicial summary-settlement procedure, although this statutory threshold is now rarely practical

For judicial probate, Republic Act No. 11576 assigns first-level courts jurisdiction when the gross estate does not exceed ₱2 million and Regional Trial Courts when it exceeds ₱2 million. Venue is generally where the Philippine resident decedent lived at death; for a nonresident, it may be where estate property is located. See Republic Act No. 11576 and Rule 73 of the Rules of Court.

Requirements for an extrajudicial settlement

Rule 74 allows an extrajudicial settlement when:

the deceased left no will;
there are no outstanding estate debts;
all heirs participate;
all heirs are adults with legal capacity, or minors are represented by duly authorized judicial or legal representatives; and
the settlement is executed as a public instrument and filed with the proper Registry of Deeds.

If there is only one heir, the heir may use an affidavit of self-adjudication.

The deed should accurately state the death, heirs, family relationships, property, liabilities, ownership character, agreed partition, and representations required by the receiving agencies. Every heir should sign personally or through a valid special power of attorney. Documents executed abroad generally require the applicable apostille or Philippine consular authentication.

The settlement must be published in a newspaper of general circulation once a week for three consecutive weeks. Publication is not a substitute for including or directly notifying a known heir.

A bond equal to the value of the personal property involved, as certified under oath, is required under Rule 74. The current LRA Citizen’s Charter lists an heir’s bond for an extrajudicial settlement involving registered land and personal property. The LRA also requires a court order approving the settlement when minors are involved, so representative authority should be confirmed before execution.

Rule 74 presumes that the deceased left no debts if no creditor petitions for letters of administration within two years after death. It also permits certain claims against distributees within the two-year period. That period is not a universal cure for fraud, forgery, concealment, or exclusion of an heir. The rule expressly says the settlement is not binding on a person who did not participate or had no notice.

Inventory and value the estate

Prepare one working schedule showing:

each asset and supporting ownership document;
ownership classification—exclusive, community, conjugal, or co-owned;
value at the date of death;
liens, mortgages, unpaid taxes, and other claims;
income and expenses after death;
the surviving spouse’s share;
the amount entering the hereditary estate; and
the proposed recipient of each asset.

For land, obtain the title, tax declarations for land and improvements, assessed value, BIR zonal value applicable at death, real-property-tax records, survey or technical description when relevant, and information about occupants and leases.

For financial assets, request date-of-death certifications from banks, brokers, corporations, cooperatives, insurers, and fund administrators. For vehicles, obtain registration and valuation records. For a business, preserve books, permits, contracts, receivables, liabilities, and ownership records.

Property should not be distributed until valid debts, taxes, settlement expenses, and appropriate reserves are addressed. The heirs’ liability for inherited obligations is generally limited by the value of the inheritance, but premature distribution can expose recipients to recovery claims.

Calculate estate tax before final distribution

The estate-tax law in force on the date of death generally controls. For deaths on or after January 1, 2018, the principal rules under the TRAIN Law and BIR Revenue Regulations No. 12-2018 include:

Item	General rule
Rate	6% of the net taxable estate
Valuation date	Date of death
Return deadline	Within one year from death
Extension to file	Up to 30 days in meritorious cases, upon approval
CPA-certified statement	Required when the gross estate exceeds ₱5 million
Standard deduction	₱5 million for a citizen or resident; ₱500,000 for a nonresident alien
Family-home deduction	Up to ₱10 million, subject to legal and documentary requirements
Cash-installment period	Up to two years from the statutory payment date, subject to BIR requirements
Hardship extension to pay	Up to five years for judicial settlement or two years for extrajudicial settlement, upon approval; interest and possible bond requirements apply

The estate-tax return is required for taxable transfers and, regardless of gross value, when the estate includes registered or registrable property—such as land, a vehicle, or shares—for which BIR authority is needed to transfer ownership. A zero-tax computation therefore does not always mean that no return or eCAR is needed.

The taxable estate is not simply the total market value of the property. Allowable deductions may include properly documented claims against the estate, unpaid mortgages and taxes accrued at death, qualifying casualty losses, property previously taxed, transfers for public use, the family home, the standard deduction, qualifying retirement benefits, and the surviving spouse’s net share. Requirements vary, and unsupported family loans or estimated expenses may be disallowed.

Late filing or payment can result in the applicable surcharge, interest, and compromise penalties. Rates may depend on the period involved and the estate’s taxpayer classification, so request a written BIR computation instead of estimating penalties informally.

If the estate has insufficient cash

Possible lawful options include:

applying for installment payment;
requesting an extension based on undue hardship;
requesting approval for a partial disposition of estate property and applying the proceeds to estate tax; or
for a withdrawal made within one year from death, asking the bank about the procedure under Section 97 of the Tax Code and BIR rules, which may allow withdrawal from the deceased’s deposit subject to 6% final withholding tax.

A bank withdrawal subjected to that final withholding tax is treated separately under the BIR rules. Obtain the estate TIN, comply with the bank’s documentary requirements, and secure the withholding certificate.

Estate-tax amnesty status

The statutory period for new estate-tax-amnesty applications under Republic Act No. 11956 has ended. It covered qualifying estates of persons who died on or before May 31, 2022; the filing period closed in June 2025. Do not assume that a new amnesty application remains available.

For a valid amnesty application filed and initially paid by the accepted June 2025 deadline, BIR Revenue Memorandum Circular No. 33-2026 clarifies that:

there is no deadline for submitting proof of judicial or extrajudicial settlement;
that proof is nevertheless required before an eCAR can be issued;
previously approved installments may run within the allowed two-year period; and
missing an approved installment deadline can forfeit the amnesty for properties not fully settled.

Families with an old filing should have the RDO verify its status before making further payments or executing a new deed.

Obtain the BIR eCAR

The estate normally needs its own TIN and BIR Form No. 1801, supporting schedules, proof of payment, and the documents listed for each kind of property. Coordinate with the RDO handling the estate’s one-time transaction. Although general tax filing and payment rules have become more flexible, ONETT computation and eCAR processing still follow BIR jurisdiction and documentary rules.

Typical supporting documents include:

death certificate;
estate and heirs’ TINs;
will and probate papers, deed of extrajudicial settlement, affidavit of self-adjudication, or court order;
titles and tax declarations;
date-of-death bank, investment, stock, vehicle, and business certifications;
marriage and birth records;
proof for every claimed deduction;
CPA-certified statement when required; and
proof of tax filing and payment.

An eCAR is the BIR authority needed for the transfer of registered property. Under Revenue Regulations No. 12-2024, an eCAR remains valid from issuance until presented to the appropriate Registry of Deeds or other registering agency, subject to the regulation’s verification rules. The BIR’s current starting point for checklists is its Estate Tax page.

Transfer land and other registered assets

For registered land, the Registry of Deeds commonly requires:

owner’s duplicate title;
deed of extrajudicial settlement, affidavit of self-adjudication, or final court order;
BIR eCAR;
real-property-tax clearance;
current certified tax declarations;
local transfer-tax receipt or clearance;
affidavit of publication for an extrajudicial settlement;
heir’s bond when applicable;
court approval when a minor is involved; and
identification, authority, and other property-specific clearances.

Agricultural land may require Department of Agrarian Reform documents. Condominium property, untitled land, lost titles, adverse claims, mortgages, annotations, pending cases, and foreign heirs require additional review.

The Local Government Code allows a province to impose real-property transfer tax up to 0.5% of the applicable value; a city may impose up to 50% more than the provincial maximum. The governing ordinance fixes the actual rate. Section 135 directs the executor or administrator to pay within 60 days from death. Because many estates miss this unusually early deadline, obtain a formal computation of local penalties or available relief from the treasurer where the land is located.

After Registry of Deeds registration, update the tax declaration with the assessor. Keep certified copies of the deed, new title, eCAR, tax receipts, publication, and registration receipt.

For other assets, complete the requirements of the relevant institution:

corporation or stock-transfer agent for shares;
bank or investment provider for deposits and securities;
Land Transportation Office for vehicles;
cooperative for membership interests;
intellectual-property or licensing agency for registered rights; and
business regulators and local licensing offices for a sole proprietorship or enterprise.

Make the actual partition

The heirs may, within legal limits, divide the estate by:

assigning a separate property to each heir;
keeping property in co-ownership with a written management arrangement;
subdividing land when legally and technically possible;
adjudicating an indivisible asset to one heir who pays the others a balancing amount; or
selling an asset and dividing the net proceeds.

Record valuations and equalization payments. Account for rents, harvests, dividends, necessary expenses, damage, and personal property already received by an heir.

An unequal partition, waiver, or transfer to only one heir can have donor’s-tax consequences if it gives away value beyond that heir’s lawful share. An extrajudicial settlement combined with a sale also creates a separate sale transaction with its own taxes and registration requirements. Labeling a transfer a “waiver” does not determine its tax treatment.

Before closing the estate, provide each heir with a final accounting and copies of the settlement, tax returns, eCARs, receipts, titles, and turnover records.

Common mistakes to avoid

Naming only the cooperative heirs and excluding someone who may have a legal share.
Using an affidavit of self-adjudication when more than one heir exists.
Executing an extrajudicial settlement despite a will or unpaid creditor.
Treating all property in the deceased’s name as exclusively owned.
Dividing community or conjugal property without first determining the surviving spouse’s share.
Assuming publication cures failure to include a known heir.
Assuming the two-year Rule 74 period eliminates every omitted-heir or fraud claim.
Calculating inheritance shares by equal headcount without checking filiation and representation.
Using current property value instead of the legally required date-of-death value for estate tax.
Claiming deductions without contemporaneous proof.
Missing the one-year BIR return deadline or the local transfer-tax deadline.
Distributing cash before reserving funds for debts, tax, registration, and litigation.
Selling a specific parcel through one heir without authority from the others.
Signing a waiver without checking donor’s tax and legitime consequences.
Settling only the latest death when the title remains in the names of grandparents or earlier decedents. Each succession in the chain must be addressed.

When legal or tax help is urgent

Consult a Philippine succession lawyer and, when tax computations are involved, a qualified tax professional promptly if:

an original will exists or may have been lost, destroyed, or concealed;
a person is threatening to sell, mortgage, withdraw, or hide estate property;
there is a foreclosure, tax sale, eviction, prescription issue, or court deadline;
an heir was omitted or a signature appears forged;
paternity, adoption, marriage, legitimacy, or citizenship is disputed;
an heir is a minor, incapacitated, missing, or abroad;
the estate has significant debts or may be insolvent;
a creditor has made a demand or filed a case;
the deceased owned a business, corporate shares, agricultural land, foreign property, or property under litigation;
several deceased owners remain in the chain of title;
the family wants to sell property before paying the estate tax;
a BIR assessment, denial, or amnesty-installment issue exists; or
the heirs cannot agree on possession, valuation, sale, or partition.

Frequently asked questions

Can the heirs divide the estate immediately after death?

Inheritance rights arise at death, but final division should follow identification of all heirs, liquidation of marital property, payment or provision for debts and taxes, and the required settlement and registration procedures.

Can one heir sell inherited land?

One heir cannot validly sell the other heirs’ interests without authority. Before partition, a co-heir may generally transfer only an undivided hereditary interest, subject to the rights of co-heirs and the result of partition.

Is a notarized extrajudicial settlement enough?

No. It must meet Rule 74, publication, BIR, local-tax, bond, and registration requirements. Notarization alone does not transfer a registered title or bind an omitted heir.

Must every heir sign?

For a consensual extrajudicial settlement, every heir must validly participate personally or through proper authority. If agreement cannot be obtained, judicial remedies may be necessary.

Can there be an extrajudicial settlement when the deceased left a will?

Not under Rule 74’s no-will procedure. The will must first be proved and allowed by the proper court.

Is estate tax always 6%?

The 6% regular rate applies to deaths on or after January 1, 2018 and is imposed on the net taxable estate, not automatically on the gross property value. Earlier deaths are governed by the law effective at the date of death unless a valid amnesty filing applies.

What if no estate tax is due?

A return and eCAR may still be required when registered or registrable property must be transferred. A zero-tax estate is not automatically exempt from filing and registration procedures.

Can the family use estate property to pay the tax?

Possibly. BIR rules allow approved installment arrangements and partial disposition of estate property in qualifying cases. Do not sell first and seek approval later.

What happens if an heir refuses to divide the property?

A co-heir generally may demand partition. If agreement is impossible, an action for partition or judicial estate proceeding may be filed, depending on the circumstances.

Does publication prevent an omitted heir from claiming later?

No. Rule 74 states that an extrajudicial settlement is not binding on a person who did not participate or had no notice. The applicable remedy and deadline depend on the facts, including fraud, registration, possession, disability, and the relief sought.

Official references

This article provides general Philippine legal information, not legal advice or a calculation of any person’s inheritance or tax liability. Results depend on the will, civil-registry records, ownership documents, date of death, family relationships, debts, property locations, and applicable special laws. Official sources and procedures were checked as of August 6, 2026.