Proper Format for an Extrajudicial Settlement of Estate in the Philippines
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Philippine inheritance laws are complex; always consult a licensed Philippine lawyer or the Register of Deeds/BIR for your specific case.
1. What Is an Extrajudicial Settlement?
An extrajudicial settlement (EJS) is a private agreement in which the heirs of a deceased person (“decedent”) divide the estate among themselves without opening a court case. It is governed primarily by:
| Source | Key Provision |
|---|---|
| Rule 74, Rules of Court | §§ 1–4 detail the conditions, publication, bond & liability periods. |
| Civil Code | Arts. 776–1106 (succession), especially Arts. 960–1101 (intestate succession & partition). |
| Tax Code (NIRC) | Estate-tax return, deadlines, penalties. |
| Land Registration Act / PD 1529 | Requirements to register the deed and secure new Torrens titles. |
2. Four Absolute Preconditions under Rule 74 §1
- No Will (Intestate). The decedent left no valid last will or the will was not probated.
- No Outstanding Debts. All liabilities are paid or none exist; heirs must swear to this.
- Heirs of Legal Age. Every heir is ≥ 18 years old or minors are represented by court-appointed guardians.
- Agreement of All Heirs. Partition must be unanimous; dissenting heirs force a judicial settlement.
If any precondition is missing, a probate or intestate court proceeding is mandatory.
3. Types of Extrajudicial Instruments
| Instrument | When Used | Parties | Publication? |
|---|---|---|---|
| Affidavit of Self-Adjudication (ASA) | Only one heir (sole descendant or via valid waiver). | Sole heir | Yes, 3 weeks |
| Deed of Extrajudicial Settlement (DEJS) | Two or more heirs, with or without simultaneous waiver. | All heirs | Yes, 3 weeks |
| DEJS with Sale/Donation | Heirs simultaneously transfer property to a buyer/donee. | Heirs + buyer/donee | Yes, 3 weeks |
4. The Proper Format (Checklist)
Below is a universally accepted structure. Use official, concise legal language and print on bond paper (8½ × 13 in) to match notarial protocol.
Title
- “Affidavit of Self-Adjudication” or
- “Deed of Extrajudicial Settlement of Estate of the Late [Name]”
Appearance/Parties Clause
- Personal details of each heir: full name, marital status, citizenship, residence.
- Jurat location (e.g., “BEFORE ME, a Notary Public for … personally appeared …” with valid IDs).
Recitals (Whereas Clauses)
- Death facts: full name of decedent, date & place of death, Certificate of Death reference.
- Intestacy: explicit statement that the decedent left no will.
- Heirship: list and relationship of each heir; affirm they are all of legal age or duly represented.
- Debts: categorical statement that “the Estate has no outstanding obligations” or that “all liabilities have been fully settled.”
Inventory of the Estate
- Real Properties: TCT/CCT numbers, lot/plan nos., area, location, tax declarations.
- Personal Properties: bank accounts (bank, account no., balance), motor vehicles (MV file no., plate), shares, jewelry, receivables.
- Valuations: use fair market value (FMV) - zonal or assessor’s, whichever is higher, for tax computations.
Terms of Partition
- Manner of Division: detailed allocation (e.g., “Lot 1, TCT 123456 to Heir A” … “50 % share in BDO acct. # xxxx to Heir B”).
- Waiver/Conveyance: if an heir waives rights or sells property, insert clear transfer language.
- Bonds (if personal property): statement that the required bond under Rule 74 §1 has been posted (usually filed with the Register of Deeds).
Publication Undertaking
- “The parties undertake to cause the publication of this Deed once a week for three (3) consecutive weeks in a newspaper of general circulation in [Province/City] in accordance with Rule 74 §1, at their own expense.”
Liability Clause under Rule 74 §4
- Acknowledge that heirs remain personally liable to any lawful creditor or other heir for two (2) years from publication.
Signatures & Acknowledgment
- Sign above printed names.
- Include thumbmarks for heirs who sign by mark.
- Finish with a Notarial Acknowledgment (2020 Rules on Notarial Practice form).
Annexes (usually as separate pages)
- Certified true copy of Death Certificate.
- Certified true copies of titles, tax decs, ORs, CTCs of IDs, proofs of payment of debts/taxes, guardianship orders for minors.
5. Three Mandatory Post-Execution Steps
| Step | Where | Key Actions / Fees |
|---|---|---|
| A. Publication | Accredited newspaper | Publish full text or an abstract (common practice: “Notice of Extrajudicial Settlement and Distribution…”) 1×/week for 3 weeks. Secure Affidavit of Publication. |
| B. Tax Clearance | BIR RDO where decedent resided at death | File Estate Tax Return (BIR Form 1801) within 1 year or extension; pay Estate Tax (6 % of net estate) + DST + ₱ 15 certification, then obtain CAR (“CAR-E”/eCAR). |
| C. Registration | Register of Deeds (real property) or LTO/SEC/banks (personal property) | Submit DEJS/ASA + CAR + Affidavit of Pub. + Owner’s Duplicate Titles. Pay registration fees & IT fee. New TCTs/CCTs issued in heirs’ names. |
6. Common Pitfalls & How to Avoid Them
| Pitfall | Consequence | Mitigation |
|---|---|---|
| Unpaid debts discovered later | Creditor may sue heirs → settlement annulled | Perform thorough asset–liability inventory; obtain creditors’ quitclaims. |
| Failure to publish | EJS not binding on 3rd parties; Register of Deeds may refuse registration | Budget for publication and attach Affidavit of Publication. |
| Minor heirs overlooked | Settlement voidable; court may nullify | Secure Guardianship Order & court-approved bond; guardian must sign. |
| Estate tax not paid | 25 % surcharge + 12 % interest p.a.; no CAR, no transfer | File & pay before executing deeds; petition BIR for installment if needed. |
| Error in technical description | Title cannot be transferred | Get latest certified true copy (CTC) from RD; engage licensed geodetic engineer if needed. |
| Ignoring 2-year liability | Heirs sued within 2 years for omitted properties/creditors | Keep proofs of debt payments & inventory; consider escrow. |
7. Frequently Asked Questions (FAQ)
Can we still do an EJS if there is a will? No. The will must undergo probate. Heirs may later agree to waive or redistribute shares after probate, but the estate settlement itself must be through court.
Must the deed be executed within a specific deadline? Filipino law imposes no deadline for executing the DEJS itself, but the BIR estate-tax return is due within one (1) year from death (extension possible). Penalties accrue even if the partition is delayed.
Is a bond always required? Yes, if personal property is involved. For purely real-property estates, Register of Deeds practice varies; many waive the bond if no personal property is listed.
What if an heir lives abroad? They may execute a SPA & Consularized Special Power of Attorney authorizing a Philippine resident-agent to sign; or sign the deed abroad and have it apostilled/consularized.
Can we use one newspaper for multiple provinces? The newspaper must have general circulation in the province where the property is located; use separate notices if properties span several provinces.
How do we deal with foreign assets? Philippine EJS covers domestic assets. Foreign assets follow the situs country’s succession laws; coordinate with counsel in that jurisdiction.
8. Sample Outline (Skeleton)
DEED OF EXTRAJUDICIAL SETTLEMENT OF ESTATE
OF THE LATE JUAN D. CRUZ
KNOW ALL MEN BY THESE PRESENTS:
This Deed, made and executed by:
1. MARIA C. REYES, Filipino, of legal age, single, residing at …
2. PEDRO C. CRUZ, Filipino, of legal age, married to …
WITNESSETH:
WHEREAS, Juan D. Cruz (“Decedent”) died intestate on 14 March 2025 in Makati City;
WHEREAS, the parties are his sole heirs, as evidenced by Birth Certificates annexed hereto;
WHEREAS, the estate has **no outstanding debts**, all obligations having been paid …
I. INVENTORY OF REAL PROPERTIES
a) TCT No. 123456, Lot 4, Block 2, Brgy. San Lorenzo, Makati, 250 sqm …
II. PERSONAL PROPERTIES
a) BDO SA #001-000123-45 with balance ₱ 1,200,000.00 …
III. PARTITION
1. Lot 4 (TCT 123456) to MARIA C. REYES
2. BDO SA … to PEDRO C. CRUZ …
IV. PUBLICATION & BOND
The parties undertake publication and have posted a bond of ₱ _______.
IN WITNESS WHEREOF, …
(Signatures & Notarial Acknowledgment)Tip: Attach a simple Lot Partition Plan and Estate-Distribution Table to avoid future boundary or share disputes.
9. Judicial vs. Extrajudicial Settlement (At a Glance)
| Feature | Extrajudicial | Judicial (Court-Supervised) |
|---|---|---|
| Speed | 1–6 months (depends on taxes & RD) | 1–5 years (probate/intestate) |
| Cost | Lower (no filing fees, limited lawyer’s fees) | Higher (docket fees, publication, administrator’s fees) |
| Transparency | Private agreement | Public record; court approval |
| When allowed | Only if Rule 74 §1 met | Always available |
| Risk | Heirs bear 2-year personal liability; mistakes harder to correct | Court order confers finality; creditor claims resolved in probate |
10. Best Practices Checklist
- Collect all titles, CARs, tax decs, bank statements before drafting.
- Verify that estate tax & DST are computed on correct FMV/zonal values.
- Guardianship: Secure court order prior to signing if any heir is a minor/incapacitated.
- Third-Party Waivers: Get notarized quitclaims from known creditors/claimants.
- Publish promptly; file a copy of the newspaper pages + affidavit at RD/BIR for CAR release.
- Photocopy everything (stamped receipts, proofs of payment) for each heir’s file.
- Schedule RD visit early; many RDs require appointment slots.
- Keep the originals of newspaper clipping & Affidavit of Publication for at least 5 years.
- Monitor the 2-year liability window (diary or calendar alert).
11. Conclusion
An Extrajudicial Settlement is an efficient way of transferring a Philippine estate when all statutory conditions are met. The key lies in meticulous preparation—complete documentation, proper deed format, timely tax compliance, and faithful observance of Rule 74’s publication and bond requirements. By following the structure and safeguards outlined above, heirs can avoid the delays and expenses of court proceedings while ensuring a legally sound partition of their loved one’s legacy.
Prepared 2 August 2025, Asia/Manila