Quick answer

An estate should be settled before inherited property is divided or transferred. The usual order is:

Identify every heir, asset, debt, and any valid will.
Liquidate the spouses’ community or conjugal property, if applicable.
Choose extrajudicial settlement only if its legal conditions are met; otherwise, go through court.
File and pay the correct estate tax and obtain the BIR’s electronic Certificate Authorizing Registration (eCAR).
Pay applicable local taxes and registration charges.
Partition only the net estate, then transfer titles and other records to the heirs.

Heirs acquire succession rights from the moment of death, but before partition they generally own the estate in common, subject to the decedent’s debts. A title cannot safely be transferred merely through a private family agreement. The settlement must comply with the Civil Code, the Rules of Court on estate settlement, tax law, and the requirements of each property registry.

Start with the correct estate

The estate is not automatically everything registered in the decedent’s name. It includes the decedent’s transmissible property, rights, and obligations, but ownership must first be checked.

For a married decedent, determine the applicable property regime—absolute community, conjugal partnership of gains, or complete separation of property. Prepare separate inventories of:

Community or conjugal property;
The decedent’s exclusive property; and
The surviving spouse’s exclusive property.

After common debts and required reimbursements are accounted for, the surviving spouse ordinarily receives his or her own net share of the community or conjugal property. That share is not an inheritance. Only the decedent’s share, together with the decedent’s exclusive property, enters the hereditary estate.

Under Articles 103 and 130 of the Family Code, if there is no judicial estate proceeding, the surviving spouse must liquidate the community or conjugal property judicially or extrajudicially within six months from death. A later disposition or encumbrance of unliquidated common property may be void.

Build a complete inventory

Before anyone signs a settlement, make one working inventory showing ownership, value at death, supporting documents, income received after death, and outstanding obligations.

Assets to check

Land, houses, condominium units, and improvements;
Bank deposits, time deposits, investments, and safe-deposit contents;
Shares of stock, partnership interests, and business assets;
Vehicles, vessels, firearms, jewelry, and valuable personal property;
Receivables, insurance proceeds payable to the estate, refunds, and claims;
Intellectual-property rights and digital assets;
Property located abroad; and
Property still registered in an earlier decedent’s name.

If a parent or other heir died before the older estate was settled, there may be two or more estates to process in sequence. Do not skip an intermediate deceased owner.

Debts and charges to check

Mortgages and secured loans;
Personal and business loans;
Unpaid taxes and real-property taxes;
Final medical and funeral accounts;
Court judgments and pending claims;
Expenses necessary to preserve or administer estate assets; and
Community or conjugal obligations.

Do not distribute cash or sell valuable property until reasonably identifiable obligations have been addressed. An heir’s liability through succession is generally limited by the value of what the heir receives, but premature distribution can expose distributees to repayment claims.

Preserve the evidence

Secure originals or certified copies where available, and keep a scanned backup of:

PSA death, marriage, and birth certificates;
Adoption orders and proof of filiation;
The original will, codicils, and any envelope or custody record;
Land titles, condominium titles, tax declarations, surveys, and deeds;
Bank, stock, insurance, vehicle, and business records;
Marriage settlements and prior judgments affecting marital status or property;
Loan agreements, mortgages, receipts, tax returns, and notices;
Records of rent, crops, dividends, withdrawals, and expenses after death;
Communications identifying heirs or showing a disputed transfer; and
Photographs and an inventory of valuable movable property.

No heir should conceal, destroy, alter, or privately surrender an original will. A will is not self-executing: Article 838 of the Civil Code requires it to be proved and allowed by the proper court before it can pass property.

Choose the proper settlement route

Extrajudicial settlement

Section 1, Rule 74 allows an extrajudicial settlement only when:

The decedent left no will;
There are no outstanding estate debts;
All heirs are known and agree;
All heirs are adults, or minors are represented by judicial or legal representatives duly authorized for the settlement; and
The required public instrument, publication, registration, and bond requirements are satisfied.

All heirs should be included. If there is only one heir, that heir may execute an affidavit of self-adjudication. If there are several heirs, they execute a notarized public instrument commonly called a Deed of Extrajudicial Settlement and Partition.

The fact of settlement must be published once a week for three consecutive weeks in a newspaper of general circulation. The instrument must be filed with the proper Register of Deeds when real property is involved. Rule 74 also requires a bond, filed with the Register of Deeds, equal to the sworn value of the personal property covered by the settlement.

Publication does not cure the deliberate omission of an heir. Rule 74 expressly states that an extrajudicial settlement is not binding on a person who did not participate or had no notice.

Rule 74 creates a two-year period during which distributed real property and the required bond remain charged for certain claims of creditors and persons deprived of their lawful participation. That provision should not be treated as permission to conceal an heir or as an absolute guarantee that every fraud, minority, lack-of-notice, or ownership claim disappears after two years.

Judicial settlement

Court settlement is generally necessary when:

There is a will requiring probate;
The will’s validity or meaning is disputed;
Heirs disagree on identity, shares, valuation, management, or partition;
A purported heir’s filiation or adoption is contested;
There are unresolved debts or creditor claims;
An heir is missing, incapacitated, inadequately represented, or has interests conflicting with a representative;
Estate property must be sold or administered under court authority; or
Extrajudicial settlement would prejudice a creditor or an omitted heir.

The petition is ordinarily filed where the decedent resided at death. For a nonresident decedent, it may be filed where Philippine estate property is located. Under Republic Act No. 11576, first-level courts have probate jurisdiction when the gross estate does not exceed ₱2 million; the Regional Trial Court has jurisdiction when it exceeds ₱2 million.

The court may allow the will, appoint an executor or administrator, require an inventory, receive claims, approve necessary sales, settle accounts, and order final distribution. For ordinary money claims in judicial administration, the court fixes a claims period of not less than six nor more than twelve months from the first publication of the notice to creditors, subject to the exceptions in Rule 86.

Rule 74 also retains a special court procedure for estates with a gross value not exceeding ₱10,000. Because that threshold is extremely low, it has limited modern use and should not be confused with the ₱2 million jurisdictional boundary between first- and second-level courts.

Determine the heirs and their lawful shares

The applicable succession law depends on whether there is a valid will.

If there is a will

The will controls only to the extent permitted by law. It cannot impair the legitime, or reserved share, of compulsory heirs. These may include legitimate or adopted children and descendants, legitimate parents or ascendants in default of legitimate descendants, the surviving spouse, and duly proven illegitimate children.

The legitimate children’s collective legitime is generally one-half of the hereditary estate. The spouse’s and illegitimate children’s reserved shares are computed under additional Civil Code rules and may come from the disposable portion. Exact figures depend on the complete combination and number of heirs, prior donations subject to collation, disinheritance, preterition, representation, and the will’s terms.

A child adopted under Philippine law is considered a legitimate child of the adopter for succession purposes under Republic Act No. 11642. A stepchild who was never legally adopted does not become an intestate heir merely through the stepparent relationship.

If there is no valid will

The following are common intestate results after marital-property liquidation, debts, and estate charges:

Surviving heirs	General intestate allocation
Legitimate or adopted children only	They divide the estate equally, subject to representation by descendants where legally applicable.
Surviving spouse and legitimate or adopted children only	The spouse receives the same share as each child.
Surviving spouse and illegitimate children only	The spouse receives one-half; the illegitimate children collectively receive one-half.
Legitimate ascendants and surviving spouse, with no descendants	The ascendants collectively receive one-half; the spouse receives one-half.
Legitimate ascendants and illegitimate children, without a spouse or legitimate descendants	Each group collectively receives one-half.
Surviving spouse and brothers, sisters, nephews, or nieces, with no descendants, ascendants, or illegitimate children	The spouse receives one-half; the qualifying collateral relatives receive one-half.
Surviving spouse alone, with none of the competing heirs recognized by law	The spouse receives the estate.
No descendants, ascendants, illegitimate children, or spouse	Qualifying collateral relatives inherit according to degree, full or half blood, and representation rules, generally only up to the fifth collateral degree.

Where legitimate and illegitimate children concur, an illegitimate child’s share is generally measured at one-half of a legitimate child’s share, but statutory caps and the surviving spouse’s protected share can affect the final calculation. Do not use a simple percentage calculator when both classes of children, descendants by representation, or a spouse are involved.

A cohabiting or common-law partner is not a surviving spouse for intestate succession merely because the couple lived together or had children. The partner may, however, have a separate ownership claim under the property rules governing their union. Conversely, physical separation alone does not necessarily remove a legally married spouse’s inheritance rights. A judgment of legal separation, fault, a void marriage, or competing marriages requires document-specific advice.

The Civil Code rules are not the only possible succession system. Muslim estates may be governed by the Code of Muslim Personal Laws. Foreign nationality, foreign wills, overseas assets, ancestral domains, agrarian land, and corporate restrictions may also change the analysis.

Make a workable partition

Once every lawful share is computed, the heirs can decide how to satisfy it.

Possible arrangements include:

Registering property in undivided shares;
Assigning separate properties of comparable value to different heirs;
Giving an indivisible property to one heir who pays the others the required equalization amount;
Selling property and dividing the net proceeds; or
Keeping selected property in co-ownership under a written management agreement.

Article 1086 of the Civil Code allows an indivisible or seriously impaired property to be adjudicated to one heir who pays the excess in cash. If an heir demands a public auction with outside bidders, the article generally requires it.

Record the agreed valuations, possession, rental income, expenses, improvements, and equalization payments. The Civil Code requires co-heirs to account to one another for fruits or income received, necessary and useful expenses, and damage caused through malice or neglect.

Unequal allocations need tax review. The BIR treats a general renunciation of an entire inheritance differently from a waiver directed to a named heir or a waiver of rights in selected properties. A specific or partial waiver that benefits another heir may be treated as a donation and assessed donor’s tax under BIR Revenue Memorandum Circular No. 94-2021. A surviving spouse’s waiver of his or her own community or conjugal share may likewise be a taxable donation.

Complete the estate-tax process

For deaths on or after January 1, 2018

Under the TRAIN Law and Revenue Regulations No. 12-2018:

Estate tax is generally 6% of the net taxable estate.
Property is valued as of death under the applicable valuation rules.
A citizen’s or resident’s estate receives a ₱5 million standard deduction.
The family-home deduction is limited to its qualifying value, up to ₱10 million.
The estate-tax return is generally due within one year from death.
A filing extension of no more than 30 days may be granted in meritorious cases.
A return showing a gross estate exceeding ₱5 million must include the required CPA-certified statement.
A return is required regardless of gross value when registered or registrable property needs BIR clearance for transfer.

If immediate payment would cause undue hardship, an approved payment extension may not exceed five years for a judicially settled estate or two years for an extrajudicially settled estate. If the estate lacks cash, an approved installment arrangement may be available. These are not automatic; apply with the proper BIR office before relying on them.

For an older death, the tax rates, deductions, valuation rules, and filing deadline under the law in force at death generally control. Late returns may attract surcharge, interest, and compromise penalties. Have the BIR calculate the liability using the correct historical law and any current taxpayer-classification concessions instead of applying today’s 6% rate automatically.

Practical BIR steps

Obtain a TIN for the estate, commonly using BIR Form No. 1904.
Prepare BIR Form No. 1801 or the return applicable to the date of death.
Submit the death certificate, property documents, proof of ownership and value, settlement instrument or court order, heir information, deductions, and other current documentary requirements.
File and pay through the channels allowed by current BIR rules.
Secure the eCAR for the assets to be transferred.

For processing, coordinate with the RDO having jurisdiction over the estate’s one-time transaction. For a resident decedent, this is generally tied to the decedent’s domicile at death. Special rules apply to nonresident estates. The BIR’s current Form 1801 instructions and Citizens’ Charter should be checked before submission because documentary and electronic-processing requirements can change.

The latest estate-tax amnesty is no longer open to new applicants. Its operational filing deadline was June 16, 2025. Families that timely availed may still complete their proof of settlement and eCAR processing: BIR RMC No. 33-2026 confirms that no separate deadline applies to submission of proof of settlement, although the proof is required before eCAR issuance. Undeclared properties are not automatically covered by the earlier amnesty filing.

Transfer the property records

An eCAR is a tax clearance, not a new title. For land, the heirs generally must still:

Pay the applicable local transfer tax and obtain the required receipt or clearance.
Settle real-property tax arrears and obtain a tax clearance.
Submit the settlement deed or court order, eCAR, owner’s duplicate title, current tax declaration, and other required documents to the Register of Deeds.
Pay registration fees.
Obtain the new title or titles.
Update the tax declaration with the assessor’s office.

Section 135 of the Local Government Code places the local real-property transfer tax on the transferor, executor, or administrator and states a 60-day payment period from execution of the deed or the decedent’s death. The actual rate and documentary process depend on the applicable local ordinance. Ask the provincial or city treasurer to assess any late payment rather than assuming the estate is exempt.

The Land Registration Authority lists the original registrable instrument, the latest certified tax declaration, and the owner’s copy of the title among the basic registration requirements. The particular Register of Deeds may lawfully require additional documents for the transaction.

Banks, corporations, the Land Transportation Office, insurers, and other registries have separate transfer requirements. Income earned by the estate while settlement is pending may also create income-tax and accounting obligations distinct from estate tax.

Common mistakes to avoid

Dividing only the property shown on one title while ignoring other assets and debts;
Treating the surviving spouse’s own marital-property share as part of the inheritance;
Assuming a notarized will no longer needs probate;
Omitting an illegitimate, adopted, deceased, minor, or overseas heir;
Publishing an extrajudicial settlement and assuming publication cures an omitted heir;
Using an affidavit of self-adjudication despite the existence of another heir;
Letting one heir sell the entire property when that heir owns only an undivided hereditary interest;
Using current market value or the current tax rate for an old death without checking the historical law;
Assuming the expired estate-tax amnesty remains available;
Signing a “waiver” without checking whether it creates donor’s tax;
Paying heirs before creditors, estate tax, and administration expenses;
Ignoring income, rent, crops, or withdrawals collected after death; and
Transferring possession but leaving the title and tax declaration in the decedent’s name.

When legal help is urgent

Consult a Philippine succession lawyer promptly if:

Someone may be hiding or destroying a will;
Property is being sold, mortgaged, occupied, or withdrawn without all heirs’ authority;
An heir was omitted or pressured into signing;
There are minor, incapacitated, missing, or unrepresented heirs;
Filiation, adoption, marriage, or citizenship is disputed;
A creditor has threatened foreclosure or filed a claim;
The BIR, local treasurer, or court has issued a deadline or assessment;
The title remains in the name of a grandparent or earlier decedent;
The estate includes foreign assets, agricultural land, ancestral land, corporate shares, or a business;
There are competing wills, marriages, deeds, or settlement instruments; or
The heirs cannot agree on management, sale, or partition.

FAQ

Can the heirs settle without going to court?

Yes, but only if Rule 74’s conditions for extrajudicial settlement are satisfied. A will, unresolved debt, dispute, missing heir, or inadequate representation usually makes court proceedings necessary.

Can one heir refuse to sign?

Yes. An heir cannot ordinarily be forced to sign an extrajudicial settlement. Another heir may seek judicial settlement or partition, depending on the circumstances.

Does the eldest child receive a larger share?

No. Age and sex do not create a preference among children of the same legal class.

Can heirs sell inherited land before the title is transferred?

They may enter into carefully structured settlement-and-sale arrangements, but no heir can validly sell more than the rights that heir owns. Completion of the buyer’s title ordinarily requires estate settlement, tax payment, eCAR, and registration. Obtain legal and tax advice before accepting money or signing.

Is estate tax based on today’s property value?

Generally, valuation is tied to the date of death under the law then applicable. For real property, the governing rules commonly use the higher applicable BIR value or assessor’s fair market value at that time.

What if the estate has no tax due?

A return and eCAR may still be required when the estate contains registered or registrable property. “No tax due” does not eliminate settlement and registration requirements.

Can an omitted property be added later?

Yes, but an amended or additional tax process and supplemental partition may be necessary. An omitted property from a timely amnesty return is not automatically covered by that amnesty.

Does an extrajudicial settlement expire?

The instrument does not simply disappear, but claims involving omitted heirs, fraud, lack of notice, minors, creditors, or invalid transfers can have different limitation rules. Do not rely solely on Rule 74’s two-year provision without legal review.

Official references

This article provides general legal information, not advice for a particular estate. Succession shares and tax consequences depend on the death date, marital-property regime, complete family tree, wills, titles, debts, prior transfers, and other documents. Sources and current procedures were checked as of August 3, 2026.