A comprehensive practitioner’s guide for families, executors/administrators, and counsel

I. The big picture

When a parent dies, all their property, rights, and obligations transmissible by law form a hereditary estate. Before anyone may lawfully transfer, sell, or partition assets, the estate must be settled—either judicially (through court proceedings) or extrajudicially (by public instrument), with taxes paid and creditors satisfied. Settlement is not optional: it protects heirs, creditors, and buyers, and prevents void transfers, personal liability, and later litigation.

II. Sources of law (orientation map)

Civil Code (succession, legitimes, collation, partition, co-ownership, obligations)
Family Code (property relations between spouses/partners; liquidation of community/conjugal property)
Rules of Court on special proceedings (probate, intestate proceedings, claims, sales of estate property, partition, escheat) and Rule 74 (extrajudicial settlement and affidavit of self-adjudication)
Tax Code (estate tax, filing/payment, clearances for transfers)
Related statutes on registries (Registry of Deeds, LRA), PSA civil registry, and notarial practice

Settlement has three constant pillars: (1) identify who inherits and in what shares; (2) account for and pay debts/taxes; (3) lawfully transfer title or possession.

III. First decisions: judicial vs. extrajudicial settlement

A. Extrajudicial Settlement (EJS) under Rule 74

When allowed

No will (or the will will not be probated in the Philippines);
The decedent left no unpaid debts or all known creditors are paid/waived;
All heirs are of legal age (minors are represented by a judicially appointed guardian or via court approval); and
All heirs agree on distribution.

Forms

Deed of Extrajudicial Settlement among heirs (public instrument); or
Affidavit of Self-Adjudication (if there is only one heir).

Mandatory safeguards

Publication: Once a week for three consecutive weeks in a newspaper of general circulation;
Filing and annotation: File with the Register of Deeds to annotate on titles;
Bond: For personal property involved, a bond may be required in an amount equal to its value (practice varies—prepare for it).

Two-year creditor/heir lien Any person unduly deprived may sue within two (2) years from the date of publication to enforce their claim against the estate/property—even after transfer. Keep proof of publication; annotate the EJS so buyers see the lien.

When EJS is risky or unavailable

There are contested claims or unknown creditors;
There is a minor without a guardian or a disagreement among heirs;
There is a will that needs probate;
The estate needs court authority to sell assets to pay debts/taxes.

B. Judicial Settlement (Special Proceedings)

Testate (with a will): Probate is required to establish the will’s due execution and validity before distributing property. Venue is the RTC where the decedent resided at death; if non-resident, where property is located.
Intestate (no will): File for letters of administration, appointment of an administrator, and proceed to inventory, claims, payment of debts/taxes, and project of partition.

Core judicial steps

Petition (probate or intestate) with jurisdictional facts;
Notice/publication to interested parties and creditors;
Appointment of executor (named in the will) or administrator (statutory order of preference);
Inventory & appraisal of estate;
Claims period: the court fixes a window (not less than 6 months nor more than 12 months) from first publication for creditors to file claims;
Authority for sales/encumbrances of estate property when needed;
Accounting by the personal representative;
Project of partition and decree of distribution;
Transfer of titles and closing of the estate.

Ancillary administration If the parent died abroad leaving property in the Philippines, or vice-versa, you may need ancillary proceedings to recognize a foreign probate/administration for local transfers.

IV. Determine the mass of the estate (what is included)

Exclusive vs. conjugal/community property

First liquidate the spouses’ property regime (Absolute Community or Conjugal Partnership). Deduct the surviving spouse’s share before computing inheritance.
Property proven to be exclusive (e.g., acquired before marriage, by gratuitous title with exclusion) stays outside the community.

Estate composition

Real property: land, buildings, condominium units (with titles, tax declarations)
Personal property: bank deposits, investments, vehicles, jewelry, receivables, business interests, corporate shares
Intangibles: IP, royalties, lease rights
Obligations: debts, taxes, mortgages, last illness and funeral, employee wage claims, court judgments

Fruits and accessions after death belong to the estate; post-death expenses may be chargeable subject to rules on administration.

V. Who inherits (and in what shares): compulsory heirs & legitimes

Compulsory heirs include:

Legitimate children/descendants;
Legitimate parents/ascendants (if no descendants);
Surviving spouse;
Illegitimate children/descendants;
In default of the above, succession moves to collaterals and, ultimately, escheat.

Key concepts

Legitime: the portion reserved by law for compulsory heirs; cannot be impaired by donations or testamentary dispositions.
Free portion: disposable share after satisfying legitimes.
Representation: descendants step into a predeceased child’s shoes.
Collation and reduction: advances/donations brought to the estate to protect legitimes; excessive donations may be reduced.
Disinheritance is strictly construed and must comply with legal grounds and formalities.

Practice tip: Before any partition, draft a successional scenario table showing compulsory heirs, presumptive legitimes, donations to collate, and the free portion. This avoids void “over-dispositions.”

VI. Debts and creditor protection

Order of payment prioritizes administration expenses, taxes, wages, secured obligations, then other claims as fixed by the court.
Creditor remedies: In EJS, unpaid creditors may attack the settlement within two years or pursue heirs who received assets pro rata up to the value received. In judicial settlement, claims must be filed within the court-fixed period; late claims face strict limits.
Sales to pay debts require court approval in judicial proceedings; administrators risk personal liability for unauthorized acts.

VII. Estate taxes and clearances (high-level workflow)

Open the estate with the tax authority and obtain a TIN for the Estate.
Estate Tax Return: file within the statutory period from date of death (extensions may be available for meritorious cases).
Compute taxable net estate: start with gross estate (worldwide assets for residents; Philippine-situs assets for non-residents), then deduct allowable deductions (which include, among others, standard deduction, family home up to a cap, claims against the estate, certain losses, transfers for public use, and other deductions allowed by current law).
Pay estate tax (installment options and conditions may be available under the Code).
Secure eCAR(s) (electronic Certificates Authorizing Registration) for each property class (real property, shares, etc.).
Transfer titles at the Registry of Deeds/LTFRB/LTO/transfer agents using the eCAR and supporting documents.
Final tax clearance: maintain a closing file (return, payment proofs, eCARs, waivers, schedules).

Because rates, deductions, and administrative forms can change, always match calculations and documentary checklists to the version of the Tax Code and revenue issuances in effect on the date of death.

VIII. Title transfers: registries and agencies

Real property: Decree of distribution/EJS + eCAR + tax clearances → Register of Deeds; annotate EJS and later cancel the Rule 74 two-year lien when permissible.
Condominiums: also require Management/Association clearances and unpaid dues settlement.
Vehicles: eCAR + supporting docs → LTO for change of ownership.
Shares of stock: Board approval and transfer agent endorsement; stock & transfer book entries updated; BIR documentary stamp compliance.
Bank deposits/investments: banks typically require estate tax compliance and estate documents; withdrawals may be conditioned on BIR certifications.

IX. Special situations

Foreign wills / assets abroad: A will probated abroad may be given effect locally via reprobate; assets abroad follow conflict-of-laws and foreign probate rules.
Trusts: Testamentary trusts are implemented through probate; inter vivos trusts may affect the mass of the estate (collation/reduction if inofficious).
Missing persons: Presumptive death rules can trigger opening of succession after judicial declaration.
Advancements and donations: Document lifetime transfers; they may be collated and reduced if they impair legitimes.
Family businesses: Consider interim management agreements and voting arrangements pending distribution.
Minors and persons with disability: Their shares are protected; court approval and guardianship may be required for dispositions.

X. Roadmaps you can follow

A. Extrajudicial Settlement (no will, no debts, all heirs agree)

Gather core documents: PSA death certificate; IDs/TINs of heirs and estate; titles/tax declarations; bank and investment certifications; vehicle OR/CR; proofs of debts paid; marriage and birth certificates; previous donations (if any).
Prepare heirship table and draft EJS (or Affidavit of Self-Adjudication if sole heir).
Notarize and publish the instrument (3 consecutive weeks).
File with the Register of Deeds (annotation) and relevant registries.
File and pay estate tax, secure eCARs.
Transfer titles and other assets; maintain a closing binder with publication proofs and eCARs.

B. Judicial Settlement (probate/intestate)

File petition (probate or intestate) in the proper RTC.
Executor/administrator appointed; post bond if required.
Submit inventory & appraisal; publish notice to creditors.
Receive and litigate claims; request authority for needed asset sales.
File estate tax return, pay tax, obtain eCARs.
Submit accountings; propose project of partition.
Obtain decree of distribution; transfer titles; close the estate.

XI. Heirship and shares (quick primer for common family patterns)

With legitimate children/descendants and a surviving spouse
- Children share the legitime equally; the surviving spouse has a conjugal/community share (from liquidation) plus a successional share alongside the children.
No descendants; with legitimate parents/ascendants and a surviving spouse
- Ascendants take their legitime; the spouse shares according to law.
Illegitimate children inherit as compulsory heirs (subject to current statutory fractions relative to legitimate heirs and spouse).
Adopted children are generally treated as legitimate for succession to adoptive parents.
Representation allows grandchildren to take the share of a predeceased child.
No compulsory heirs: succession proceeds to collaterals; failing which, escheat to the State subject to protections for creditors.

Always run an heirs matrix before drafting distribution clauses or EJS, especially when there are prior marriages, recognized illegitimate children, or lifetime donations.

XII. Partition, co-ownership, and post-settlement housekeeping

Partition deed should attach a lot plan/technical descriptions and an equalization schedule (owelty) if shares are unequal in value.
Co-ownership after settlement requires rules for management, expenses, and pre-emption rights (to avoid later partition suits).
Accounting for fruits and expenses: Administrators/executors must render accounts; heirs may owe each other adjustments for exclusive use, rentals received, or improvements.
Records to keep: court orders, inventories, eCARs, receipts, waivers, publications, notarized instruments.

XIII. Red flags and how to avoid them

Skipping probate when there is a will: dispositions and sales risk nullity.
Using EJS despite existing debts: creditors can unwind transfers and sue heirs who received assets up to the value received.
Unliquidated conjugal/community property: you can’t distribute what belongs half to the surviving spouse. Liquidate first.
Unpublished EJS or missing annotation: exposes transfers to attack and deprives buyers of notice.
Ignoring minors or absent heirs: settlements without proper representation/notice can be voidable.
Estate tax non-compliance: registries and banks will block transfers absent eCARs; penalties and interest accrue.
Inadequate documentation: lost receipts/publications complicate later conveyances and due diligence.

XIV. Practical checklists

A. Document pack (build this early)

PSA Death Certificate
Marriage certificate of parents; birth certificates of heirs
Titles/tax declarations, lot plans, association clearances
Bank/investment certifications; stock certificates; corporate records
Vehicle OR/CR; appraisal reports (if any)
Loan/mortgage statements; proof of debts paid or creditor waivers
Donations/advancements documents for collation
IDs and TINs (Estate and heirs)
Draft EJS/Probate petition, publication proofs, bond (if needed)

B. Counsel’s litigation map (judicial cases)

Jurisdiction/venue memo; heirs and notice list
Inventory & valuations; cash-flow plan for taxes/debts
Motions for authority to sell/compromise; creditor claim defenses
Project of partition; accounting templates; registry closing checklist

XV. FAQs (fast answers)

Do we need a court case if there is no will and no debts? Not if all heirs are of legal age (or properly represented) and agree: use EJS with publication and estate tax compliance.

Can one child transfer the house to their name alone? Only if partition or self-adjudication lawfully vests the entire property in that child (e.g., sole heir situation), with eCAR and registry requirements completed.

What if we later find a creditor? In EJS, a creditor may sue within two years from publication; heirs can satisfy the claim pro rata from what they received.

What happens to bank accounts? Banks usually require estate documents and tax clearances before releasing funds; interim withdrawals may be subject to special conditions—coordinate early.

We found a will after EJS. The will should be probated; expect challenges to the EJS and potential re-partition consistent with the will and legitimes.

XVI. Closing advice

Treat settlement as a project: (1) map heirs and shares; (2) inventory and value assets and debts; (3) choose the correct pathway (EJS vs. judicial); (4) pay taxes and protect creditors; (5) transfer and annotate titles properly. If a step seems “skippable,” it probably isn’t—the cleanest estates are those that over-document every requirement from day one.