In the Philippines, when a person dies intestate (without leaving a will), their estate must go through a process called “estate settlement.” This involves distributing the deceased person’s assets among their heirs. Two common methods for distributing assets among heirs are to execute Extrajudicial Settlement and the Affidavit of Self-Adjudication.
The general rule is thatthe estate of the decedent should be judicially administered through an administrator or executor.
There are exceptions to this rule where the law allows heirs to resort to the following:
- Extrajudicial settlement of estatewhere the decedent died intestate and left no debts (Sec. 1, Rule 74 of the Revised Rules of Court)
- Summary settlement of estatefor estates of small value, when gross estate does not exceed P10,000 (Sec. 2, Rule 74 of the Revised Rules of Court)
Extrajudicial Settlement by Agreement Between Heirs
This shall be allowed when the:
- Decedent died intestate
- Decedent left no debts
- Heirs are all of age, or minors are represented by their legal or judicial representatives; and
- All heirs agree (Sec. 1, Rule 74)
- Settlement is made in a public instrument or by means of an affidavit, in case of a sole heir, duy filed with the RD;
- Publication in a newspaper of general circulation in the province once a week for 3 consecutive weeks; and
- Filing of bond equivalent to the value of personal property with the RD.
If there is only a sole heir, an Affidavit of Self-adjudication of the whole estate will be filed. On the other hand, a Deed of Extrajudicial Settlement may have many heirs and shall be filed instead when there is no disagreement among the heirs. But If there is a disagreement, then they may resort to an action for partition.
Take note that the amount of bond is equivalent to the value of the personal property that forms part of the estate. This should be distinguished from the amount of the bond for purposes of summary settlement of estate, in which case, the amount of the bond shall be fixed by the court.
In the case ofSpouses Villafria v. Plazo (2015),provides the general rule when a person dies intestate, or, if intestate, failed to name an executor in his will or the executor so named is incompetent, or refuses the trust, or fails to furnish the bond required by the Rules, then the decedent’s estate shall be judicially administered and the competent court shall appoint a qualified administrator in the order established inSec. 6, Rule 78.
An exception to this rule is found inSec. 1, Rule 74wherein the heirs of a decedent, who left no will and no debts due from his estate, may divide the estate either extrajudicially or in an ordinary action for partition without submitting the same for judicial administration nor applying for the appointment of an administrator by the Court.
Also discussed in the case ofNeri v. Heirs of Spouses Yusop,where in the extrajudicial settlement of the estate, heirs were excluded and minor heirs were not properly represented, the settlement was not valid and binding upon them.
Affidavit of Self-Adjudication by Sole Heir
According toSec. 1, Rule 74, if there is only one heir, he may adjudicate to himself the entire estate by means of an affidavit filed in the Office of the Registry of Deeds.
In the case ofDelgado Vda. de la Rosa v. Heirs of Marciana Rustia Vda. de Damian (2006),it states that adjudication by an heir of the decedent’s entire estate to himself by means of an affidavit is allowed only if he is the sole heir to the estate.
Note though that both Self adjudication and Extrajudicial settlement of estate will require the BIR eCAR processing. To know more about BIR CAR title transfer please refer to our FAQ.
Need further information and assistance in the Extrajudicial Settlement and Affidavit of Self-Adjudication? Talk to our team at FILEDOCSPHIL to know more about the requirements and process. You may contact us at (+63) 917 149 2337 or send an email to info@filedocsphil.com for more information.
