Executing an Extrajudicial Settlement of Estatement is most common when a deceased leaves real properties. This is because the real property will not be transferred to the heirs if the estate taxes are not paid and this extrajudicial settlement is not executed.
Section 1, Rule 74 of the Rules of Court indicates the extrajudicial settlement by agreement between heirs. The law states that “if the decedent left no will and no debts and the heirs are all of age or the minors are represented by their judicial or legal representatives duly authorized for the purpose, the parties may, without securing letters of administration, divide the estate among themselves as they see fit by means of a public instrument filed in the office of the register of deeds, and should they disagree, they may do so in an ordinary action of partition. 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 register of deeds.
The execution of extrajudicial settlement of estate, however, does not only revolve around real properties. This is because personal properties may also be involved. For example, there are:
- Shares of stock
- Vehicle
- Bank accounts
- etc
That was left behind by the deceased and the heirs would like to transfer the same under their names or that they want to secure the proceeds thereon or take possession of the personal property.
This means the personal properties would need to be included in the extrajudicial settlement of estate and corresponding taxes would also have to be paid.
For example in the transfer of shares of stock from the deceased’s name to the heirs’ names, the corporate secretary of the corporation that issued the shares of stock would require proof of the payment of taxes via eCAR or electronic Certificate Authorizing Registration (CAR) issued by the BIR attesting to the payment or exemption from payment of the estate tax and all other taxes that may be required (e.g. Documentary Stamp Taxes), in accordance with the National Internal Revenue Code or even a copy of the extrajudicial settlement of estate documents before transferring the shares of stock to the heirs. The corporate secretary may also ask for more documentation depending on their usual policies. This can include:
- The original certificates of the deceased stockholder’s shares of stock.
- A copy of the Certificate of Death.
- Proof of filiation of the heirs with the deceased.
- Company form requesting for the transfer
- valid Identification Documents (IDs) of each of the heirs
Need further information and assistance in the Philippines? Talk to our team at FILEDOCSPHIL to know more about the requirements and process. Call us today at (+632) 8478 5826 or send an email to info@filedocsphil.com for more information.
