Nothing is more difficult than losing a loved one, but we must learn to live with this unavoidable fact of life and move on when it happens. One of the things we have to deal with in moving on is settling the estate of the deceased. In this article we’ll explore two options in the Philippines: judicial and extrajudicial settlement.
The properties left behind by the deceased at the time of his or her death are collectively known as the estate. Settlement, on the other hand, refers to the process of putting in order the estate of the deceased by determining and collating all his or her properties, making sure all debts are paid, obligations are fulfilled, and distributing whatever properties remain to the legal heirs. The deceased person whose estate is being settled is called the decedent.
In the Philippines, there are two types of settling the estate of the decedent: judicial and extrajudicial. Judicial settlement involves participation of the court, which usually happens when the decedent left a last will and testament or whenever there is a dispute as to who will inherit the estate or how it will be distributed. If there is a will, it must be proven in court that the decedent freely and voluntarily executed it. This process is known as probate.
In most cases, however, the decedent did not leave a will. If there is no dispute as to who will inherit and the manner of distributing the estate, the fastest and cheapest way to settle the estate is via an extrajudicial settlement. This is accomplished by having an attorney draft the extrajudicial settlement document, which must be signed by all heirs and published for a certain period of time in a local newspaper where the properties are situated. Thereafter, the legal paperwork is filed with the appropriate registry of properties upon payment of the estate and other taxes.
Sometimes the heirs would want to sell the properties or just give them to one or some of the heirs only, especially those who are already permanently residing here in the U.S. This process may involve a donation or sale by the heirs who want to dispose or relinquish their shares.
Once all the applicable taxes and fees are paid and the legal paperwork as filed is in order, the appropriate registry of properties can then issue the new title to real properties in the name of the heirs or the buyer, as the case may be. Other properties, such as bank accounts and share of stocks, can also be claimed from the depository bank and a corporation’s corporate secretary, respectively, upon presentation of the settlement documents.
Although the extrajudicial settlement of estate of the deceased is simple, there are technicalities and processes that are best left to the experts. A Philippine-licensed attorney familiar with Philippine real estate law and practices is still your best bet in ensuring you will avoid wasting valuable time and money.