Settling the estate of the deceased

"It is more valuable for us to leave with our children a legacy of loyalty, commitment, courage, and hard work."

Death is a reality of life and a fact of our mortality. We Christians believe that we come to life with nothing and die with nothing. While the deceased leaves his mortal body, the material things that he acquired during his lifetime are not left without an owner. The law recognizes that the moment he passes on to a new life, his possessions are passed on to his heirs by the operation of law unless he dies without one; in which case his properties may be escheated to the government.. Hence, there is no point in time at which a property is left without an owner.

However, from the time of death until his properties are settled and distributed among the heirs, the properties will be under the name of the estate of the deceased. If the person who died is Juan de la Cruz, the estate will be known as the Estate of Juan de la Cruz. The estate is an entity authorized by law that requires no separate creation – it is the passing or death of a person that brings the properties into the estate. Once the estate is settled and the properties distributed to the heirs, the estate naturally disappears.

In the course of settling the estate, it is unfortunate to see families fighting over properties, quibbling over their portions, endlessly bickering about whom the deceased adored and why he or she is entitled to more properties, and making demands upon the estate to account for the medical expenses spent on and allowances conferred upon the deceased in his old age, who in his lifetime must have selflessly attended to all their needs growing up. Worse, previous sales of properties, donations and gifts to other heirs or members of the family may be disputed by others to have more of the estate.

As some oldtimers say, it is the first generation that builds the family’s estate, the second generation that spends it, and the third generation that is left with nothing to spend. The more families inculcate discipline in their descendants – to work hard and build their own businesses and maintain a healthy profession – then any inheritance will just be the icing on the cake. Of course, in those families whose estates may trickle down to at least 5 generations without being depleted, one may encounter heirs who venture into pursuits where profit or income is only secondary.

The simplest way to settle and distribute the estate is through extrajudicial settlement by agreement among heirs. However, this will only be possible if the deceased left no will (testament), no debts, and the heirs are all of age or the minor heirs are represented by their judicial or legal representatives. The heirs without court intervention may divide the estate among themselves as they see fit by means of a public instrument filed in the office of the Register of Deeds (Section 1, Rule 74, Rules of Court). For example, if a deceased father left his widow and three children with two real properties, they may agree to divide each real property into four parts so each heir will have a quarter each of the two properties. The heirs may agree to divide the estate – including personal properties if some were left by the deceased –in whatever permutation they see fit.

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 parties in an extrajudicial settlement by public instrument or the sole heir who adjudicates the entire estate to himself by an affidavit must, before the filing of the settlement documents with the register of deeds, post a bond in an amount equivalent to the value of the personal property involved. The fact of the extrajudicial settlement shall then be published in a newspaper of general circulation (Section 1, Rule 74, Rules of Court).

If the heirs do not agree on the settlement of the estate, any heir may file an action for judicial partition of a real property stating in his complaint the nature and extent of his title and the description of the real property of which partition is demanded (Section 1, Rule 69, Rules of Court). It is imperative that all persons (co-owners) interested in the real property shall be joined as defendants, they being indispensable parties (Divinagracia v. Parilla, G.R. No. 196750). Judicial partition also applies to partitions of estates composed of personal property, or both real and personal property (Section 13, Rule 69, Rules of Court).

Another possibility is when the executor, administrator, or interested person files a petition to assign the estate to the persons entitled, and names the proportions or parts to which each of them is entitled. If there is a controversy before the court as to who are the lawful heirs or as to the proportion of the distributive shares which each person is entitled to under the law, the controversy shall be decided by the court (Section 1, Rule 90, Rules of Court). For better understanding, it must be noted that the executor is named in the will and confirmed by the court while the administrator is appointed by the court.

Settlements of estates may be a bit complicated if the deceased left a will or testament. There are two kinds of will – a notarial will or holographic will. A notarial will must be subscribed by the testator himself, and attested and subscribed by three or more credible witnesses in the presence of the testator and one another (Article 805). It must likewise be acknowledged before a notary public by the testator and the witnesses (Article 806, Civil Code). On the other hand, a holographic will must be entirely written, dated and signed by the testator (Article 810, Civil Code). This is the only way to bequeath personal property upon or to devise real property to someone who is not related by blood to the testator.

However, no will shall pass either real or personal property unless it is proved and allowed in accordance with the Rules of Court (Article 838, Civil Code; Rule 76, Rules of Court). In other words, the probate court will have to determine the absence of bad faith, forgery, fraud or undue or improper pressure or influence in the execution of the will (Art. 809, Civil Code).

Among the options available to the heirs, extrajudicial settlement of estate is the least expensive and the most expeditious. Judicial partition is like any other case in that it requires filing fees, cost of litigation and a budget for attorney’s fees. However, the most costly is the probate of the will and/or the settlement of the estate in court which may be coupled with petitions for letters testamentary (executor) or letters of administration depending on the complexity of the case and the animosity existing among the heirs. Like judicial partition and other court actions, this mode of settlement will also require filing fees, cost of litigation and attorney’s fees.

The concept of inheritance refers to the transmission of material possessions from an ascendant, descendant or collateral relatives. This is rooted in the presumed love and affection among the members of the family. However, more than property, it is more valuable for us to leave with our children a legacy of loyalty, commitment, courage, and hard work; coupled with a strong character and secure faith in God.