The death of a relative can be distressing, more so if you and your co-heirs have to talk about money, real estate, and other material belongings because they left no will. But there is a way, because the law provides a remedy for a faster and efficient way to settle the departed relative’s estate – extrajudicial settlement.

In cases where the decedent left no will and no debts, the legal heirs may divide the estate among themselves as they see fit by means of a public instrument (or in other words, notarized document) filed with the register of deeds, without having to go to the court. Hence, “extrajudicial” – out of court. But before you consider this option, bear in mind that your deceased relative must not have left a will and has left no debts. Otherwise, you must go to court to have the will approved or, in case of debts, to have the estate administered for the purpose of settling all claims against the estate.

Generally, the process can be divided into four steps.

Step 1: Identify and Coordinate with the Heirs

To begin the process of extrajudicial settlement, identify the persons entitled to a portion of the deceased relative’s properties by law. This may include the surviving spouse and children of the deceased as well as their parents or grandparents. Communicate well and make sure that everyone is on board with the extrajudicial settlement. Make sure that no one is excluded from their fair share of the estate, or else the process may go to court. If any of the heirs are living abroad and cannot go to the Philippines to manage things personally, they may execute a special power of attorney to authorize someone else to do it in their behalf. The special power of attorney should be properly authenticated with an Apostille certification or a consular certificate from the nearest Philippine consulate.

Step 2: Prepare the Extrajudicial Deed of Settlement

Afterwards, you may now draft the deed of extrajudicial settlement. Make sure to list down all the properties of your deceased relative, prepare all the related documents such as certificates of title and tax declarations, and indicate clearly how the properties will be divided among the heirs. Once finished, all heirs should sign the deed before it is notarized to make it a public instrument. Afterwards, it must be published in a newspaper of general circulation for three consecutive weeks.[1]

Step 3: Pay Estate Taxes

Next, pay estate tax by presenting the extrajudicial deed of settlement and other relevant documents with the Bureau of Internal Revenue.[2] Once done, they will issue a Certificate Authorizing Registration which you will need for the final step.

Step 4: Transfer the Properties to the Heirs

To finish the process, file the deed with the register of deeds of the place where the real properties of your deceased relative are located. You will be required to post a bond equivalent to the value of the personal properties involved in the settlement.[3] You may also have to pay additional transfer taxes or local government taxes depending on the place and nature of the properties. Once done, the properties will now be transferred under the ownership of the relatives assigned in the deed – marking the completion of the settlement.

Creditors May Still Come Calling

The extrajudicial settlement, however, does not mean to foreclose any claim of a creditor who may have been forgotten or intentionally left out. Such creditors have a period of two years after the death of the decedent to bring the settlement to court through a petition for letters administration.[4]

Conclusion

Indeed, the extrajudicial settlement process provides a more expedient way to settle our deceased loved ones’ properties for as long as all primary considerations – no will, no debts, and cooperation of heirs – are met. Our deceased loved ones cannot bring their material possessions in the next life. But with this process, we can at least enjoy what they have left without having to go through the typical rigors of litigation.**

*About the Author: Atty. Nathan Raphael D.L. Agustin is an Associate at FLO Attorneys-at-Law whose practice areas include civil and criminal litigation, government procurement, real property registration, regulatory compliance, intellectual property, labor and employment, and corporate matters. His areas of interest include legislative affairs, public policy, and government relations.

He graduated from the University of Santo Tomas Faculty of Civil Law in 2023 and was admitted to the Bar in the same year. An accomplished student leader, he served as President of both the law and university-wide student councils at UST.

**Settling the estate of a loved one is seldom a simple and straightforward process. Many people find it helpful to consult an estate lawyer who can guide them through the process. Should you wish to learn more about this topic, please feel free to send us an email at info@flo.com.ph.

[1] Section 1, Rule 74, Rules of Court

[2] The current rate is 6% based on the value of the net estate (Section 84, National Internal Revenue Code).

[3] Section 1, Rule 74, Rules of Court

[4] See citation above.