During our lifetimes, we accumulate properties—both personal and real—that we hope to pass on to our loved ones. However, without proper estate planning, inheritance disputes, legal complications, and excessive fees can arise. So, how can you ensure your heirs inherit what you intend for them?

Understanding the Estate

An estate includes all real properties (such as land and buildings) and personal assets (such as vehicles, jewelry, stocks, and bank deposits), minus any liabilities. Upon death, the decedent’s properties legally transfer to their heirs, but this process is far from automatic. Heirs must follow a formal estate settlement process to claim ownership—a procedure often neglected, leaving many properties tied up in unresolved estates.

To address this issue, the Philippine government has extended the deadline for estate tax amnesty applications until June 14, 2025. Here’s how to ensure your properties are legally transferred to your heirs.

Steps in Transferring Real Estate Properties through Succession

Step 1: Determine if the Decedent Left a Will

Preparing a will is uncommon in the Philippines, though it can prevent future disputes among heirs.

Types of Wills:

Notarial Will: Requires notarization, witnesses, and adherence to a specific format.
Holographic Will: Entirely handwritten, signed, and dated by the testator. Witnesses are only needed to validate the will in court.

With a Will:
If a will exists, the estate undergoes a judicial settlement where a probate court validates the will and appoints an executor or administrator to manage the estate.

Without a Will:
If there is no will, heirs must pursue an extrajudicial settlement. All heirs must agree on property division, confirmed through a deed of extrajudicial settlement. If there’s only one heir, a deed of self-adjudication is required.

Step 2: Pay Estate and Transfer Taxes

Heirs must visit the Bureau of Internal Revenue (BIR) and the local Assessor’s Office to obtain a certificate of zonal and fair market values. Taxes include:

Estate Tax: A uniform 6% rate of the net estate value under the TRAIN Law, payable within a year of the decedent’s death.
Transfer Tax: Ranging from 0.5% to 0.75%, depending on the property’s location.

Once taxes are cleared, the BIR issues an electronic Certificate Authorizing Registration (e-CAR).

Step 3: Transfer of Title and Tax Declaration

Heirs must pay registration fees at the Registry of Deeds and submit all required documents for the title transfer. After receiving the updated title, heirs should update the tax declaration at the Assessor’s Office.

Expert Guidance for a Smooth Process

Navigating the complexities of estate settlement can be overwhelming. Consulting professionals, like Leechiu Property Consultants, ensures a smoother process. Whether heirs need to sell properties to cover estate expenses or resolve title issues, expert advice can make all the difference in preserving and transferring family assets.

Planning ahead is not just about securing properties—it’s about protecting relationships and building a lasting legacy for generations to come.