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BASIC CONCEPTS IN ESTATE PROCEEDINGS


AND ESTATE TAX
By: Atty.Fred | September 19, 2006 in Family Law, Property/Estate Law, Special Projects, Tax Law

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Among the inescapable facts in life, something which everyone shares regardless of status, race, sex or
creed, is death. A person may leave properties (or liabilities) upon death, so a discussion on the basic
concepts on estate proceedings is in order.

Inheritance – Inheritance includes all the property, rights and obligations of a person which are not ex-
tinguished by his death. (Civil Code, Art. 776)

Testate Estate – An estate of a deceased person which is settled or to be settled with a valid last will
and testament.

Intestate Estate – An estate of a deceased person without a will.

Will – An act whereby a person is permitted, with the formalities prescribed by law, to control to a cer-
tain degree the disposition of his estate. (Civil Code, Art. 783)

Testator – The deceased person who made a last will and testament. (Civil Code, Art. 775)

Probate – A special proceeding to establish the validity of a will. Probate is mandatory, which means
that no will passes either real or personal property unless it is proved and allowed in a proper court.

Reprobate – A special proceeding to establish the validity of a will previously proved in a foreign coun-
try.

Legatee – One who is given personal property through a will. (Civil Code, Art. 782)

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Devisee – One who is given real property in a will. (Civil Code, Art. 782)

Executor – The person named in the will who is entrusted to implement its provisions. (Rules of Court,
Rule 78)

Executrix – A female executor.

Administrator – The person entrusted with the care, custody and management of the estate of a dece-
dent until the estate is partitioned and distributed to the heirs, legatees and devisees, if any. (Rules of
Court, Rule 78)

Administratrix – A female administrator.

Special proceedings – A remedy by which a party seeks to establish a status, a right, or a particular fact.
(Rules of Court, Rule 1, Sec. 3 [c]). Among the subject matters of special proceedings are escheat and set-
tlement of estate of deceased persons. (Rules of Court, Rule 72, Sec. 1)

Escheat – A proceeding whereby the state, by virtue of its sovereignty, steps in and claims the real or
personal property of a person who dies intestate leaving no heir. In the absence of a lawful owner, a
property is claimed by the state to forestall an open “invitation to self-service by the first comers”. (Re-
public vs. CA, G.R. No. 143483)

Estate tax – A tax on the transfer of the net estate of the decedent. (Tax Reform Act of 1997, Sec. 84)

Gross estate – The total value of all property belonging to the decedent at the time of death, wherever
situated. (Tax Reform Act of 1997, Secs. 85, 104)

Net estate – Gross estate less allowable deductions and exemptions. (Tax Reform Act of 1997, Secs. 84,
85 and 86)

Related Posts:
1. Extrajudicial Settlement of Estate: Basic Discussion
2. Last Will and Testament: Basic Discussion
3. Presumptive death of a spouse for subsequent marriage
4. System of Absolute Community: Property Relations in Marriage
5. Conjugal Partnership of Gains: Property Relations in Marriage

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31 thoughts on “Basic concepts in estate proceedings and estate tax”

lawenthusiast
October 24, 2006 at 12:52 pm

can a person such as an heir offer his future inheritance a contribution to an entity such as
a partnership? is that a valid contribution?

Pingback: Common-law marriage (live-in relationships) in the Philippines at Philippine e-Legal Forum

Tina
February 27, 2007 at 5:05 am

I am not a lawyer and I need help on my research on making my Living Revocable Trust. Is a Living Revo-
cable Trust valid in the Philippines?
Or only a Will is honored in the Philippine system?

Atty. Fred Post author

February 27, 2007 at 7:33 am

Lawenthusiast, sorry I didn’t see your post. For whatever this is worth, please check Article 1347 of the
Civil Code which reads in part: “No contract may be entered into upon future inherintance except in
cases expressly authorized by law.”

Tina, a Revocable Living Trust is, well, a trust, which concept is partly governed by Articles 1440 to 1457
of the Philippine Civil Code. Just to be clear, please don’t consider this as an advice on your concerns, as
no legal opinion is dispensed in this Forum. Good luck with your research.

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pax2006
August 14, 2007 at 1:03 pm

base on sec. 20 of Bill of Rights that no person shall be imprisoned for debt or non payment of a poll
tax…

does it mean that nobody would be imprisoned for non payment of real or property tax…

thanks =)

Atty. Fred Post author

August 15, 2007 at 8:50 am

Pax,

Let’s make this more interesting. A tax is not an ordinary debt, wherein you could not be imprisoned. In
general, non-payment of taxes is tax evasion, which has a criminal penalty. The exception provided in
Sec. 20 is a “poll tax”, which is definitely not an income tax or, as you mentioned, real property tax. Since
I understand that you’re a PolSci student and had studied the Local Government Code (or am I wrong?
=), could you please tell me if a person who does not pay real property tax may be imprisoned? =)

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pax2006
August 15, 2007 at 2:16 pm

Actually, we’re still studying the introduction to constitutional law and we’re focusing on Bill of Rights…

I have no idea as what the difference between poll tax, income tax and real property tax.

That question was being asked during our exam last week, and no result yet, if the not paying real prop-
erty tax could not be imprisoned…

anna
November 20, 2007 at 12:52 pm

good day, i just want to ask if there is a penalty for not paying the estate tax immediately after the death
of the owner of the property. my father died last 1993 leaving two parcel of lands, we pay the real prop-
erty tax yearly but we are not awre of the esttae tax until we decided to finally sell the parcels of land
this month.

jhdma5
April 10, 2008 at 4:17 am

Situation:

My grandfather & grandmother owned a lot & house. They had 10 children. The children grew up and
some moved away. The house burned down. Another house was built on the lot by the 4 unmarried chil-
dren of my grandparents.

Questions:

What is common and what is not common in the estate?


Who has the right to take tenants in the house only?

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What are the Philippine statutes/laws that define these?

Nathan
May 23, 2008 at 12:56 am

My brother, a US citizen, lived in the Philippines for ~20 years. He died October 2007 with his domicile in
the Philippines. His widow was named executrix in his will. I am helping her to get a letters testamentary.
We have been told that this can only be done in the jurisdiction of the deceased’s residence. We live in
the US. She has emphezema and is on oxygen. Is there some way we can get the letters testamentary
without having to fly to the Philippines? Thank you.

fab
June 17, 2008 at 3:00 pm

how about if the liability of the deceased is a credit card obligation? how does this get settled? does the
card companies still have the rights to collect for it?

thank you.

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divina
June 21, 2009 at 11:52 am

can a child who was registered as a natural child by simulated birth in the birth registration certificate be
considered a natural child and therefore a legitimate child and mandatory heir of the adoptive parents?
Or her being a “natural legitimate” child, since it was falsified documents invalid from the very begin-
ning? will this have any bearing on future inheritance of the property of the adoptve parents? thanks!

fairlady
July 20, 2009 at 12:09 am

What documents are required,apart from the heir’s affidavit, for the extrajudicial estate settlement pro-
ceedings?

phil cap
July 20, 2009 at 12:46 am

hi fairlady,

i’m new to e-legal forum. please allow me to give you some points on your querry.

normally, when filing an extrajudicial settlement you need the following:

the birth certificates of the heirs and their the taxpayers identification numbers assuming all the heirs
are adults

of course you will also be needing certified true copies of all transfer certificates of titles of all lands
owned and registered under dissidents name. aside from that you will also need certified copies of tax
declaration of said real properties.

for further details, the best government office to get info on this is the bureau of internal revenue where

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Basic concepts in estate proceedings and estate tax | Philippine e-Leg... https://jlp-law.com/blog/basic-concepts-estate-proceedings-tax/

you will be filing your estate tax.

be warned though that filing curing all the required documents is a long, time consuming, and tedious.

you may need a lawyer or an accountant to file the estate tax return.

have a good day.

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