Re- Estate Settlement Procedures

RE: ESTATE OF DECEDENT Based on the information you have provided, that the decedent had NO LAST WILL & TESTAMENT, and only had ONE LEGITIMATE CHILD (born during valid marriage), NO DEBTS LEFT and no legal wife at the time of his death, we render the following opinion/recommendation:  

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This is an intestate succession, as no Last Will was made; In the rules of intestate succession, the legal heir of decedent is solely his legitimate son, as he excludes parents, collaterals (siblings) and State; And since there are no debts, and last will, extra judicial settlement of decedent’s estate may be done. EXTRA JUDICIAL SETTLEMENT OF ESTATE IS A summary form of settling the properties left by a decedent without going through regular court proceedings. 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 sole heir who adjudicates the entire estate to himself by means of an affidavit shall file, simultaneously with and as a condition precedent to the filing of the public instrument, or of the affidavit in the office of the register of deeds, a bond with the said register of deeds, in an amount equivalent to the value of the personal property involved as certified to under oath by the parties concerned and conditioned upon the payment of any just claim that may be filed under section 4 of this rule (Rule 74 of the Rules of Court). It shall be presumed that the decedent left no debts if no creditor files a petition for letters of administration within two (2) years after the death of the decedent. The fact of the extra judicial settlement or administration shall be published in a newspaper of general circulation; but no extra  judicial settlement shall be binding upon any person who has ha s not participated therein or had no notice thereof. If the decedent left a real property under his name, the following are the steps that may be taken by the heirs for transferring a title registered in the name of a decedent to the heirs: 1. Preparation of Extra-Judicial Settlement Agreement (EJSA) or AFFIDAVIT of Self Adjudication.

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2. Notarization of Extra-Judicial Settlement Agreement/ AFFIDAVIT of Self Adjudication. 3. Payment of Estate Taxes and penalties and other taxes with the BIR and securing of Certificate Authorizing Registration. Documentary requirements:

1) Notice of Death duly received by the BIR 2) Certified true copy of the Death Certificate of registered owner of property. 3) Deed of extra judicial settlement of the estate 4) Certified true copy(ies) of the Transfer/Original/Certificate of Title(s) of real property(ies) (front and back pages). 5) Certified true copy of the latest Tax Declaration of real properties at the time of death. TAX RATES Effective January 1, 1998 up to Present If the Net Estate is Over

But not Over

The Tax Shall be

Plus

Of the Excess Over

P 200,000.00 Exempt P 200,000.00 500,000.00 0 5% P 200,000.00 500,000.00 2,000,000.00 P 15,,000.00 8 % 500,000.00 2,000,000.00 5,000,000.00 135,000.00 11 % 2,000,000.00 5,000,000.00 10,000,000.00 465,000.00 15 % 5,000,000.00 10,000,000.00 1,2l5,000.00 20 % 10,000,000.00 Source: BIR: http://www.bir.gov.ph/lumangweb/tax_estate.html 4. Registration of the EJSA with the Register of Deeds and payment of bond equal to value of property. 5. Publication of the EJSA.

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In this case, Affidavit of Self Adjudication with Sworn Declaration of all properties of Estate may be executed by the sole heir; Please see the steps to be done and detailed checklist in Settlement of Estate and payment of estate tax with BIR;

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1. File a Notice of Death with the Bureau of Internal Revenue within two monthsafter the date of death. This is applicable when the gross value of the estate exceeds P20,000.00. This should be filed by the executor or administrator of the estate, or any of the legal heirs. It shall be filed with the RDO where the decedent was domiciled at the time of his death. There is no specific format. 2. Get a Tax Identification Number (TIN) for the Estate of the deceased person by using BIR Form No. 1901. Use this TIN when filing the Estate Tax Return (BIR Form No. 1801). 3. Prepare the list of assets and liabilities of the decedent. Get the fair market values of the properties at the time of death. 4. Prepare the supporting documents for the assets and liabilities, as well as the deductions you are going to take. You will need these for the estate tax computation and as attachments to the Estate Tax Return. 1. Certified true copy of the Death Certificate 2. Notice of Death duly received by the BIR, if gross estate exceeds P20,000 for deaths occurring on or after Jan. 1, 1998; or if the gross estate exceeds P3,000 for deaths occurring prior to January 1, 1998 3. Any of the following: Deed of Extra-Judicial Settlement of the Estate, if the estate is settled extra judicially (sample forms may be found here and here). Court Orders/Decision, if the estate is settled judicially; Affidavit of Self-Adjudication (sample here) and Sworn Declaration of all properties of the Estate A certified true copy of the schedule of partition of the estate and the order of the court approving the same, if applicable. 4. Certified true copy(ies) of the Transfer/Original/Condominium Certificate of Title(s) of real property(ies) (front and back pages), if applicable 5. Certified true copy of the latest Tax Declaration of real properties at the time of death, if applicable 6.  “Certificate of No Improvement” issued by the Assessor’s Office declared properties have no declared improvement or Sworn Declaration/Affidavit of No Improvement by at least one (1) of the transferees 7. Certificate of Deposit/Investment/Indebtedness owned by the decedent and the surviving spouse, if applicable 8. Photocopy of Certificate of Registration of vehicles and other proofs showing the correct value of the same, if applicable 9. Photo copy of certificate of stocks, if applicable 

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10. Proof of valuation of shares of stocks at the time of death, if applicable For listed stocks – newspaper clippings or certification from the Stock Exchange For unlisted stocks – latest audited Financial Statement of issuing corporation with computation of book value per share 11. Proof of valuation of other types of personal property, if applicable 12. Proof of claimed tax credit, if applicable 13. CPA Statement on the itemized assets of the decedent, itemized deductions from gross estate and the amount due if the gross value of the estate exceeds two million pesos, if applicable 14. Certification of Barangay Captain for claimed Family Home 15. Duly notarized Promissory Note for “Claims against the Estate” arising from Contract of Loan 16. Accounting of the proceeds of loan contracted within three (3) years prior to death of the decedent 17. Proof of the claimed “Property Previously Taxed”  18. Proof of claimed “Transfer for Public Use”  19. Copy of Tax Debit Memo used as payment, if applicable Compute the net estate and estate tax. File the Estate Tax Return and pay the estate taxes. Follow the procedure for transferring real properties to the name of the heirs (this will be discussed in a separate post). Follow the procedure for cancellation of the TIN of the decedent as discussed in Section 12 of Revenue Regulations No. 7-2012. Use BIR Form No. 1905 for the cancellation of TIN. 

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5. 6. 7. 8.

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Please also see a sample of Affidavit of Self Adjudication.

Republic of the Philippines) City of___________)S.S x--------------x AFFIDAVIT

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I, _____________, Filipino, of legal age, (single / married / widow), and a resident of _____________, Philippines, after being sworn in accordance with law, depose and state: 1. That I am the only child and sole heir of _____________ who died intestate on _____________ at _____________; 2. That said deceased left a certain parcel of land covered by Transfer Certificate of Title No. _____________ and more particularly described as follows: (Technical Description of Property) 3.That said deceased left no debts, nor any Last Will and Testament; 4.That pursuant to Sec. 1 of Rule 74 of the Revised Rules of Court of the Philippines, I hereby adjudicate unto myself the above-described parcel of land, and the improvements found and standing thereon, and I hereby request the Register of Deeds to issue a new Transfer Certificate of Title in my name; 5.That the above-described parcel of land does not come under the operation of the Comprehensive Agrarian Reform Program. IN WITNESS WHEREOF, I have hereunto set my hand this _____________ in _____________, Philippines. AFFIANT

(JURAT)

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REPUBLIC OF THE PHILIPPINES) PROVINCE OF AAA ) S.S. MUNICIPALITY OF BBB ) AFFIDAVIT OF SELF-ADJUDICATION

I, ABC, of legal age, Filipino, single and a resident of No. 123 Municipality of AAA, Province of BBB, Philippines, after having been duly sworn in accordance with law, do hereby depose and say: 1. That I am the only daughter of X who died intestate ini the Municipality of AAA, Province of BBB, on April 08, 2002 as evidenced by Death Certificate issued by the Municipality of AAA, Province of BBB, hereto attached as ANNEX “A” and made an integral part of this Affidavit; 2. That the said deceased left deposit in the Rural Bank of AAA, Inc., in the amount of P300,000; 3. That the said deceased left no debts; 4. That pursuant to Rule 74, Sec. 1 of the Rules of Court, I hereby adjudicate unto myself the above described real estate by means of this Affidavit and hereby files the same with the Register of Deed of BBB with the request that the said adjudication be made effective without judicial proceeding as prescribed by the aforementioned Rules of Court. IN WITNESS WHEREOF , I have set my hand this _____ day of  ____________ 2011 at Municipality of AAA, Province of BBB, Philippines.

ABC Affiant SUBSCRIBED AND SWORN before me this ____ day of  ____________ 2011 at Municipality of AAA, Province of BBB, Philippines.

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Doc. No.______; Page No. _____ ; Book No. _____ ; Series of ______

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Once the estate has been settled and transferred to the legal heir, the legal heir, may then execute a document which authorizes decedent’s parents/siblings to manage the affairs of properties he inherited and/or share therein; SOLE HEIR may also execute waiver of interest in favor of decedent’s parents/siblings or whatever arrangement all of you would agree on; But all these may be done, after the estate of decedent has been settled and proper taxes have been paid.

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