First of all, a death certificate must be applied for and the entries correctly filled in. The hospital where the death occurred usually assists the relatives in securing the death certificate. The representatives of the funeral parlor are also able to assist in this regard. It would be advisable that upon issuance of the death certificate, the relatives obtain at least one certified true copy since they would need to present the same to the BIR, Registers of Deeds and/or the courts, as the case may be.
Although it does not seem proper to appear to be very eager in finding out what and how much one will get upon the death of a parent or other relative, the Rules of Court do require that a person who has custody of a will shall, within 20 days after he knows of the death of the testator, deliver the will to the court of the place of residence of the testator, or to the executor named in the will. In other words, the relatives must endeavor to find out if the deceased did leave a will and where it is. If, despite efforts, nobody can find any will or if they are certain that the deceased did not leave any, the heirs can then already start the process of settling his estate.
An initial step is to notify the BIR of the death within two months and to file the estate tax return and pay the estate tax within six months from date of death. The latter period may be extended where payment of the estate tax would impose undue hardship on the heirs, not to exceed five years in case the estate is settled through the courts, or two years in case the estate is settled extra-judicially. Accordingly, it is imperative that the heirs start gathering the original titles or the owner’s duplicates of the TCT and other proofs of ownership of real and personal properties belonging to the deceased as well as taking possession of the properties themselves. Only titles in the name of the deceased are involved. Where the deceased was married, titles in the names of both spouses are included because the deceased’s conjugal or community share therein is part of his estate. Apart from titles or TCTs, stock certificates, LTO car registration, passbooks, bank certificates, investment papers, and the like, as long as the name of the deceased appears therein, are the usual proofs of ownership the heirs must look for. Deeds of assignment, contracts to sell, declarations of trust, insurance policies, pension plans and other forms or documents showing a right, title, claim or interest in favor of the deceased must likewise be gathered. Regarding real properties, the heirs must secure from the BIR, the zonal valuation of the same for estate tax purposes. Likewise, shares of stock and other personal properties must be properly valued. In the case of big corporations where the deceased may have had shares of stock, the office of the corporate secretary can provide the stock price prevailing at the time of death. For close or family-owned corporations, valuation may be secured from the finance officer, financial statements and/or auditors. Where the deceased had a safety deposit box, the same may be opened in accordance with applicable banking procedure which would generally involve a formal request of the person duly authorized by all the heirs or the court and the presence of the bank manager and BIR representative.
Having gathered the assets, the heirs must also determine if the deceased left any liability or indebtedness. They should look for promissory notes, real estate mortgage, chattel mortgage, credit cards and other statements of account, and any other form or document whereby the deceased had undertaken to repay, return or settle whatever in favor of another. In addition, the heirs must gather and preserve proofs of allowable deductions from the estate tax. Among these are actual funeral expenses or an amount equal to five percent of the gross estate, whichever is lower, but in no case to exceed P200,000, judicial expenses of testamentary or intestate court proceedings and medical expenses incurred by the deceased within one year prior to his death supported by receipts but in no case exceeding P500,000.
Where the estate is large, the services of a lawyer and accountant need to be engaged as soon as possible as they could help the heirs in their efforts to find out what and where are the properties belonging to the deceased. However, a court proceeding is not indispensable in all instances of estate settlement. The Rules of Court provide that where the deceased left no will and no debts and the heirs are all of age, or the minors are represented by their judicial or legal representatives duly authorized for the purpose, the heirs 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. In this simple situation, all the heirs have to do is agree to, and sign, an extra-judicial settlement and partition of the estate in the presence of a notary public. The extra-judicial settlement and partition of the estate must be published in a newspaper of general circulation once a week for three consecutive weeks. After publication, the heirs can proceed to prepare and file the estate tax return and pay the estate tax with the BIR. Upon securing a certification of payment of the estate tax from the BIR, the next step would be for the heirs to transfer the titles to their names. The Registers of Deeds all over the country have more or less the same requirements and these entail the submission of the certified true copy of the death certificate, extra-judicial settlement and partition, affidavit of publication, BIR certification of payment, the original owner’s duplicate of the title, up to date realty tax payment certification, updated tax declaration, and the payment of the transfer taxes registration fees and others. The heirs can also already claim other moneys due to the estate or beneficiaries such as those from the SSS or GSIS, as the case may be, by filing the application therefore, withdraw the balance, or change the account name, of bank accounts in the name of the deceased by submitting to the bank the same documents as in the transfer of title, and/or availing of the insurance and retirement benefits arising from the death of the deceased with the insurance companies and the employer or work place of the deceased.
Where there is a will, and the same was not probated nor approved by a court during the lifetime of the deceased, the same must first be probated by a court before any settlement of the estate and transfer of real properties to the heirs can be done. A court proceeding may also be warranted, although there is no will, where the heirs are in disagreement (violent or otherwise), there is a necessity for the appointment of an administrator to take care of the estate since the heirs cannot do so or are locked in dispute, there are creditors wanting to be paid, some heirs cannot be found or there are claimants such as illegitimate children. Where the probate of the will is being contested or if the court proceeding is expected to continue for some time, an administrator, usually an heir who is acceptable to the others, may be appointed by the court to look after the estate pending settlement. Where the heirs are not in good terms, the mere selection and appointment of an administrator would not only be difficult but painful. Where an administrator has been appointed, then he becomes responsible for the inventory of the assets of the estate, payment of the debts and taxes, managing the properties, suing on behalf of or defending the estate against creditors, claimants or even heirs who may be fraudulently concealing estate properties, selling some properties if necessary and ultimately seeing to it that the estate is finally distributed and partitioned. The administrator, however, is obliged to seek the permission of the court before any major undertaking of his duties and responsibilities. Where a will that has been probated names an executor, the latter takes the place of an administrator.
Upon probate of the will and there are no other issues, then the court proceeding can terminate, even without appointment of an administrator or executor, and the heirs can immediately proceed with the execution of the partition agreement and follow the same procedure as in an extra-judicial settlement.
(The author is a senior partner of Angara Abello Concepcion Regala & Cruz Law Offices. She may be contacted at 830-8000; fax at 894-4697 or email at: accra@accralaw.com)