Bad news: the amnesty for the estate tax penalty will end by 14 June 2025 and there is no indication that it will be further extended. While some heirs have already settled the estate of their ancestors, others are still oblivious about the end of the amnesty period. Many heirs are complaining about the tedious process to be undertaken in transferring the estate to their name and the amount they are being required to pay. There is no such thing as a free meal so they say. If one is lucky enough to inherit properties, then he has to go through the process and pay the equivalent fee. The tax being collected by the Bureau of Internal Revenue (BIR) is but a small portion of what is to be received by the heirs not by virtue of their labor or effort but only be reason of being so lucky to have been related to the decedent. Will this be sufficient as consolation or justification for the processes, taxes, and fees one has to endure in transferring inheritance?
The Will
A client once asked me if it will be better if he makes a will in order to make sure that his children will be guided in dividing his properties when he dies. Well, its complicated. One advantage of making a will is that the distribution of the properties is controlled but it has to go to the court. It involves more time and money. If there is no will, the heirs can agree on their own.
The law prescribes two forms by which a person may control the disposition of his properties after his death: Holographic Will and Notarial Will. Holographic wills must be written entirely by hand by the testator himself and the Notarial will may be type written but must be executed before a notary public with all the requisites stated by law. It is the most basic requirement that the person executes his will out of his own volition and that he be of sound mind. It is very important to remember that only half of the estate of the deceased is considered as the free portion which may be given by the testator to any person who is not his heir. The other half is the legitime which is reserved by law for the legal or compulsory heirs. This is a safeguard against the anger of the decedent who would want to deprive a child of his inheritance by not assigning him any property in the will. Should the share of each heir be equal? According to the civil code the heirs should have equal sharing with respect to the legitime but the testator may distribute the free portion according as he desires. So in reality only the free portion is available for the distribution according to the desires of the testator since the other half is reserved for the compulsory heirs. Can an heir be disinherited? Yes, an heir may be disinherited only on the grounds stated by the Civil Code on Articles 915-923.
Allowance of Wills
The will, in order to pass real or personal property to the instituted heir or heirs must be allowed by the court in accordance with the provisions of the Rules of Court. A petition may be filed by the executor, any heir, interested person or even the testator if he is still alive before the Regional Trial Court. Only after trial and the court has allowed the will can the assigned executor or administrator distribute the properties according to the will. The will, however may be disallowed if it is shown that it was not executed in accordance with law or if the testator did not execute it according to his own volition or that he was of unsound mind among others. If the court will not allow the will then it is as if there was no will and the rules on intestate succession will be followed. If the will does not contain a detailed manner of distribution but only states that an heir is being disinherited by reason a ground under the civil code, the will is still valid and the disinheritance may be followed and the properties may be distributed according to the rules of intestate succession.
The rules on succession can be described as complicated even for lawyers and this tells us that the law puts much importance on the passing of the decedent’s properties to his heirs. The law balances the welfare of the heirs with the intention of the testator by reserving half to the compulsory heirs.
