What do you do if a loved one dies without a will? One of our previous articles covered the law of intestate succession. To recap, intestate succession is the distribution of assets of someone who died without a written will. This process could be handled by the law and the state, who will then divide and distribute it to the compulsory heirs. However, the distribution of assets doesn’t always have to involve the court. It could instead undergo a process called an Extrajudicial Settlement of Estate. Here’s what you need to know about this practice.
What is an Extrajudicial Settlement of Estate?
Extrajudicial Settlement of Estate is a procedure in which all heirs can agree on how the deceased’s assets are distributed. Extrajudicial means ‘out-of-court’; because all heirs are in agreement, there is no need for them to go to court. Once everyone has agreed on how they can divide the assets, they will have to create a Deed of Extrajudicial Settlement of Estate. This is to set the agreements in stone.
What are the requirements of an Extrajudicial Settlement of Estate?
There are several requirements that must be met first before the deceased person’s assets can undergo an Extrajudicial Settlement of Estate. These include the following:
- The deceased left no will
- The deceased has no debts or his/her debts have been fully paid
- The heirs are all of legal age or the minors are duly represented by their judicial or legal representatives
- All heirs come to an agreement
In addition, the Deed of Extrajudicial Settlement of Estate must be notarized and filed with the Register of Deeds. The Deed must also be published in a newspaper of general circulation once a week for three consecutive weeks. Otherwise, the settlement will not be considered valid.
What documents are required for the Extrajudicial Settlement Process?
It’s important to gather the following documents before you start the Extrajudicial Settlement Process:
- A true copy of the deceased’s death certificate
- Proof of affiliation such as birth certificates, marriage certificate, etc.
- Tax Identification Numbers (TIN) of the deceased and the heirs
- Notarized Deed of Extrajudicial Settlement of Estate
- Affidavit of Publication
- Relevant documents related to the deceased’s estate, such as original copies of land titles, certificates of shares of stock, tax declarations, etc.
What steps are in the Extrajudicial Settlement Process?
- Prepare all necessary documents.
- Send the documents to an Inheritance Lawyer to draft the Deed of Extrajudicial Settlement.
- Have all heirs sign the Deed.
- Have the Deed of Extrajudicial Settlement notarized.
- The Deed will then be published in a newspaper of general circulation once a week for three weeks.
- Pay the Estate Taxes. The heirs must pay within six months from the date of the deceased’s death.
- Once you’ve secured the Certificate Authorizing Registration, pay the transfer tax to the City Treasurer’s Office.
- Finally, you will be able to submit and register your Deed with the Registry of Deeds.
Miscellaneous Questions
What if an heir doesn’t want his or her claim to the estate?
If one or more heirs don’t want their claim to the estate, all of the heirs must instead create an Extrajudicial Settlement with Waiver of Rights. Besides the addition of the Waiver of Rights, it’s identical to a regular Deed of Extrajudicial Settlement. The Waiver of Rights allows one or more heirs to relinquish their claim to the estate.
What if there is only one surviving heir?
If there is only one surviving heir that can claim the estate, he or she can instead execute an Affidavit of Self-Adjudication. This is a statement written under oath by the heir, declaring that he or she is the only heir of the deceased. This allows him or her to adjudicate the entire estate to him/herself.
Conclusion
Completing the procedure of an Extrajudicial Settlement of Estate can be quite difficult. Heirs might not agree with how the property is divided between them, and additional steps could force the process to prolong itself. But properly handling the deceased’s estate is crucial. One way to make it easier is by gaining the help of a skilled inheritance lawyer. Your lawyer can help you with gathering your requirements, drafting your Deed of Extrajudicial Settlement, and generally help you out throughout the entire process.