When There's A Will (Or No Will), There's a Way!

Losing a loved one is a deeply personal and challenging experience. As you navigate this difficult time, you might also be faced with the process of inheriting their hard-earned assets. The legal path for this transfer hinges on whether your loved one (the decedent) left a valid will. Understanding what to expect in each scenario can provide clarity and help you through this process.

Scenario 1: When There's a Will (Testate Succession)

If the decedent prepared a will, consider it their final instructions on how they wished their belongings to be distributed. As a potential heir named in the will, here’s a general overview of what to anticipate and the government agencies involved:

  • The Will: You’ll likely learn about the will's existence from family or a trusted advisor. This document specifies who gets what.

  • Probate (Regional Trial Court - RTC): The will typically needs to go through a court process called probate at the Regional Trial Court (RTC) where the decedent last resided or held property. This confirms the will is legal and valid.

  • The Executor: The person named in the will as the executor will usually handle the probate. Their tasks include going to court, listing all the decedent's assets, paying any debts and the estate tax to the Bureau of Internal Revenue (BIR), and then distributing the remaining assets as the will directs, with the court's approval.

  • Your Role: Be ready to provide identification and proof of your relationship to the decedent to the executor and potentially to the court. Stay informed about the court proceedings through the executor. Once the court approves the distribution and the BIR clears the estate tax, you’ll receive your inheritance, with property titles being transferred to your name at the Register of Deeds and other assets through the executor's actions with banks and other institutions (like the Securities and Exchange Commission - SEC for shares).

Scenario 2: When There's No Will (Intestate Succession) and Extrajudicial Settlement

If the decedent didn't leave a will, the Civil Code of the Philippines dictates who the legal heirs are and how the assets are divided. If all the legal heirs are adults, capable, and agree on how to split the inheritance, and there are no debts, a simpler process called extrajudicial settlement can be used.

  • Heir Agreement: All legal heirs must agree on how to divide the assets.

  • The Agreement (Notary Public): You and the other heirs will create a written agreement, usually with a lawyer, called an Extrajudicial Settlement Among Heirs. This needs to be signed and acknowledged by a Notary Public to become a public instrument.

    • Publication: The agreement usually needs to be published in a newspaper to inform any potential creditors.

  • Government Involvement:

    • Bureau of Internal Revenue (BIR): You’ll still need to pay estate tax to the BIR and get a clearance before transferring assets.

    • Register of Deeds: The notarized agreement and the BIR clearance are filed with the Register of Deeds to transfer property titles.

  • Banks and Other Financial Institutions: These institutions will require the notarized agreement and the BIR clearance to transfer other assets. The SEC might also be involved for the transfer of shares.

  • Your Role: You'll need to agree with the other heirs on how to divide the assets and provide necessary documents.

Key Differences for You:

Here are the key differences to keep in mind:

  • Decedent's Wishes:

    • With a Will: Assets are distributed according to the decedent's explicit instructions.

    • Without a Will (Extrajudicial Settlement): Assets are divided according to the law on intestate succession, as agreed upon by all heirs.

  • Court Process:

    • With a Will: Generally requires a mandatory court proceeding (probate) to validate the will.

    • Without a Will (Extrajudicial Settlement): Avoided if all heirs agree and there are no debts.

  • Handling the Estate:

    • With a Will: An executor named by the decedent manages the process under court supervision.

    • Without a Will (Extrajudicial Settlement): All heirs collectively manage the division and documentation.

  • Speed:

    • With a Will: Can take longer due to court procedures.

    • Without a Will (Extrajudicial Settlement): Usually faster and less costly.

  • Heir Agreement Necessity:

    • With a Will: Not strictly required for the distribution in the will.

    • Without a Will (Extrajudicial Settlement): Unanimous agreement among all legal heirs is essential.

Going through the process of inheritance, whether there's a clear will to follow or you're figuring things out with family through an extrajudicial settlement, can feel like a lot on top of everything else. But knowing the general steps, from the initial paperwork to finally getting the titles or access to accounts, can really make a difference in feeling like you're not completely lost. So, take it one step at a time, and remember that understanding the process is how you make sure what your loved one intended for you, their legacy, truly finds its way to you.

Feeling overwhelmed by the inheritance process? Aboveboard can help provide clarity and guidance during this challenging time. Reach out today for a free consultation, and let us support you in navigating the legal steps. Whether there's a will or not, there’s always a way.