From Forebears to Heirs: Bequeathing Property in the Philippines

“…but in this world, nothing can be said to be certain, except death and taxes.”

– Benjamin Franklin, in a letter to Jean-Baptiste Leroy, 1789

By Realttorney^®

This article was written for Filipino-Americans and other Filipinos who are dual citizens and have inheritance in the Philippines from deceased relatives. It is also for Filipino-Americans or non-resident Filipinos who own real estate in the Philippines. This is your guide to heirs, wills or no wills, and estate taxes in the Philippines.

So, let us begin.

Whether you own one or several real estates, or have an inheritance here in the Philippines, you’ve probably thought about what will happen to the parcel of land, house, or condominium unit when you or your close relative passes away. How can you secure your rights to the inheritance? How can you make sure that your properties in the Philippines end up in the right hands, without creating family conflict and needless litigation?

In all parts of the world, transferring real estate to the heirs of property owners is not as simple as writing their names on a piece of paper. There’s a legal process, documentary requirements need to be prepared, and yes, estate taxes must be paid before you or your loved ones can truly claim ownership.

Now let us start to detail everything you need to know about how to pass on property in the Philippines from the registered owner, especially if you’re living abroad. Whether you’re an heir who is a co-owner of properties in the motherland or a property owner planning for the inevitable, this guide will walk you through the process, clearly and confidently.

🧬 Who Can Inherit Property in the Philippines?

Let’s learn the basics first: Under Philippine law, real estate can pass to a select few, if the decedent passed away with or without a will.

✅ Compulsory Heirs Include: (1) Your legitimate children or descendants; (2) Your parents or ascendants, if you have no children; (3) In some cases, illegitimate children are also entitled; and (4) Your spouse.

✳️ These heirs are entitled to a “legitime”, a portion of your estate that the law reserves for them. You cannot freely dispose of this portion if a will has been executed by the testator. However, if you die without a will, your estate will be distributed based on intestate succession rules under the Civil Code. It is up to the property owner to make a last will and testament. But seek competent legal advice for this. And, if you get word that you have an inheritance from a relative in the Philippines, then you have to determine whether your relative passed with or without a will.

🪪 Step-by-Step: Legal Process for Transferring Property to Heirs

When a person passes away, the property does not automatically pass to the heirs. Here’s the process that must be followed:

Step 1: Determine If There’s a Will.

With a will (testate succession): The will must be probated in court. You need to contact the Executor of the will to determine what is to be bequeathed to you.

Without a will (intestate succession): The estate will be divided among the legal heirs as per the provisions of the law on intestate succession – the default estate plan of the State in the Philippines.

📌Note: Even if the will was executed abroad (e.g., in the U.S.), it must still be “probated” in a Philippine court if it involves property in the Philippines. The process involves the filing of a Petition for Recognition of Foreign Judgment in the trial court where the property is situated. The foreign judgment here is the Order of the Probate Court in the United States.

Step 2: Prepare and Settle the Estate.

What needs to be prepared? Before collating all the required documents for the processing of the settlement of the estate, whether via will or not, one must first identify all properties, both personal and/or real. Next is to determine the value of each property in the name of the registered owner.

After this, if the estate is liquid, then paying the debts and liabilities of the deceased person is in order. However, if the estate is illiquid, then the heirs should agree to sell the property to pay for all the debts and liabilities that are outstanding.

These steps will be hassle-free if all the heirs agree to be civil and amicably discuss anything and everything about settling the estate. However, disputes among the heirs are not uncommon, especially when the value of the estate is enormous, or there is an unresolved family issue from the past.

When all heirs are in unison, they can execute an Extrajudicial Settlement of Estate to be used as the transferring document at the settlement of the estate before various government agencies in the Philippines. Collate the documents that are needed for submission to the Bureau of Internal Revenue, the Local Government Unit, and the Registry of Deeds.

💡Tip: Engage an experienced estate attorney in the Philippines to guide you and avoid costly errors or delays.

Step 3: Pay the Estate Tax.

📉 Last May 7 and 8, 2025, I had the privilege to lecture regarding the settlement of the estate (entitled, “From Forebears to Heirs”) and taking advantage of the benefits of the estate tax amnesty, which expires on June 14, 2025. Now, if you want to settle the estate of a deceased relative after June 14, 2025, then you need to understand the following points.

1. The estate tax rate is 6% based on the value of the net estate.
2. The standard deduction is PhP 5 million for citizens in the Philippines.
3. The standard deduction for a non-resident not a citizen of the Philippines is PhP 500,000.00.
4. The deduction on the market value of the decedent’s family home is now PhP 10 million.
5. The Estate Tax Return (BIR Form 1801) should be filed within 1 year from the date of death. Any filing passed this period will merit penalties, surcharges, and interest on the estate tax due.
6. The estate tax return showing a gross value exceeding PhP 5 million shall be supported with a statement duly certified by a CPA.
7. Payment by installment shall be allowed within 2 years from the statutory date of its payment without civil penalty and interest.

✅ Kindly note that the share of the decedent in the Family Home is only half of the total allowable amount since he or she is merely a co-owner of the house and lot that is identified as a conjugal or community property. And, finally, if the net value of the estate is under PhP 5 million and you claim the full standard deduction, you may not owe any estate tax.

Once the net estate has been determined based on the documentary requirements submitted to BIR, the payment of the estate tax is now in order at the Authorized Agent Banks (AABs) or the Revenue Collection Officer at the Revenue District Office (RDO).

Step 4: Transfer Title to Heirs. Once the estate tax is paid and the documents submitted at the BIR, the Certificate Authorizing Registration (CAR) shall be forthwith issued. Along with the (1) CAR, you need to prepare these documents: (2) the original copy of the transferring document – will or EJS – that was processed by the BIR; (3) original owner’s duplicate copy of the Torrens title; (4) certified electronic copy of the existing land title; (5) certified true copy of the tax declarations; (6) tax clearance; (7) Heir’s Bond and (8) the valid IDs of all the heirs, among others.

📌 These documents will be submitted to the Registry of Deeds in order to cancel the old land title and eventually issue a new Transfer of Certificate of Title. The registration fee for the transfer of the land title in the name of the new owner is the final expense that will be paid by the heirs.

⚠️ Only after this step can the property be legally owned by the heirs in the eyes of the Philippine government. Heirs cannot transfer, sell, or mortgage the property until the estate tax is paid.

🔑 Options for the Settlement of Estate. There are two primary ways to settle an estate in the Philippines:

1. Judicial Settlement. This is the option when there is a Last Will and Testament that was executed by the testator before his or her death. But, if there is no will and the Heirs are in conflict with each other, then there is no other option but to go to court to settle the dispute between the heirs.

Finally, if one or more heirs is a minor and the property belonging to the estate will be sold to a prospective buyer, then the portion of the minor to be sold should be confirmed by the Family Court to make it legal and valid.

The Court proceeds with the probate and oversees the distribution of the properties owned by the testator and the payment of all outstanding debts and liabilities to the creditors of the testator.

2. Extrajudicial Settlement (EJS) of Estate. This option is often used when the deceased left no will. It should be noted that the execution of the EJS is not under any provision of the law on succession. It is based on the Law on Contracts.

The EJS is a document where all the heirs of the deceased agree to adjudicate and partition among themselves the entire estate of the deceased relative. The heirs should be of legal age. But, if some are not of legal age or an incapacitated to sign a contract, then they should be adequately represented by an Attorney-in-Fact or a duly appointed Legal Guardian by a Family Court.

This document should be notarized and must be published in a newspaper of general circulation once a week for 3 consecutive weeks. An Affidavit of Publication will be given at the end of 3 weeks of publication. Then this Affidavit should be submitted to the Registry of Deeds, as part of the documentary requirement for the transfer of the Torrens title to the names of the Heirs.

💡 You can also opt to partition the estate via waiver of rights, donation, or sale among heirs simultaneously with the settlement of the estate of the deceased relative.

📄 Important Documents You Need to Prepare

Whether you’re in the U.S. or any country in the world, make sure to prepare the following for submission to the BIR:

1. Death certificate (issued by PSA or foreign equivalent).
2. Birth certificate (issued by PSA or foreign equivalent).
3. Marriage certificate (issued by PSA or foreign equivalent).
4. Deed of Extrajudicial Settlement or probate documents.
5. Original owner’s duplicate copy of the land title (OCT/TCT/CCT).
6. Tax Declaration from the local assessor’s office.
7. Tax Clearance for the current year.
8. Valid IDs of all heirs.

The BIR Certificate Authorizing Registration (CAR) is the proof of estate tax payment and any other taxes paid as a result of the settlement of the estate of the deceased.

🗺 What If the Heirs Are Overseas?

If heirs are in the U.S. or any other country in the world, here are some tips:

Sign SPAs abroad and have them authenticated by the Philippine Consulate, or an Apostille Certification has been issued by the foreign ministry of the host country, whichever is applicable.

Coordinate with an experienced estate lawyer in the Philippines to process probate, tax filing, and title transfer.

Ensure you have TINs (Tax Identification Numbers) issued by the BIR—required for all heirs, even if abroad.

Consider setting up a family corporation or trust to manage the property, especially for large estates or multiple heirs. For complex estate planning issues, it is best to consult an estate planning professional in the Philippines. Apart from setting up a family corporation or trust, consider other Estate Planning Tools like life insurance that can help preserve wealth and reduce tax exposure.

📣 Final Thoughts

Transferring property to your heirs in the Philippines can be smooth and rewarding, but only if you plan ahead. As a Filipino-American or overseas Filipino, you’re already navigating two legal systems—so don’t leave it to chance.

Get the documents ready, talk to a licensed estate lawyer, pay the necessary taxes, and, most importantly, make sure your wishes are clear and legally valid.

That way, when the time comes, your loved ones can focus on remembering you, not struggling through bureaucracy.

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Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.