The Title Is Still in Nanay's or Tatay's Name. What Now?
This happens to many families in Guimaras. A parent dies, and the family keeps farming the lot in Jordan or living in the house in Buenavista. Years pass and the title stays in the parent's name. Then someone needs to sell a portion, borrow against the land, or just put the papers in order. That is when the family learns the land cannot be properly dealt with until the title is transferred to the heirs.
If the land already has a title (an OCT or TCT), the usual way to do this is an extrajudicial settlement of estate. This guide explains how it works. If your inherited land has no title yet, the process is different. Our earlier post on titling untitled inherited land through free patent covers that.
Indi kamo magkabalaka. When the documents are complete and the heirs cooperate, this is a manageable process.
When Is Extrajudicial Settlement Allowed?
Under Rule 74, Section 1 of the Rules of Court, heirs may settle an estate without going to court if all of these are true:
- The deceased left no will.
- The deceased left no debts, or the debts have been paid.
- All heirs are of legal age, or any minor heirs are represented by their judicial or legal representatives.
- The heirs agree on how to divide the property.
The heirs sign a public instrument, usually a notarized Deed of Extrajudicial Settlement of Estate, and file it with the Register of Deeds. If there is only one heir, that heir signs an Affidavit of Self-Adjudication instead.
The same rule requires the settlement to be published in a newspaper of general circulation in the province once a week for three consecutive weeks. If the estate includes personal property, such as bank deposits or vehicles, a bond equal to the value of that personal property is also required.
Who Are the Heirs?
The surviving spouse's half comes first
If the parent who died was married, the land may be conjugal or community property. Before anything is divided, the conjugal partnership or absolute community under the Family Code must be liquidated. The surviving spouse's half already belongs to the surviving spouse and is not part of the estate. Only the deceased spouse's half is inherited.
Then the estate is divided among the heirs
Under the Civil Code rules on intestate succession, when the deceased leaves a surviving spouse and legitimate children, the spouse gets a share equal to the share of each child (Article 996). Illegitimate children are also compulsory heirs. Under Article 176 of the Family Code, an illegitimate child's share is half of a legitimate child's share. If a child died before the parent, that child's own children may inherit in that child's place.
Getting the list of heirs right is important. If a rightful heir is left out, the settlement can be challenged later, and an excluded heir is generally not bound by it.
Step-by-Step: Transferring the Title to the Heirs
Step 1: Gather the documents
Collect the papers listed in the next section. The owner's duplicate copy of the title is essential. If it has been lost, deal with that first (see our post on reissuance versus reconstitution of title).
Step 2: Prepare and sign the deed
The deed names the deceased, all the heirs, and the property, and states how the property is divided. Every heir signs it before a notary public. Heirs who work in Iloilo City can come home to sign. Heirs abroad can sign a Special Power of Attorney authorizing a relative to sign for them. An SPA signed abroad must be apostilled, since the Philippines is a party to the Apostille Convention, or consularized, depending on the country where it is signed.
Step 3: Publish the deed
Have the deed published once a week for three consecutive weeks in a newspaper of general circulation in the province, and keep the publisher's affidavit of publication.
Step 4: Settle the estate tax with the BIR
Under the National Internal Revenue Code as amended by the TRAIN Law (RA 10963), the estate tax for deaths from January 1, 2018 onward is 6% of the net estate, with a standard deduction of P5,000,000. If the death happened earlier, the rules in force at the time of death may apply. The estate tax return is generally due within one year from death. Late filing can lead to penalties and interest, so ask the BIR whether any amnesty or relief program is currently available.
Once the tax is settled, the BIR issues an eCAR (electronic Certificate Authorizing Registration). The Register of Deeds will not transfer the title without it.
Step 5: Pay the transfer tax
Under the Local Government Code, a transfer tax is paid to the Provincial Treasurer's Office of Guimaras.
Step 6: Register with the Registry of Deeds of Guimaras
Submit the deed, the eCAR, proof of payment of the transfer tax, the owner's duplicate title, and the other requirements, then pay the registration fees. Under PD 1529, the old title is cancelled and a new TCT is issued in the heirs' names. The new title will carry an annotation about the two-year liability under Rule 74, Section 4 (see the FAQ below).
Step 7: Update the tax declaration
Finally, bring the new title to the municipal and provincial assessor so the tax declaration is updated to show the heirs as owners.
Documents to Prepare
- Death certificate of the deceased (PSA copy)
- Marriage certificate of the deceased, if married
- Birth certificates of all heirs
- Owner's duplicate copy of the title and a certified true copy from the Registry of Deeds
- Latest tax declaration and proof that real property taxes are paid
- Valid IDs and TINs of the heirs
- SPAs for heirs who cannot sign personally
- Notarized deed and affidavit of publication
- Other documents the BIR or Registry of Deeds may require for your particular case
What Affects the Cost?
Costs differ from one family to another. The main factors are:
- The value of the property, which affects estate tax and transfer tax
- How long ago the parent died, since penalties and interest may apply
- The number of properties and heirs
- Newspaper publication charges
- Notarial and professional fees
- Fees for certified copies, apostille or consularization, and registration
How Long Does It Take?
There is no fixed timeline. The time depends on how quickly documents are completed, whether every heir is available to sign, how long publication takes, how long the BIR and the Registry of Deeds take to process the papers, and whether issues come up, such as a lost title or mismatched names across documents.
When Extrajudicial Settlement Will Not Work
- There is a will. A will must be probated in court. Heirs cannot skip probate by doing an extrajudicial settlement.
- The heirs disagree. If the heirs cannot agree, the remedy may be judicial settlement of the estate or a court action for partition under Rule 69.
- There are unpaid debts. The estate may need to be settled in court so creditors can be dealt with properly.
Frequently Asked Questions
Can one heir sign for everyone?
Only if the other heirs have given that heir a valid Special Power of Attorney. Otherwise, every heir must sign the deed.
My brother lives abroad. Does he need to come home?
Not necessarily. He can sign an SPA where he lives and have it apostilled or consularized, as applicable, so a relative in Guimaras can sign for him.
What is the two-year period I keep hearing about?
Under Rule 74, Section 4, an heir or creditor who was unduly deprived of a share may assert a claim within two years after the settlement and distribution. That is why the new title carries this annotation. Note that an heir who did not take part in the settlement is generally not bound by it, so leaving someone out can create problems even after the two years pass.
Our parent died many years ago. Can we still do this?
Generally, yes. Extrajudicial settlement is still possible, but late estate tax filing may involve penalties and interest. Ask the BIR about your situation.
Do we need to divide the land into separate titles right away?
No. The heirs may hold the land together as co-owners under one title. Subdividing it later requires a survey and further steps.
Disclaimer: This article is general information only, not legal advice, and reading it does not create a lawyer-client relationship. Consult a lawyer about your specific situation.
Consult with Edang Law
Families in Jordan, Buenavista, Nueva Valencia, San Lorenzo, Sibunag, and elsewhere in Guimaras, including heirs now living in Iloilo or abroad, may contact Edang Law Office for a consultation to review their documents and talk through their options. Call 0939 920 7932, email info@edanglaw.com, or visit us at the 2nd Floor, JACQ Commercial Building, San Miguel, Jordan, Guimaras, Monday to Saturday, 8:00 AM to 5:00 PM.
