Extrajudicial Settlement of Estate
Extrajudicial Settlement of Estate
An Extrajudicial Settlement of Estate allows the transfer of a deceased's assets to the heirs without court in any division that the heirs desire so long as all of the heirs agree. It is a faster and cheaper way to settle an estate and should be considered when no will is present or when a will is invalid. It is the most recommend way to settle an estate.
WHY DO YOU NEED AN EXTRAJUDICIAL SETTLEMENT?
TRANSFER TO THE HEIRS
You can only transfer an estate to the heir when it has been settled. An EJS is the fastest & cheapest way to do so.
AVOID LATE FEES
You should settle an estate as soon as possible because every year of delay increases the late fees charged to the estate.
PROTECT AN INHERITANCE
Settling an estate transfers property to the rightful heirs and helps prevent others from claiming it.
SELL OR PROFIT FROM THE PROPERTY
Serious buyers need proof an estate is settled before they buy a property, as it is required prior to titling in their own names.
Agreement Between Heirs
Property Docs
Family Docs
6% BIR Estate & Transfer Taxes
EXTRAJUDICIAL SETTLEMENT
STEPS
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FREQUENTLY ASKED QUESTIONS
An extrajudicial settlement is a method of distributing the estate of a deceased person without going through the court process of probate or intestate proceedings. In the Philippines, this process allows the heirs to agree on the division of the estate among themselves, in accordance with the law, and execute a document called an Extrajudicial Settlement of Estate (EJS).
Yes. Actually, an Extrajudicial Settlement is the only way that land can be transferred to a foreigner. However, he will inherit along with the other compulsory heirs in the proportions stated in Philippine Intestate Law.
An extrajudicial settlement can be used when the deceased left no will and all the heirs agree on the division of the estate and are willing to sign documents to that effect.
To execute an extrajudicial settlement, all heirs must be in agreement on the division of the estate and must sign the a written and notarized EJS which must be filed at the BIR. Estate taxes must be settled and then the transfer must then be recorded at the Registry of Deeds and City Hall.
In an extrajudicial settlement, the heirs are required to post a bond equivalent to the value of the personal property involved, as determined by the parties or appraisers. This bond serves as a guarantee to protect the interests of any unknown heirs, creditors, or other interested parties who may come forward within two years after the settlement.
Yes, an extrajudicial settlement can be contested. If there are parties who believe they have a
rightful claim to the estate or that the EJS is not in accordance with the law, they may file a petition in court within two years from the date of the last publication of the ESE.
If there are minor or incapacitated heirs, an extrajudicial settlement may still be executed. However, a legal guardian must be appointed to represent the interests of the minor or incapacitated heir during the settlement process.
The Estate Taxes are 6% of the net value of the estate but Donor’s tax may also be added depending on the situation.
Aside from Estate Taxes, there are other transfer taxes at the Registry of Deeds and City Hall prior to the release of the Title and the new Tax Declaration.