Most people who are investing in a real estate property are not only after the profit that it will generate in their lifetime. One of the top reasons why people who have the capability to purchase personal property are getting into real estate investing is because it is considered to be one of the best assets that will last for generations. Thus, one of the top issues that arise in relation to inheritance laws in any country is having one’s estate divided equally.
In the Philippines, a real estate investor who is planning to purchase properties for sale with the intent of passing it to the legal heirs after the person dies is advised to be at least familiar with the laws governing inheritance and donation in the country. Having the basic knowledge in this subject will lead to effective estate planning and distribution of assets following a person’s death.
Getting yourself familiar with the laws concerning inheritance in the Philippines? This article will provide a basic knowledge to help you get started on the subject.
Understanding the inheritance laws in the Philippines is crucial so people can ensure that their assets are distributed according to their preferences and that their loved ones are going to have access to those assets without issues after passing. Learning the principles and procedures under inheritance law is extremely beneficial to every person who own various assets in the Philippines—may it be financial assets, real estate properties, or any other assets that can passed on.
Since there are complexities and challenges that are associated with inheritance, speaking with a lawyer or estate planning specialist is highly recommended to ensure compliance with the law. Estate planning, how grim as it may sound, should be taken into account by everyone to guarantee the equitable distribution of assets. This will ensure the preparation of an extensive estate plan that satisfies the owner’s requirements and goals. Although, those who want to have an overview about this subject, below are the most common topics being discussed when it comes to inheritance law.
There are different basis in which an inheritance is being divided under the Philippine law.
If the person has a legal will upon passing, the assets will be distributed under the terms of their will given that the legal document is correctly written and adheres to the Family Code and Civil Code’s provisions. The term ‘testate’ came from the individual who writes the will who is being referred to as the testator. The testator can decide how to divide their assets among their heirs, subject to certain legal restrictions which should be discussed with a legal practitioner.
If the person does not have a legal will upon passing, the assets will be distributed following the laws of intestate succession. The heirs who are still alive will receive the property according to their legal standing with the deceased asset owner.
On the other hand, the intestate succession is as follows:
Unlike some nations in the world, forced heirship is a concept that exists in the Philippines. This implies that some legal heirs are entitled to a share of the deceased’s personal property regardless of the provisions of the testator’s legal will.
These legal heirs refer to parents or ascendants, children and descendants, surviving spouse, and spouses.
The donations made by the deceased person during their lifetime can make an impact to the distribution of the assets after death. The law can also impose limitations and obligations on these donations, contributions, or gifts.
In the Philippines, courts often handle probate cases. This include proceedings to validate wills, identify the legal heirs, and distribute assets following the will’s wording or the laws of intestate succession.
Mandatory heirs—legitimate child, illegitimate child, legitimate and illegitimate parents, legitimate spouse— will automatically receive the deceased’s inheritance as stated under the Philippine law of intestate succession. The said estate includes personal belongings and real property that belonged to the deceased. Although, there is a rule that states the heirs must transfer the title of the properties under their names before they can sell or develop the inherited properties.
Without a will, the surviving heirs must sign an Extra-Judicial Settlement of Estate (EJS) which is a notarized legal document that lists the assets included in the deceased’s estate and the details of the agreed-upon method of division among the legal heirs.
In the process of transferring the assets to legal heirs, the Estate Tax Return (ETR) must be submitted and settle the applicable estate taxes to the Bureau of Internal Revenue (BIR) in the Philippines. Once this is accomplished, the BIR will then give permission to the Registry of Deeds to transfer the title of the properties to the all the heirs when the BIR verifies the ETR.
To those who want to know more about Estate Tax Amnesty or General Tax Amnesty, a discussion with a lawyer might be required. There also might be other inheritance tax that must be settled prior the distribution of assets.
The rules for compulsory heirs have been detailed in the Article 887 of the Philippine Civil Code.
Compulsory heirs, as the name suggests, are compulsory because they are considered automatically included in the estate distribution without doing anything.
Many people believe that leaving a good legacy means being able to take care of the people they love even when they are no longer around physically. This is why many people work twice as hard to provide for their families, not just for their present needs but even for the future.
Investing in a real estate property is one of the best things to do for your loved ones. In a generation where acquiring a property is getting harder each passing day, making this dream a reality for the people you love is the best gift a person can ever give. Removing the pressure of owning a home from the people we care about is something that will surely resonate for generations.
One of the top luxury real estate developers in the Philippines, Brittany Corporation, is making this dream a reality for many families. With their extensive portfolio of top-of-the-line residential homes, Brittany stands out in the sea of options when it comes to luxury real estate.
What are you waiting for? Find out how you can invest in luxury real estate today! Go to their official website to get to know more about Brittany or follow their social media accounts for the latest updates.
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