Problem 2-1.

True or False

Write True if the statement is correct, or False if the statement is incorrect.

1. Transfer tax is a tax on onerous transfer

2. All donations are subject to donor’s tax.
3. A gratuitous transfer is always subject to estate tax or donor’s tax.
4. A gratuitous transfer involves no consideration.
5. A sale is a form of transfer transaction that requires payment of transfer tax.
6. Compulsory heirs include illegitimate children.
7. The compulsory heirs have rights to insist that the legitimate be given in the form of property.
8. Brothers and sisters are compulsory heirs.
9. Intestate succession is a legal succession.
10. In the intestate succession, the distribution of properties is fixed by the testator.
11. A testator is a person who would administer the transfer of property through a written will.
12. Probate determines the validity of a Will.
13. Cancellation of existing debt as payment for services rendered by the debtor to the creditor is a
gratuitous transfer.
14. The estate tax is imposed upon the decedent, heirs, beneficiaries, or properties.
15. The right of succession shall take effect upon the death of the testator.
16. The transfer tax accrues at the time of transfer of the decedent’s property or rights to the heir.

Problem 2-2. True or False

Write True if the statement is correct, or False if the statement is incorrect.

1. Brothers and sisters can become heirs in the legal succession.

2. An oral will corroborated by witnesses is valid.
3. In the absence of a legitimate child, the illegitimate child succeeds his rank in the succession over
the decedent’s parents and surviving spouse.
4. The property left by the decedent without a will shall be transferred in favor of the government.
5. A free portion of the estate could be transferred to compulsory heir by virtue of a will.
6. The presence of a legitimate child eliminates the grandparents from the legitime.
7. If there are two or more legitimate children or descendants, the surviving spouse shall be entitled to
portion equal to the legitime of each of the legitimate child.
8. An adopted child has no equal rights with a legitimate child with regards to the legitime.
9. Disinheritance can be effected only through a will wherein the legal cause must be specified.
10. In case doubt, testamentary succession is preferred over legal or intestate succession.
11. The presence of a legitimate child eliminates the ascendants from the share of the estate.
12. When the only surviving spouse relative is within the fifth degree in the collateral line, the State will
be the legitimate heir of a descendant’s estate.
13. In all cases, the surviving spouse shall receive one- half of the net distributable estate.
14. Legitimate parent cannot inherit if legitimate children are present.
15. Legitimate and illegitimate child has equal share under intestate distribution of estate.

Problem 2-3. Multiple Choice (Theory)

Encircle the letter contains the best answer.

1.