SUCCESSION AND

ESTATE TAX
By Erica Jimenez
SUCCESSION

is a mode of acquisition by virtue of which DECEDENT

the property, rights and obligations to the
extent of the value of the inheritance, of a
person are transmitted through his death INHERITANCE
to another or others either by his will or by / ESTATE
operation of law.

HEIRS
 TWO TYPES
OF SUCCESSION
TESTATE LEGAL
testamentary succession intestate succession

is that which results from the designation of takes place if a person dies
an heir, made in a will executed in the form without a valid will.
prescribed by law. TESTATOR

➢ last will and testament ➢ operations of law

MIXED
ED
partly by virtue of written will
partly by operation of law
 ✓ HAND WRITTEN
An act whereby a person is permitted,
✓ DATED
VALID with formalities prescribed by law to a

WILL certain degree the disposition of his

estate, to take effect after his death.
✓ SIGNED

Holographic will
Notarial will
Codicil
 ✓ TESTAMENTARY CAPACITY
An act whereby a person is permitted,
✓ THE WILL MUST BE IN
VALID with formalities prescribed by law to a
WRITING
WILL certain degree the disposition of his
estate, to take effect after his death. ✓ SIGNED BY THE TESTATOR
Holographic will
✓ SIGNED BY AT LEAST 3
Notarial will
WITNESSES
Codicil
✓ SIGNED ON EVERY PAGE
AND ATTESTED
 ✓ ANNEXED
An act whereby a person is permitted,
✓ SIGNED BY THE TESTATOR
VALID with formalities prescribed by law to a
AND WITNESSES
WILL certain degree the disposition of his
estate, to take effect after his death. ✓ ATTESTED
Holographic will
Notarial will
Codicil
LEGAL
intestate succession
HEIRS
➢ operations of law

Default provision of the civil code:

1. Compulsory heirs • primary legitimate and direct descendants

• secondary legitimate or illegitimate parents and ascendants
• concurring surviving spouse or illegitimate descendants

2. Relatives (5th degree of consanguinity)

3. Republic of the Philippines
 1. Compulsory heirs

• primary legitimate and direct descendants

• secondary legitimate or illegitimate parents
• concurring surviving spouse or
illegitimate descendants

2. Relatives (5th degree of consanguinity)

secondary
3. Republic of the Philippines

concurring

primary
 1. Compulsory heirs

• primary legitimate and direct descendants

• secondary legitimate or illegitimate parents
• concurring surviving spouse or
illegitimate descendants

2. Relatives (5th degree of consanguinity)

3
3. Republic of the Philippines

2 4

5
Exclusive Properties Exclusive Properties

net interest
Common Properties
primary: Legitimate children 1 share

Surviving spouse 1 share

concurring:
Illegitimate descendants 0.5 share
 ILLUSTRATION
Mr. Richie Rich, a widower, died leaving
P45,000,000 estate for his two legitimate children,
Harold and Alex, and two illegitimate children, Elon
and John.
2 Legitimate children = 2 shares
2 Illegitimate children = 1 share

P45,000,000 / 3 x 1= 15,000,000 per legitimate

7,500,000 per illegitimate
Exclusive Properties Exclusive Properties

net interest
Common Properties
primary: Legitimate children 1 share

Surviving spouse 1 share

concurring:
Illegitimate descendants 0.5 share
 ILLUSTRATION
Don Uyong died leaving behind his widow, Mrs. Uyong, his legitimate children,
Max and Rey, and illegitimate children, Joan, Sylvia, and Eunice, as heirs.
Mr. and Mrs Uyong had the following properties:
Exclusive property of Don Uyong P 18,000,000
Exclusive property of Mrs. Uyong P 16,000 000
Net common properties P 36,000,000 ÷2
Exclusive Properties Distributable Estate = P 36,000,0000

2 Legitimate children = 2 shares

net interest Surviving spouse = 1 share

3 Illegitimate children = 1.5 shares
Common Properties P36,000,000 / 4.5 x 1 = 8,000,000 per legitimate and spouse
4,000,000 per illegitimate

primary: Legitimate children 1 share

Surviving spouse 1 share

concurring:
Illegitimate descendants 0.5 share
TESTATE HEIRS
testamentary succession

➢ last will and testament

1. Compulsory heirs
2. Other persons specified in the will
 An act whereby a person is permitted,
Legatee
with formalities prescribed by law to a
Devisee
VALID certain degree the disposition of his Executors
WILL estate, to take effect after his death. Administrator

Exclusive Properties

net interest • LEGITIME

Common Properties
• FREE PORTION
 GROSS ESTATE
LESS: DEDUCTIONS

DISTRIBUTABLE ESTATE ≠ NET TAXABLE ESTATE

actual hereditary estate