Discussion Questions Chapter 13

1. What is succession?
It is a mode of acquisition by virtue of which the property, rights and obligations to the extent of
the value of the inheritance, of a person are transmitted through his death to another or others either
by his will or by operation of law. In short, when a person dies, his properties are transferred to another
person, by his will or by operation of law.
2. What is inheritance?
These includes all the property, rights, and obligations of a person which are not extinguished by
his death.
3. Enumerate and discuss each of the types of succession.
1. Testate/ Testamentary succession. This is when an heir is designated through a will executed
in the form of prescribed law.
2. Legal/Intestate Succession. This is when a decedent dies without a will or with a will but
invalid, the distribution of his properties shall be in accordance of the law on succession (Civil Code).
3. Mixed Succession. The transmission of the decedent’s properties shall be partly by virtue of a
written will and partly by operation of law.
4. What is a will? Discuss briefly.
A will is an act whereby, a person is permitted, with formalities prescribed by law, to control to a
certain degree the disposition of this estate, to take effect after his death. It is an expression of the
decedent’s desire on how his properties will be distributed after his death.
5. Enumerate and explain each of the elements of succession.
1. Decedent. The one whose property is transferred through succession, whether or not he left a
will. If he left a will, he is called a testator.
2. Estate. These are the property, rights, and obligations owned by the decedent which are not
extinguished by his death. It is also called inheritance.
3. Heirs. They are the ones whose inherit the estate if the decedent, either by the provision of a
will or by operation of law.
6. Briefly discuss the types of compulsory heirs and their order of succession.
Compulsory heirs are person who will inherit the estate by default. The types of compulsory
heirs are:
1. Primary heirs. They are the legitimate children and their direct descendants.
2. Secondary heirs. They are the legitimate/illegitimate parents and ascendants.
3. Concurring heirs. They are the surviving spouse and illegitimate descendants.
7. Briefly discuss the sharing of inheritance under intestate succession.
Here are following heirs in descending order of priority:
1. Compulsory heirs. They are the person who will inherit by default. And there are three types
of compulsory heirs which are mentioned in question number 6. Usually the primary heirs and
concurring heirs share in the hereditary state. In the absence of primary heirs, secondary heirs and
concurring heirs shall share in the hereditary state.
2. Relatives up to the fifth degree of consanguinity. In the absence of the compulsory heirs,
relatives (up to 5th degree) shall share in the hereditary state. These are the brothers and sisters of the
decedent (2nd degree), the aunt, uncle, niece, and nephew (3 rd degree), and the 1st cousins and 1st
cousins of grandparents (4th degree).
3. Republic of the Philippines. In the absence of the compulsory heirs and the relatives up to the
th
5 degree, The Philippine government shall take share of the hereditary estate.
8. What is legitime?
It is the part of the testator’s property which he cannot dispose of because the law has reserved
it for certain heirs, who are, therefore, called compulsory heirs.
9. What is estate taxation?
This pertains to the taxation of the gratuitous transfer of properties of the decedent to the heirs
upon the decedent’s death.
10. Enumerate and explain the nature of estate tax.
1. Excise tax. This is the tax on the privilege of transferring properties through death.
2. Revenue/General tax. It is intended as a revenue or fiscal measure.
3. Ad valorem tax. It is dependent upon the value of the estate.
4. National tax. It is imposed by the government.
5. Proportional tax. Imposed as 6% on the net estate.
6. One-time tax. This tax applies to a person only once in a lifetime.
11. What are the two classifications of decedents? Discuss their estate taxation.
1. Resident or Citizen Decedents – these are either resident citizens, resident aliens, and non-
resident citizens. They are taxable on properties located within or outside the Philippines.
2. Non-resident Alien Decedents – they are taxable only on properties located in the Philippines,
except those intangible properties when the reciprocity rule applies.
12. Illustrate the estate tax model.
Gross Estate xxx
Less: Deductions from gross estate xxx
Net taxable estate xxx

Gross estate pertains to the totality of the properties owned by the decedent at the point of his
death.
Deductions pertains to the reductions in the inheritance of the heirs, such as obligations of the
decedents and losses of property during administration.
Net taxable estate is the net properties of the decedent after all pertinent deductions allowable
by law, which is the basis of estate tax.