Chabter 7 Succession and Transfer Taxes The modes and mechanics of acquiring ownership and other real rights over property are fairly complex. One can gain, transfer and lose ownership on a number of ways. Under the» Civil..Code~ (CC), ownership - may .be- acquired “Art.712 (Civil Code); | through “Ownership is acquired by ‘occupation and by intellectual 1. Occupation creation. Ownership and other real 2. Intellectual creation fights over property are acquired 3. Law and transmitted by law, by 4. Donation donation, by testate and intestate ith succession, and in consequence é oo of certain contracts, by tradition. 7. Prescription They may also be acquired by 8. Succession means of prescription’ Transfer Defined _ Transfer-taxes are taxes imposed upon the gratuitous disposition of private properties or rights. Gratuitous=transfer is one that neither ssseeccieniorronoratcomvenesienstintiemniansiaioaicesanae’ The transfer of ownership is free because of the absence of financial consideration. Hence, gratuitous transfers are essentially donations. The reverse side of gratuitous transfer is onerous; one where the transferee gives consideration’ in return for the property or right(s) received. However, .onerous..transfers, are subject to business taxes instead of cetera Business taxes are discussed in chapters 7 to 9 of this Scanned with CamScannerton and. Crausfer Ties co eS 1. Estate tax 2. Donor's tax Gratuitous transfer or donation may take effect at the time of death of the donor or during the lifetime of both the donor and the donee. The former is known as “donation mortis causa” subject to estate tax while the latter is known as “donation. inter vivos” subject. to donor's tax. _, Consequently, transfer taxes, which are typically assessed on the net value of the taxable assets transferred, fall into two basic categories, namely, estate tax and donor's tax. Estate tax is discussed in Chapters 1 to 5 of this book while donor's tax is discussed in Chapter 6. Succession Defined {-. Since donation mortis causa takes effect upon the death of a decedent, it is appropriate to discuss first the concept of Succession. Succession 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 (Art.74 CC). The inheritance includes all the property, rights and obligations of a person which are‘not extinguished by his death (Art. 776 CC). The rights to the succession are transmitted from the moment of death of the decedent (Art. 777 CC), notwithstanding the postponement of the actual possession or enjoyment of the estate by the beneficiary. The “heirs succeed immediately to all the: property of the deceased ancestor at the moment of death as completely as if the ancestor had executed and delivered to them a deed for the same before his death. Pole Ie To be acquirediinherited by the Heir(s) “Cut-off Period ‘The amount of obligation acquiedinherted by AS of the date of death of the testator. ‘an heir should not be more than the combined Value of the properties and rights inherited, Scanned with CamScannerSuce sion and. Tiuesfer Tiwes Nature of transfer taxes Transfer tax is an excise tax. The subject matter of a transfer tax is the privilege of the transferor to gratuitously transfer property or rights which takes effect at the date of death of the transferor (known as transfer mortis causa subject to estate tax) or during the lifetime of the donor and the donee (known as transfer inter vivos subject to donor's tax). Although the amount of transfer tax is based on net estate or net gifts, it shall not be construed as a property tax. On this basis, transfer tax is classified as “excise tax” or privilege tax imposed on the act of passing the ownership of property and not on the value of the property or right. The Law that Governs the Imposition of Estate Tax It is a well settled rule that estate taxation is governed by the statute in force at the time of death of the decedent. The estate tax accrues as the date of death of the decedent and the accrual of the tax is distinct from the obligation to pay the same. Upon the death of the decedent, succession takes place and the right of the State to the tax the privilege to transmit the estate vests instantly upon death (Section 3, RR 2-2003). In the Philippines, succession itself (excluding the tax aspect) is governed by the Civil Code. ees 2 | ILLUSTRATION 1: | Pedro suffered an unexpected heart attack causing his death on November 1, 2021. | His estate is composed of the following Cash in bank 4,000,000 | Commercial building 5,000,000 | Cars 4,000,000 | House and lot 3,000,000 | | Juan isthe only heir ofthe decedent, Pedro's remains were cremated on November 8, | 021. The executor of Pedro's estate fled the estate tax retum and paid the corresponding estate tax on April 30, 2022. The properties left by the decedent were finally distrbuted to Juan on June 30, 2022. ‘Answer the following: ; Question 1; When will the transfer of ownership from the decedent to the heir take | effect? - | > Answer: November 1, 2021. 2 ‘The rights to the succession are transmitted the. it of | of the decedent (Nov. 4, 2021), notwithstanding the actual transfer dated June 30, 2022 (Ar. 777 CC). Scanned with CamScannerSuccession and Transfer Tages | Question 2: When should the estate tax accrue? “Answer: November 4, 2021 I | | | | | | | © The estate tax accrues immediately at the time of death. iespective of | | ‘actual date of fling the estate tax return. It shall be noted that the accrual of | the estate tax is distinct trom the obigaton to pay the same (RR 2-2003); | | (Lorenzo vs, Posads, 64 Phi. 353) | | | | | © Under the TRAIN Law, the fling of estate tax retum is within one (1) year from date of death. Question 3: Assume that Pedro's total outstanding liabilities as of the time of his death amounted to P 12,000,000, how much of the outstanding liabilities of the decedent should be assumed by Juan? | ‘ Answer: P10,000,000 © The amount of liabilty fo be assumed by the hei(s) shall be imited only to the tent ofthe value of properties endrightsinteied._ “Succession is a mode of acquisition by virtue of which, the propery, | fights and obligations to the extent of the valve of the inheritance \ cof a person are transmitted through his death to ancther or others ether by his will or by operation of law.” | | | ©. A774 ofthe Civil Code provides: “ Kinds of Succession (Art. 778 CC): Whenever a person dies leaving property (inheritance), a question normally arises as to how his property or estate will be dealt with by those s/he left behind. The answer depends on whether or not a decedent left a will” at the time of his death. The definition of “succession” as discussed in page 2, clearly states that the inheritance is transmitted either through /ast will and testament or by operations of law (in the absence of a /ast will and testament, the provisions of the Civil Code on Succession shall apply). A person is normally said to have died testate if he left a will (refer to the definition of a “will” in Page 13) at the time of his/her death and a person is said to have died intestate if such a person died without leaving _awill. To summarize, succession may be classified as: 1, :Testamentary or testate succession. A type of succession that results from the designation of an heir, made in a will executed in the form prescribed by law. Scanned with CamScannerfp [Loe Succession and. Transfer Tages 2... Legal or intestate succession. A type of succession which is effected by operations of law (based on the provisions of the civil code pertaining to succession) since the decedent did not execute a will or if the last will and testament executed by him is void. 3. Mixed succession. A type of succession which is effected partly by “will and partly by operation of law. The following cases ilustate the diffrent types of succession. Case A: Testamentary Succession { a ‘Assume the same data in illustration #1. In addition, assume that Pedro left a duly executed last will and testament transferring all his properties to Juan upon his death. Case B: Intestate or Legal Succession ( = ‘Assume the same data in illustration #1, except that Pedro did not execute a last will | and testament during his lifetime and Juan is the only legal heir qualified to inherit his | properties. In such a case, an intestate or legal succession exists. The estate of the | Seodant wil be disposed of in accordance with the provisions of law on inhertanoelsuccession, Lae) Case C: Mixed Succession ‘*> Assume the same data in illustration #1. Assume further that Pedro left a duly ‘executed last will and testament transferring all his properties to Juan upon his death. The “will” was dated November 1, 2020 or exactly one year before Pedro's death. In addition, assume that from the preparation of the will up to the date of his death, rental income from the commercial building amounted to P250,000. Of this amount, 150,000 was used to acquire a parcel land while the balance of P100,000 was deposited in a new bank account. Since the parcel of land and the new bank account were acquired by the decedent after November 1, 2020, the aforementioned properties | were not included in his will. Hence, a mixed succession exists. Some of the estate | will be transferred in accordance with the duly executed will (testamentary) while the ‘new parcel of land in Makati and the bank account will be distributed in accordance Lwith the law on succession (intestate or legal succession). 5 Scanned with CamScannerSuccession aid. Transfer ‘Liges CAUSES OF LEGAL SUCCESSION OR INTESTACY: 4. Ifa person dies without a will, or with a void will, or one which has subsequently lost its validity. ILLUSTRATION 3: CASE A: VOID WILL | | Juan Dela Cruz devised in his “will” one of his parcels of land located in Valle Verde | | Subdivision to one of his daughters, Maria Dela Cruz. Juan can neither write nor read | | “Chinese Mandarin” but it was the language used in his last will and testament. In | | such a case, the ‘wil’ shall be considered void. As a rule, the last will and testament | | shall be executed in a language or dialect known tothe testator to be considered valid, | | CASE B: "WILL" WHICH HAS SUBSEQUENTLY LOST ITS VALIDITY | On the eve of November 2, 2021, a day after executing his last wil and testament, the | testator accidentally obliterated the same, The testator was not able to prepare a new | “will” before his death. Consequently, there is no more “last will and testament” to | speak of. An intestate or legal succession exists. At the time of the decedent's death, | 2. When the “Will” does not institute an hei ILLUSTRATION 4: Pedro D. Magiba executed a last will and testament on November 1, 2021, devising a parcel of land located in Batangas to one of his daughters. However, Pedro failed to indicate an heir in his will. The devisee was simply desorbed as follows: “1 am devising my parcel of land in Batangas City fo my closest and favorite daughter.” Pedro D. Magiba (signed) Novernber 1, 2024 ‘Assume further that Pedro has five (6) children. = No heir was identified in the will. As a result, there is no valid “will” because | of the absence of an instituted heir. insti | | | | | | | | Scanned with CamScannerSuccession and. Casper Tages 3. Partial institution of heir. Consequently, intestacy takes place as to the undisposed portion. . Partial institution of heir means the entire estate was not disposed of in the last will and testament. Therefore, a mixed succession ‘exists. Part of the estate will be disposed of or distributed to the heirs based on the last will and testament. Nonetheless, since there are properties in the estate that were not included in the will, such properties shall be disposed of in accordance with law (only as to the undisposed portion or as to the portion of the estate not mentioned in the will). USTRA’ ‘% Refer to CASE C of illustration No. 2. 4, Other causes of legal succession or intestacy: » . When the heir instituted is not capable of succeeding 2 b. Non-fulfllment_of the suspensive condition attached to the institution of heir. Suspensive condition is a condition depending upon the happening of an uncertain event which must be fulfilled before an obligation arises. eee ion (omission in the testator’s will of one, some or all of oui a pn heirs in the direct line which has the effect of ae annulling the institution of heir). d. Fulfillment of “resolutory conditi _ secretion inditi already enforceable obligat e. n of term or period of institution. heir. Scanned with CamScannerwk oo - Succession al Transfer Vanes Elements of Succession: 1. Decedent is the general term applied to the person whose property is ‘transmitted through succession, whether or not he left a will. If he left will, he is called a testator (Art. 775 CC). Executor is a person designated in the last will and testament to ions of the decedent's will. He also performs a fiduciary duty such as taking care of the decedent's estate prior to final disposition to the heirs. Administrator is senamenoonaieleneah’ court and performs the same duty, in lieu of an « refused to accept the appointment, fail led to qualify under en ma the last will and testament did not appoint one. Nn Inheritance (Estate) - include all the property, rights and obligations of a person which are not extinguished by death and all which have accrued thereto since the opening of succession. Rights which are purely personal are not transmissible for they are extinguished by death (Art. 776 CC). 3. Successor An heir or successor is a person who is called to the succession either the provision of a will or by operation of law (Art. 782 CC). Devisees and legatees are persons to whom gifts of real and personal property are respectively given by virtue of a will. Successors or heirs are classified under the law as follows: . COMPULSORY HEIRS - those who succeed by force of law to some portion of the inheritance, in ranamountpradatemmiosdsbosdew, known, as the legitime: They succeed whether the testator likes” They cannot be deprived by the testator of their legitime except by disinheritance properly effected. : Kinds of compulsory heirs: : + Primary those who have precedence over and exclude other compulsory heirs (i.e, legitimate children and descendants). = Secondary. those who succeed only in the absence of the primary compulsory heirs; (ie, legitimate parents and ascendants). «= Concurring — those who succeed together with the primary or secondary compulsory heirs (i.e., illegitimate children and descendants and surviving spouse). Scanned with CamScannerSaccession and. Transfer Ties ose Peenaens Primary Compulsory ‘Secondary Compulsory Legitimate children and their |. Legitimate parents and legitimate legitimate descendants ascendants. (They inhent only in defeut of A) ‘Surviving spouse . Illegitimate parents (no other Wegitimate children and their descendants). They inherit only in descendants, legitimate or default of A” & “C”. illegitimate NOTE: Brothers and sisters are neither compulsory heirs nor strangers. However, they may be voluntary heirs. b. VOLUNTARY HEIRS - those instituted by the testator in his will to sa 8 Succeed to the inheritance of the portion thereof of which the testator can freely dispose. Free portion refers to the portion or value left in the estate after deducting the legitime of the compulsory heirs. The share of a voluntary heir is determined through the last will and testament. LEGAL OR INTESTATE HEIRS - those who succeed to the estate of the decedent by operation of law (decedent died without a valid will or his estate was not entirely disposed of by will) COMPOSITION OF GROSS ESTATE The gross estate is divided into two main categories for succession purposes, the legitime and free portion as shown below: peony ao bach) sory Heirs: This portion of the estate is reserved by law _specifcaly to compulsory heirs, regardless of whether a last will and testament was prepared (Refer to Table 4-3 Table of Legties) ‘Compulsory Heirs andior Voluntary Heirs. ‘As provided in the last wil and testament. Inthe absence of a wil this portion ofthe estate shall be distrbuled to “intestate heirs’ based in the order of prionty as provided in Table 1-2. Scanned with CamScannerSuccession and, Transfe o SX LEGITIME ‘is part of a testator’s property which he cannot dispose of because the law has reserved it for certain heirs who are, therefore, called heirs (Art. 886 CC). The compulsory heirs cannot be deprived of their legitime by the testator except by disinheritance properly effected. On the other hand, «Free Portion is that portion of the estate which the testator can freely dispose of Hence, anyone may inherit from free portion (compulsory or voluntary heirs). Nonetheless, voluntary heirs may inherit only if mentioned in the will. In the absence “of a provision in the will, voluntary heirs will not inherit anything. In such cases, the free portion shall be disposed of to intestate heirs based in the order of prionty as presented below: Gene menses Legitimate children or descendants Legitimate parents or ascendants legitimate children or descendants ‘Surviving spouse Brothers and sisters, nephews and nieces Other collateral relatives within the 5 degree State or the government The distribution of free portion in intestate succession is based on the order of priority because in every inheritance, the relative nearest in degree excludes the more distant ones, saving the right of representation when it properly takes place. Collateral Relatives Consanguinity. is the relation of persons descending from the same ‘stock or common ancestors. These persons are known as blood relatives, and are said to be related by blood or consanguinity. It may be lineal or collateral. Lineal consanguinity, which may be descending or ascending, is that which subsists between perso 1om one is descended in a direct line from the other. Collateral consanguinity is that which subsists between persons who have the same ancestors, but who not descend (or ascend) one from the other. Proximity of relationship is determined by the number of generations. Each generation forms a degree. As illustrated below Scanned with CamScannerSuceesstin. ard. vasfer Ties ReNe NOTE: In the illustration, C and D are siblings. Their common parents are A and B. Gis the daughter of C ond E; J is the son of D and F. ‘Mis the son of G and K; Nis the daughter of J and L 4,C, G and M, in thot order, are relatives in the descending direct line. From A to C is one degree; from C to G is another degree and from G to M is nother degree. N, J, D aiid B, in that order, are relatives in the ascending C, G and M, are relatives of D, J and N in the collateral line. G is the niece of D, Dis the uncle of G; J is the nephew of C, Cis the aunt of J. H and | are first cousins; they are four degrees apart, H to C, C to AB, AB fod ‘ond D to |. Mand N are second cousins; they are six degrees apart. irect line. ). Because of G's marriage to K, K becomes H's brother-in-law, H being G's brother. They become relatives by affinity. Affinity is the connection existing in consequence ‘of @ morriage between each of the married spouse ond the kindred of the other. 11 Scanned with CamScannerSuccession and, Tensfe xv Cia inde by the number of LC, whether they survive alone or with ‘concurring compulsory heir (CH) ea ss Equal to 1 LC ic % ‘All the concurring CH get from the half free portion, the share of the SS ss % having preference over that of the IC, whose share may suffer ic ‘hot LC _| reduction pro-rata because there is no preference among themselves LPA 4 ‘Whether they survive alone or with concurring CH LPA t % IC succeed in the Zain equal shares ic % LPA % ss % LPA % ss 18 1c 4114 ic M2. ‘Divide equally among the IC ss 13 ic 13 ss 2 173 if mamiage is in articulo mortis and deceased spouse dies within 3 months after the marriage IP Me iP ‘Excluded | Children inhert in the amounts established in the foregoing rules Any child ttdepends: 1 % Orly the parents of IC are induded Grandparents and other SS. Xe ascendants are excluded. { ILLUSTRATION 7 (LEGITIMEs and FREE PORTION of the ESTATE): Case A: Namaalam Nha died leaving an estate valued at P12,000,000. The surviving heirs were his spouse, 2 legitimate children and 1 illegitimate child | Required: Distribute the estate by applying the rules on legitime. | The distribution of hs estate should be as follows (Based on Table 1-3): - | Legitimate Chitdren (1/2): 6,000,000 = Legitimate chid# 1 P3,000,000 * Legitimate child # 2 3,000,000 | Megitimate child (1/2 of 1 LC) 4,500,000 |. Surviving Spouse (1/4) 3,000,000 | Free Porton (remainder) - 41,500,000 2 | Total Z —P12,000,000_ | — | | i Scanned with CamScannerSuccession aad. Transfer Tages NOTE: = | fs The legitime of the legitimate children as provided in the table of legitime is % of the total estate (regardless of the number of legitimate chikiren). | =. The logitime of anilegitimate child is of the legitime of 1 legitimate child. \" The legitime of the surviving spouse is ‘4 as provided in the table of legitime | © The remaining portion in this particular case is the free portion. It may be given by the | testator to anyone in accordance with his wishes. However, only those voluntary heirs | | __ included in the provisions of the will should be recognized. | Case B: Assume the amount of estate is P12,000,000 and the decedent is survived only by his two (2) illegitimate children. The distribution of the estate under intestate | succession should be: | Mlegitimate Child (1/2); (P3M per LC.) 6,000,000 | Free Portion (1/2) 6,000,000 - | Total . . P 12,000,000 a | = Case C: Assume the same data in Case B except that the testator provided P8,000,000 to Ana (his secretary) through his last will and testament. Obviously, the legitimes of the | two (2) illegitimate children were impaired. The amount of estate left after deducting the | 8,000,000 will not be enough to satisfy the legitimes of the compulsory heirs amounting | to P6,000,000. Hence, the amount to be given to the secretary should be modified or | reduced to P6,000,000 to satisfy the legitimes. The distribution of the decedent's estate | should be as follows: gemeutsosy, ne | Illegitimate Child (1/2); (P3M per LC) 76,000,000, | Secretary (ree Porton) (12) 6,000,000 L___Total _ 12,000,000 ~ 2 Wills A.willsis an act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of his estate to take effect after his death (Art. 783 CC). It is a\document) 5 whereby a person, called the “testator”, disposes of his or her properties or “estate” to take effect upon his or her death. The making of a will is a strictly personal act. It cannot be left in whole or in part of the discretion of a third person, or accomplished through the instrumentality of an agent or attorney. All persons who are not expressly prohibited by law may make a will. The persons prohibited by law to make a will are those below 18 years old and those who are not of sound mind at the time of its execution. Leia : 1B Scanned with CamScannerSuccession ad Transfer q “ages The law presumes that every person is of sound mind, in the absence of proof to the contrary. The burden of proof that the testator was not of sound mind at the time of making his dispositions is on the person who opposes the probate of the will. If the testator, one month, or less, before making his will was publicly known to be insane, the person who maintains the validity of the will must prove that the testator made it during a lucid interval. Supervening incapacity does not invalidate an effective will, nor is the will of an incapable validated by the supervening of capacity. A married woman may make a will without the consent of her husband, and without the authority of the court. A married woman may dispose by will of all her separate property as well as her share of the conjugal partnership or absolute community property. Kinds of Will 1, .NOTARIAL OR ORDINARY OR ATTESTED WILL — is one which is executed in accordance with the formalities prescribed by Art. 804 to 808 of the New Civil Code. ‘Requisites for a Valid Notarial Will a) It must be in writing and executed in a language or dialect known to the testator. b) It must be subscribed at the end thereof by the testator himself or by the testators name written by some other person in his presence and by his express direction. ©)" It must be attested and subscribed by three or more credible witnesses in the presence of the testator and of one another. The following are disqualified from being witnesses to-a will (Art. 821 CC): = Any person not domiciled in the Philippines. + Those who have been convicted of falsification of a document, perjury, or false testimony. ii In the absence of bad faith, forgery, ® or fraud, or undue and improper 5 en “The validity of a will as to its form depends upon the observance of the law in force atthe time its made." pressure and influence, defects and imperfections in the form of attestation or in the language used therein shall not render the will invalid if it is proved that the will was in fact executed and attested in substantial compliance with all the requirements of the law. 14 Scanned with CamScannerSuc essiow and. Transfer Téves 2. -HOLOGRAPHIC WILL=is a written will which must be entirely written, dated and signed by the hand of the testator himself. It subject to no other form and it may be made in or out of the Philippines and need not be witnessed (Art. 811 CC). In case of any insertion, cancellation, erasure or alteration in a holographic will, the testator must ‘authenticate the same by his full signature. Codicil.is a supplement or addition to a will, made after the execution of a will and annexed to be taken as a part thereof, by which any disposition made in the original will is explained, added to or altered. In order that a codicil may be effective, it shall be executed as in the case of a will (Arts.825 and 826 CC). PROBATE OF A WILL is a court procedure Art 815CC_ by which a will is proved to be valid.or *No propery of @ invalid. In the probate of a holographic will, testator shall pass _it shalll be necessary that at least one witness to an heir unless who knows the handwriting and signature of proven that all the the testator explicitly declare that the will and terms in the last will the signature are in the handwriting of the and testament is testator. legal_end valid in The proceedings in the absence of a last court’. will and testament is called ‘intestate proceedings’. e ° Foreign Wills The will of an alien who is abroad produces effect in the Philippines if made with the formalities prescribed by the law of the place in-which he. resides, or according to the formaliies. observed. in. fis country, or in conformity with those which the Philippine civil code prescribes. A will made in the Philippines by a citizen or subject of another country, which is executed in accordance with the law of the country of which he is a citizen or subject, and which might be proved and allowed by the law of his own country, shall have. the same effect as if executed according to the laws of the Philippines.” When a Filipino is in a foreign country, he is authorized to make a will in any of the forms established by the law of the country in which he may be. Such will may be probated in the Philippines (Art. 815 CC). Scanned with CamScannerSuccession aad. C iansfer Lawes Revocation of wills and testamentary dispositions _Awill may be revoked by the testator at any time before his death any waiver or restriction of this right is void (Art. 828 CC). A revocation done outside the Philippines, by a person who does not have his domicile in the Philippines, is valid when it is done according to the law of the place where the will was made, or according to the law of the place in which the testator had his domicile at the time and if the revocation takes place the Philippines when it is in accordance with the provisions of the new civil code. MODES OF REVOKING A WILL?” 1) By implication of law 2) By some will, codicil, or other writing executed as provided in case of wills 4 3) By burning, tearing, cancelling, or obliterating the will with the intention of revoking it, by the testator himself, or by some other person in his Presence, and by his express direction. If burned, torn, cancelled, or obliterated by some other person, without the express direction of the testator, the will may still be established, and the estate distributed in accordance therewith, if its contents, and due execution, and the fact of its unauthorized destruction, cancellation, or obliteration are established according to the Rules of Court. Subsequent wills which do not revoke cart 83700: the previous ones in an express manner, annul “if after making a wil, the only such dispositions in the prior wills as are testator makes a second inconsistent with or contrary to those wil expressly revoking the contained in the latter wills. A revocation made frst, the revocation of the in a subsequent will shall take effect, even if the ‘second will does not revve pew will should become inoperative by reason psa Need de ‘of the incapacity of the heirs, devisees or pak, legatees designated therein, or by their renunciation. A revocation of a will based on a false cause or an illegal cause is null and void. Institution of heir (Art. 840 CC) ‘stitution ofan” heir"is an act by virtue of which a testator designates in his will the person or persons who are to succeed him in his Property and transmissible rights and obligations. A will shall be valid even though it should not contain an institution of an heir, or such institution should not comprise the entire estate, and even though the person so instituted should not accept the inheritance or should be incapacitated to succeed. In such cases the testamentary dispositions made in accordance with law shall be complied with and the remainder of the estate shall pass to the legal heirs. 16 Scanned with CamScannerSuc iow and. Transfer Tes A compulsory heir may, in consequence of disinheritance, be deprived of his legitime, for causes expressly stated by law. Disinheritance can be effected only through a will wherein the legal cause therefore shall be specified. The burden of proving the truth of the cause for disinheritance shall rest upon the other heirs of the testator, if the disinherited heir should deny it. Disinheritance Disinheritance is a testamentary disposition by which a compulsory heir is deprived of, or excluded from the inheritance to which he has a right. Disinheritance is not applicable to voluntary heirs. REQUISITES for Disinheritance: Effected only through a valid will For a cause expressly stated by law Cause must be stated in the will itself Cause must be certain and true Unconditional Total (there is no partial disinheritance) The heir disinherited must be designated in such a manner that there can be no doubt as to his identity 5 NOMSENA As stated above, the ground{(s) or cause(s) of disinheritance shall be limited to those expressly stated by law. Under Art. 850 of the Civil Code, the burden of proving the truth of the cause for disinheritance shall rest upon the other heirs of the testator, if the disinherited heir should deny it. Disinheritance without a specification of the cause, or for a cause ‘the truth of which, if contradicted, is not proved, or which is not one of those set forth in civil code, shall annul the institution of heirs insofar as it may prejudice the person disinherited. The devises and legacies and other = testamentary dispositions shail be valid to such S®ES8°° extent as will not impair the legitime. The “A subsequent children and descendants of the person jeconciliation between the disinherited shall take his or her place and shall offender and the offended preserve the rights of compulsory heirs with person deprives the latter of the respect to the legitime; but the disinherited fight to disinherit, and'renders” parent shall not have the usufruct or ineffectual any disinheritance administration of the property which constitutes that may have been made.” the legitime. 7 Scanned with CamScannerSuccession and. Transfer Ties COMMON CAUSES FOR DISINHERITANCE of children or descendants, parents or ascendants, and spouse: 1. When the heir has been found guilty of an attempt against the life of the testator, his/her descendants or ascendants, and spouse in case of children and parents; 2. When the heir has accused the testator of a crime for which the law prescribes imprisonment for 6 years or more, if the accusation has been found groundless; 3. When the heir by fraud, violence, intimidation or undue influence causes the testator to make a will or to change one already made; 4. Refusal without justifiable cause to support the testator who disinherits such heir. Peculiar Causes for Disinheritance .. ‘4. CHILDREN/DESCENDANTS: a. When the child or descendant has been convicted of adultery or -concubinage with the spouse of the testator; b. Maltreatment of the testator by word or deed by the child/descendant; ©. When the child or descendant leads a dishonorable or disgraceful ‘life; d. When the child or descendant is convicted of a crime which carries with it a penalty of civil interdiction. °2...PARENTS/ASCENDANTS:” a. When the parents have abandoned their children or induced their daughters to live a corrupt or immoral life, or attempted against their virtue; b. When the parent or ascendant has been convicted of adultery or concubinage with the spouse of the testator; c. Loss of parental authority for causes specified in the Civil Code; and d. Attempt by one of the parents against the life of the other, unless ‘there has been reconciliation between them. "8." SPOUSE: a. When the spouse has given cause for legal separation; b. When the spouse has given grounds for loss of parental authority. Scanned with CamScannerSecession and. Transfer Tages Right of Representation a It a “right” created by fiction of law where the representative is raised to the place and degree of the person represented, and acquires the rights which the latter would have if he were living or could have inherited. Representation may arise either because of: 1, Death 2. Incapacity 3. Disinheritance The representative(s) shall not inherit more than what the person they represent would inherit, if he were living or could inherit (Art. 974). The Jaw further provides that “representation” is not availableto: 4. As to compulsory heirs: In case of repudiation, the one who repudiates his inheritance cannot be represented. Their own heirs inherit in their own right. 2. As to voluntary heirs Voluntary heirs, legatees and devisees who a. Predecease the testator; or b. Renounce the inheritance cannot be represented by their ‘own heirs, with respect to their supposed inheritance. Right of representation takes place only in favor of children of brothers or sisters, whether full or half blood and only if they concur with at least one uncle or aunt. This rule applies only when the decedent does not have descendants. Nephews and nieces already alive when the aunt or uncle died can inherit by representing their predeceased parents. If the nephews and nieces are illegitimate, then they are prohibited by Article 992 of the new civil code from inheriting from the relatives of their father or mother like their uncles or aunts, or even from their grandparents. | Grandnephews and grandnieces in the collateral line cannot inherit by right of representation. im Scanned with CamScanner