LAWS ON INHERITANCE

ESTATE PLANNING
AND
DONATION
SUCCESSION and INHERITANCE

F M (+) 2020

A
SUCCESSION and INHERITANCE

F M (+) 2020

D E

A
 WILL

A WILL IS THE TESTATOR SPEAKING

AFTER DEATH (Santos vs. Manarang
27 Phil 206). Human wished to speak
after death, and the law permits that
person by virtue of a WILL.

Hence, a WILL deserves deep respect

and observance.
 WILL
A WILL states the ff:
g) All my lands I bequeath to my wife
Cecilia and to my children in equal
shares. However, my H & L in Manila
shall not be partitioned for 30 years
from my death and shall be
administered by my children and only
the proceeds to be partitioned to my
heirs.
 WILL

The SC said: The provision in the Will

shall be transferred in the names of the
heirs for purposes of administration
only, is NOT VALID. It is contrary to
public policy.

The prohibition to partition a property

last only for 20 years.
 Article 793 of the Civil Code
In 2016,T made a will stating “ I give all my cars
to X.

In 2016, T had only 5 cars. However, at the time

of his death in 2018, T had already 10 cars. How
many cars would X be entitled to
5 or 10?
 Article 793 of the Civil Code
Compare with:

In 2016,T made a will stating “ I hereby give to X

my cars and ALL other cars I have acquire in the
future before my death.

Many cars X would be entitled to?

 REQUISITES TO MAKE A WILL

• Must be at least 18 yrs. of age.

• Must be of sound mind.

 KINDS OF WILLS
• Notarial

• Holographic
 Formalities for Notarial Wills

• Must be in writing

• The will must be written in a language or

dialect known to the testator

• The will must be subscribed at the end thereof

by the testator himself.
 WILL

A WILL which Attestation clause does

not contain the number of pages upon
which will is written is fatally defective.

A WILL which Attestation clause is not

signed by the instrumental witnesses is
also fatally defective.
 WILL

A WILL which contains a mere jurat

and not an acknowledgment is likewise,
fatally defective.

Anyone of these defects is sufficient to

deny probate.
 Formalities in Holographic Wills
• The will must be entirely written by the hand
of the testator himself.

• The will must be dated by the hand of the

testator himself

• The will must be signed by the testator

himself
 CASE

• Suppose that after the death of the

testator, the only copy of his
holographic will which can be found
is a xerox copy or a carbon copy, will
the will be admitted to probate?
 ANSWER

Yes. The Supreme Court ruled that

the will may be allowed because
comparison can still be made with the
standard writing of the testator.
 CASE
Before his death A borrowed from X P1 M.
evidenced by a PN. A died w/out paying the
debt. He left no property, but is survived by his
son, who is making good in the buy and sell
business. Can X file a case against A?
 ANSWER

• No. Monetary obligations are not

transmissible . Monetary obligations
do not constitute part of the
inheritance.
 LEGITIME
Legitime is that 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.
 WHO ARE THE COMPULSORY HEIRS?

• Legitimate children and descendants.

• In default of the foregoing, legitimate
parents and ascendants.
• The widow or widower
• Illegitimate children
 LEGITIME OF SURVIVING SPOUSE
• ½ of the estate
• Exception – 1/3 of estate, if the marriage was
solemnized in articulo mortis and the testator
died w/in 3 mo. from the time of marriage.
• Exception to the exception: ½ of estate if
marriage solemnized in articulo mortis and
the testator died w/in 3 mo. from such
marriage, but they have been living as
husband and wife for more than 5 years.
 REPRESENTATION
• Representation is a right created by fiction of
law, by virtue of which the representative is
raised to the place and the degree of the
person represented and acquires the rights
which the latter would have if he were living
or if he could have inherited.
 Sharing under the Civil Code
Grandfather died in 2016

Father died ahead in 2014

Legitimate child will represent in 2014 his father

as the heir to the estate of the Grandfather but
not illegitimate grandchild. Iron Curtain Barrier
 IRON CURTAIN BARRIER
An illegitimate child has no right to
inherit from the legitimate children or
relatives of his father or mother; nor shall
such children or relatives inherit in the
same manner from the illegitimate child.
This is known as the IRON CURTAIN
BARRIER. [Article 992, Civil Code].
 NO REPRESENTATION
DIAZ vs. Court of Appeals,
Decided by the Supreme Court Two Times
1. G.R. No. 66574, June 17, 1987 (Division)

2. G.R. No. 66574, February 21, 1990 (En Banc)

 NO REPRESENTATION
Simona Pamuti Vda De Santero (+ 1976 intestate)
Married to Pascual Santero (+1970) Sister

Felisa Pamuti-Jardin
Pablo Santero (+ 1973)

6 Illegitimate children
 NOW ILLEGITIMATE CHILD HAS
THE RIGHT TO REPRESENT

Case of Aquino vs. Aquino, December 10, 2021

 INTESTATE SUCCESSION

If a person dies without a will, or with a

void will or one which has subsequently
lost its validity.

Extra-Judicial Settlement of Estate

 How is the estate divided in other
instances?
If a widow or widower survives with illegitimate
children, such widow or widower shall be entitled to
one-half of the inheritance, and the illegitimate
children or their descendants, whether legitimate or
illegitimate, to the other half [Article 998, Civil Code].
Should the decedent be survived by his parents,
spouse and illegitimate children, the parents shall get
one-half (1/2), the surviving spouse one-fourth (1/4)
and the illegitimate children one-fourth (1/4) of the
estate.
 How is the estate divided in other
instances?
If the decedent is survived by his parents
and illegitimate children, the parents get one-
half (1/2) while the other half of the estate goes
to the illegitimate children [Article 991, Civil
Code].
 Example 1
JUANA died, leaving behind the following:
Father
Spouse
Child
Only the Spouse and the Child will inherit. A
legitimate child excludes the legitimate parents.
 Example 2
JUANA died without any children, leaving
behind the following:
Father
Spouse
Brothers and Sisters
Only the Father and the Spouse will
inherit. Brothers and Sisters are excluded
because of the presence of the legitimate
parents.
 Example 2
JUANA died without any children, leaving
behind the following:
Spouse
Brothers and Sisters
The Spouse and the Brothers and Sisters
will inherit.
 SIBLINGS
At the outset, it must be made clear that siblings
are NOT compulsory heirs. This means that they are in
the bottom tier when it comes to inheritance. They can
be excluded by certain compulsory heirs. Thus, any of
the following heirs will prevent siblings from becoming
heirs to the estate of their brother or sister:
•1. Children of the decedent (whether legitimate or
illegitimate)
•2. Parents of the decedent (whether legitimate or
illegitimate)
 SIBLINGS
Instances when the brothers and sisters can inherit
from their sibling, in the absence of a will:
1.  If the decedent is survived by his spouse and
siblings, then the surviving spouse gets half of the
estate while the remaining half will be given to the
decedent’s siblings [see Article 1001, Civil Code].

2.  If the decedent is survived by his siblings, then the

siblings will get the entire estate with the siblings
inheriting in equal shares [see Article 1004, Civil Code].
 Treyes vs. Larlar et al
September 8, 2020 En Banc
On May 1, 2008,
Rosie Larlar Treyes (Rosie), the wife of Dr.
Nixon Treyes, passed away. Rosie, who did not
bear any children with Treyes, died without any
will. Rosie also left behind seven siblings, 
Antonio, Emilio, Heddy, Rene, Celeste, Judy, and
Yvonne.

At the time of her death, Rosie left behind 14

real estate properties, situated in various
 Treyes vs. Larlar et al
September 8, 2020 En Banc
locations in the Philippines, which she owned
together with Dr. Treyes as their conjugal
properties.
Subsequently, Dr. Treyes executed two
Affidavits of Self- Adjudication. The first Affidavit
of Self-Adjudication was registered by Dr.
Treyes with the RD of Marikina City on March 24,
2011, while the second Affidavit of Self-
Adjudication was registered with the RD of San
Carlos City, Negros Occidental on June 5, 2011.
 Treyes vs. Larlar et al
September 8, 2020 En Banc
In these two Affidavits of SelfAdjudication,
Dr. Treyes transferred the estate of Rosie unto
himself, claiming that he was the sole heir of his
deceased spouse, Rosie.
SC said that it is clear here that prescription has
not set in as the siblings still have until 2021 to
file an action for reconveyance, given that the
certificates of title were issued in the name of
Dr. Treyes only in 2011.
 Treyes vs. Larlar et al
September 8, 2020 En Banc
On May 1, 2008,
Rosie Larlar Treyes (Rosie), the wife of Dr.
Nixon Treyes, passed away. Rosie, who did not
bear any children with Treyes, died without any
will. Rosie also left behind seven siblings, 
Antonio, Emilio, Heddy, Rene, Celeste, Judy, and
Yvonne.

At the time of her death, Rosie left behind 14

real estate properties, situated in various
 Treyes vs. Larlar et al
September 8, 2020 En Banc
Treyes argued that the Complaint is already
barred by prescription is Rule 74, Section 4 of the
Rules, which states that an heir or other persons
unduly deprived of lawful participation in the
estate may compel the settlement of the estate
in the courts at any time within two years after
the settlement and distribution of an estate.
 Treyes vs. Larlar et al
September 8, 2020 En Banc
 The provisions of Rule 74, Section 4 barring
distributees or heirs from objecting to an
extrajudicial partition after the expiration of two
years from such extrajudicial partition is
applicable only: (1) to persons who have
participated or taken part or had notice of the
extrajudicial partition, and (2) when the
provisions of Section 1 of Rule 74 have been
strictly complied with, i.e., that all the persons or
heirs of the decedent have taken part in the
 Treyes vs. Larlar et al
September 8, 2020 En Banc
extrajudicial settlement or are represented by
themselves or through guardians.

Both requirements are absent here as it is

evident that not all the legal heirs of Rosie
participated in the extrajudicial settlement of
her estate as indeed, it was only Dr. Treyes who
executed the Affidavits of Self-Adjudication.
 SIBLINGS

Should brother and sisters of the full blood

survive together with brothers and sisters of the
half blood, the former shall be entitled to a
share double that of the latter [Article 1006,
Civil Code].
 SIBLINGS
Should brothers and sisters survive together with
nephews and nieces, who are the children of the decedent’s
brothers and sisters of the full blood, the former shall inherit
per capita, and the latter per stirpes [Article 1005, Civil Code].
This means that if the heir-sibling is already dead, his children
(the decedent’s niece or nephew) shall inherit from the
decedent by right of representation [see Article 975, Civil
Code]. Hence, the nephew and nieces will inherit per stirpes.
The representatives will receive only what the person
represented would have received [Ruben F. Balane, Jottings
and Jurisprudence in Civil Law (Succession) (2016 ed) p. 489]
 Question
• Can an heir who repudiates his inheritance be
represented

• No, he cannot. According to the law, an heir

who has repudiated his inheritance may not
be represented. (Art. 977, Civil Code)
 DISINHERITANCE
• When a child by fraud, violence, intimidation,
or undue influence causes the testator to
make a will or to change one already made.
• A refusal w/out justifiable cause to support
the parent or ascendant who disinherits such
child or descendant.
• When a child leads a dishonorable or
disgraceful life.
 LEGAL CAUSE FOR DISINHERITANCE

• When a child has been found guilty of an

attempt against the life of the testator, his or
her spouse, descendants or ascendants.
• When a child has accused the testator of a
crime for which the law prescribes
imprisonment for six years or more
• When a child has been convicted of adultery or
concubinage with the spouse of the testator.
 ESTATE PLANNING

Establishing a corporation. Transfer of

property to a corporation by a person, alone or
together with others, not exceeding 4 persons in
exchange for stock, unit of participation etc. The
registered owner/s where the property is the
one being contributed to the new real property.
Registered owner must be the biggest
stockholders of the corporation.
 ESTATE PLANNING
Sell to your children your property.
 ESTATE PLANNING

Opening a Trust Account with a Bank as

Trustee
 Exchange of Residential Dwelling
Section 40 (c) (2) - No gain or loss shall also be
recognized if property is transferred to a corporation by a
person in exchange for stock or unit of participation in
such a corporation of which as a result of such exchange
said person, alone or together with others, not exceeding
four (4) persons, gains control of said corporation.

for exemption of exchange of real property for shares of

stocks is no longer required.
 Estate Tax as amended by TRAIN Law
effective January 1, 2018
▪ Transfer of property from decedent to heirs.
▪ Valuation of Gross Estate ➢ Time of death ➢
For real property whichever is higher between
market value per tax declaration and zonal
value.
➢ Shares of stocks depending on classification. ▪
Tax Rate – 6% ▪
 Estate Tax as amended by TRAIN Law
effective January 1, 2018
1. Standard deduction – P5,000,000
2. Claim against the estate
3. Claim of deceased against insolvent person
4. Unpaid mortgages, taxes, casualty losses
5. Property previously taxed
6. Transfer for public use
7. Family Home – P10,000,000
8. Share of Surviving Spouse
 DONATION
Donation is an act of liberality whereby a
person disposes gratuitously of a thing or right
in favor of another, who accepts it.
 Kinds of Donations

• Donations inter vivos, or those which take

effect independently of the donor’s death.

• Donations mortis causa, or those which are

effective upon the donor’s death and must
therefore be governed by the rules of
testamentary succession.
 CASE
The Deed of Donation was entitled “Donation
Inter Vivos”. There is however, a provision in the deed
to the effect that, although the land donated shall be
delivered immediately to X, but “title thereto shall pass
to the donee only upon the donor’s death. Upon the
death of the donor, his widow and son brought an
action for the recovery of the property on the ground
that the donation is a donation mortis causa and not
intervivos. Will the case prosper?
 ANSWER

Yes the case will prosper. It is clear that in

the problem, the donation is mortis causa. It
involves disposition post mortem. Therefore, in
order that the donation can take effect it is
essential that it must be made in a will executed
in accordance with all the formalities prescribed
by law. Since this requisite has not been
complied with, the donation is void or
inexistent.
 What Donations are Prohibited
Donation during the marriage void; reason.
There may be undue influence that may be
exerted by one against the other, to the extent
that the heirs or creditors of the donor may be
prejudiced if the spouses are allowed to sell to
one another.

•The prohibition should likewise apply to persons

living together as husband and wife without the
benefit of nuptials.
 What Donations are Prohibited
• Those made by persons guilty of adultery or
concubinage at the time of the donation.
• Those made to a public officer or his or her
spouse, descendants or ascendants
• To priest who heard the confession of the
donor during the latter’s last illness.
• Those made to relatives of such priest or
minister w/in 4th degree.
 Prohibited Donations
• Those made by a ward to the guardian , unless
the guardian is an ascendant, descendant,
brother or sister.
• Those made to the physician, surgeon, nurse,
health officer who took care of the donor
during his last illness.
• Those made by the spouses to each other
during the marriage.
 Donor’s Tax-Tax Rate
Tax Rate – 6% effective January 1, 2018 on
total gifts in excess of P250,000.
▪ Valuation ➢ Reckon when the donation is
made.

➢ For real property whichever is higher between

Fair Market Value per Tax Declaration and Zonal
Value.
THANK YOU