What You Need to Know About Extrajudicial Settlement

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I know that most of you might not be familiar with the term, extrajudicial settlement. So am I, but I had to research and ask experienced brokers and a lawyer about it because a friend of mine asked for my services to sell their property in Bicutan area (My very first client) but the problem is, the title is still named under his deceased father and they were told that it is necessary to execute an extrajudicial settlement before they can sell the property.

What is extrajudicial settlement?

When someone dies intestate, meaning without a last will and testament and with no debts, it is important for the heirs to divide and execute the transfer of the estates of the deceased among themselves. This should be done by means of a public instrument which is the extrajudicial settlement affidavit filed in the office of the Registry of Deeds. But this can only apply if all the heirs agree to the settlement because otherwise, they would have to settle it in the ordinary action of partition done in courts.

Why is this important?

My lawyer friend told me that it has been a common practice for Filipino families to disregard the need to transfer the estates of their deceased family member among themselves. It’s like sweeping the dirt under a rug and hope that it will be gone after some time. Little did they know that the law requires this transfer and it will be more complicated if they postpone it up to a time when an immediate heir of the decedent also dies. The law also stated a certain period to which the transfer is allowed after the decedent’s death thus it would be more expensive if you let many years pass by because of the penalties and surcharges in taxes.

How to avoid the hassle of executing an extrajudicial settlement?

Like any other problems, the hassle of executing an extrajudicial settlement can be avoided if we are pro-active. How? Well, you need to have the courage to lead your family to talk about the importance of having a last will and testament. I hear you say, “Nah, that is for the rich and famous families only!” Believe me it’s not. But I understand why you said that, it is because television taught us that mindset. We watch movies or soap operas with rich families fighting each other trying to win the biggest share in the estate of their rich father or grandfather. Executing a will prevents conflict and controversy regarding the remaining estate of a deceased person and fully addresses certain issues with regard to disposition and handling of the same even if the estate is just a 90 square meter property.

There are two types of will; the first is the “attested will” which basically means that the will is done before a notary public and with witnesses and a copy of the said will is submitted to the office of the Clerk of Court. The other type is the “holographic will” which must be entirely written, dated, and signed by the hand of the testator (the one making the will) himself. It is subject to no other form, and may be made in or out of the Philippines, and need not be witnessed.

Sources:

www.batasnatin.com

www.abogadomo.com