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Specpro Bar Reviewer - Part I. Settlement of Estate - Coggle Diagram
Specpro Bar Reviewer
- Part I. Settlement of Estate
A. Settlement of Estate of Deceased Persons
1. Venue and Process (Rule 73)
2. Summary Settlement of Estates (Rule 74)
- Intended for expediency
Rule 76 (Sec. 1 - 13) Allowance/Disallowance of A Will
Who May ask for Probate (Sec. 1)
-
Any Any executor, devisee, or legatee named in a will
Any other person interested in the estate, after the death of the testator, regardless if the will is in their possession or not, or is lost or destroyed.
testator himself may, during his lifetime
Interest in the Estate
- One who would benefit from the estate, such as an heir or a creditor. Rephrased, there must be interest in any of the following:
Estate
Will
Property to be affected by it.
Acquisition of Jurisdiction (76.2)
- Acquired by the filing of a petition, alleging the following jurisdictional facts:
Testator’s death
Testator’s residence at the time of death
The place where the testator left estate, if the testator is a non-resident
That the will has been delivered to the court and is in possession thereof, unless the will has not yet been delivered
The value of the estate to determine the jurisdiction of the court
OR the attachment of a copy of the will to the petition.
Names of Heirs and Address
- Required to be stated in the petition for probate because it allows the court to determine the persons who are entitled to probate as well as the manner notice shall be given.
Notice by Publication Requirement (76.3) -
Upon delivery of the will to a court having jurisdiction or, petition for the allowance of a will is filed,
the court shall fix a time and place for the proving of the will.
GR
- It shall cause notice of time and place to be PUBLISHED (3) weeks successively, in a newspaper of general circulation in the province.
XCPN
- No newspaper publication shall be made where the petition for probate has been filed by the testator himself.
Personal Service;Notice (76.4) -
The court shall also cause copies of the notice of the time and place fixed for proving the will to be addressed to the designated or other known heirs, legatees, and devisees of the testator resident in the Philippines at their places of residence, and deposited in the post office with the postage thereon prepaid at least twenty (20) days before the hearing, if such places of residence be known.
A copy of the notice must in like manner be mailed to the person named as executor, if he be not the petitioner; also, to any person named as coexecutor not petitioning, if their places of residence be known. Personal service of copies of the notice at lest (10) days before the day of hearing shall be equivalent to mailing.
If the testator asks for the allowance of his own will, notice shall be sent only to his compulsory heirs.
Proceedings Proper (76.5) -
During the hearing, compliance with the Notice requirements must be shown prior to introduction of testimony in support of the will.
Evidence that the order of the court fixing the time and place for proving the will has been published for 3 successive weeks prior to the time appointed
Evidence that a notice of such hearing has been served upon the known heirs, legatees, devisees of the resident testator at least 10/20 days prior.
If the petitioner is not the testator, evidence that notice has been served upon the executor, if his place of residence is known
Testimonies of the subscribing witnesses in support of the will
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Mandatory Notice
- Notice to the heirs, legatees and devisees is required. This is not complied with by mere publication of notice of hearing.
Persons who are not compulsory/testate heirs need not be notified by the court in a petition for probate.
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Effect of Non-Publication -
the proceeding for the settlement of estate is void and should be annulled. This is because notice by publication is constructive notice to the whole world, and serves as a pre-requisite to the allowance of the will.
Notice to
This person must establish
Compliance with formalities
Capacity of the testator
4. Claims Against the Estate (Rule 86)
Sec. 1 Notice to creditors to be issued by court
When issued: Immediately after granting letters testamentary or administration
To whom given: All persons having money claims against the estate
Action: Requiring all persons having money claims against the estate to file them in the office of the clerk of court
Purpose of administration
- Liquidation of the estate and distribution of its residue. Liquidation is the determination of all the assets of the estate, and the payment of all debts and expenses
Purpose of Presentation of Claims
- To protect the estate of the deceased.
It enables the executor or administrator to examine each claim and to determine whether it is a proper one which should be allowed.
It apprises the administrator of the existence of the claim so that a proper and timely arrangement may be made for its payment, either in full or by pro rata portion in the due course of the administration.
Form of Claims
- Need not be in any particular form. Sufficient that:
it states the character and amount of the claim,
Enables the representative to provide for its payment
Serves to bar all other claims by reason of its particularity of designation
Type of claims that may be filed
- Only money claims contracted BEFORE the decedent’s death may be brought under this rule.
Claims originating AFTER the decedent’s death may be allowed as expenses of administration, but not as money claims under Rule 86.
Instead, collected from the administrator or executor personally or by motion in the proceedings without the formalities and limitations for money claims as stated in this Rule.
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86.2. Time within which claims shall be filed.
- Claims against the estate may be filed not less than 6 months, but not more than 12 months from the date of the first publication of the notice.
Statute of Non-Claims
- the period fixed by the probate court for the claims against the estate. Claims not filed within this period are barred forever.
Rationale of period
- The rule specifies a range in order to give the probate court the discretion to fix the period for filing of claims.
Once fixed, the period becomes mandatory. This is to ensure the speedy settlement of affairs of the deceased, and the early delivery of the property to the person entitled to the same.
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Effect on Statute of Limitations
- The statute of non-claims supersedes the statute of limitations.
Thus, even if a claim has not yet prescribed under the statute of limitations, if such claim is not made within this period, the creditor may no longer collect because of the statute of non-claims.
Waiver of Statute of Non-Claims
- Though the presentment of probate claims is imperative, it is generally understood that this may be waived by the estate’s representative. This is determined from administrator's act and conduct, such as to plead the statute of non-claims, his active participation, and resistance to the plaintiff’s claim in a civil suit amounts to such waiver.
Exceptions to Statute -
Creditor may apply for a new period not exceeding 1 month from the order allowing the same for just cause
The creditor may set up his claim as a counterclaim in an action filed by the executor or administrator against him under Rule 86.5.
86.3 Publication of notice to creditors
86.4 Filing of copy of printed notice
-
A copy of the printed notice must be filed with the court within ten days after publication and posting.
Additionally, the affidavit of the published notice must also be submitted, setting forth the dates of the first and last publication, as well as the newspaper on which it was printed.
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Duty of Administrator/Executor
- Immediately after the notice to the creditors is issued, the executor or administrator must cause the following:
Publication of the notice three weeks successively in a newspaper of general circulation in the province; and
Posting of the notice for three weeks successively in the following places:
(a) Four public places in the province; and
(b) Two public places in the municipality where the decedent last resided.
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5. Payment of the Debts of the Estate (Rule 88)
Sec. 1 Full payment of Debts
- If:
after hearing all the money claims against the estate,
and after ascertaining the amount of such claims, it
It appears that there are sufficient assets to pay the debts,
the executor or administrator pay the same within the time limited for that purpose.
Propriety of Writ of Execution
- A writ of execution is not the proper procedure under ROC for the payment of debts and expenses of administration. Instead, for the court to order the sale of personal estate or the sale or mortgage of real property of the deceased.
Effect of Civil case against Administratrix
- The probate court may hold in abeyance intestate estate proceedings pending determination of a civil case against the administratrix.
Consequently, The heirs of the estate may not demand the closing of an intestate proceeding at anytime where there is a pending case against the administrator.
Sec. 2 Testamentary Provisions for Payment of Debt
-
GR
- If the testator makes provision by his will, or designates the estate to be appropriated for the payment of his debts, the expenses of administration, or the family expenses, they shall be paid according to the provisions of the will;
XCPN
- If provision of estate appropriated is insufficient, such part of the estate of the testator, real or personal, as is not disposed of by will, if any shall be appropriated for that purpose.
Effect on Filing requirements -
While the testator has acknowledged a specific debt in his will, the creditor is NOT relieved from the duty of filing his claim in the testate/intestate proceeding. Otherwise, the claim will be barred.
Sec. 3 Order of Preference for Payment of Debts -
From the portion or property designated in the will;
From the personal property; and
From the real property.
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Q. Do heirs have right to designated payment of assets?
A - No, generally must follow will. Rule on preference of credits apply.
Subject to instances where exceptions to preference of credit applies.
DC - Subquestion is, what prejudice will happen to the estate if the heirs pick out estate property?
A - There may be no prejudice in these instances, after exhaustion of properties designated by will. Thus heirs may pick out properties?
Here, after hearing all of the money claims, there can now be a payment of all debts.
6. Sales, Mortgages, and Other Encumbrances of Property of Decedent (Rule 89)
Sec. 1 Order of Sale of Personalty
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Upon the application of the executor or administrator, AND
on written notice to the heirs and other persons interested
the court may order the whole or a part of the personal estate to be sold, if it appears necessary for the purpose of paying debts, expenses of administration, or legacies, or for the preservation of the property.
Sec. 2 Authorization for Sale, mortgage, or other encumbrance of realty to pay debts and legacies through personalty not exhausted
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Effect of Lack of Court Order
- Executor or administrator is prohibited from selling personal property of decedent without court order, even if heirs and other persons interest consented
Executor or administrator may be held answerable for selling decedent’s property without court order.
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7. Distribution and Partition (Rule 90)
Sec. 1 When Order for Distribution is Made
- The estate must first be settled in a special proceeding before a court can make a partition and distribution of the estate. Thus, only after:
After all the debts, funeral charges, expenses of administration, allowance to the widow, and estate tax have been paid;
Or before payment of said obligation, provide the distributees or any of them gives a bond in a sum fixed by the court
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Summary Settlement (74.2) -
May be chosen by the heirs regardless if the decedent died testate or intestate.
Requisites -
Upon compliance with the requisites, the courts may proceed summarily without the appointment of an executor/admministrator
There must be a petition by an interested person alleging fact that estate does exceed P10,000
Who files: Heirs, creditors, or other interested persons
Where: MTC
Scope of Court Authority During Hearings
-
During the hearing, the court may:
Proceed summarily without the appointment of an executor and administrator;
Admit the will to probate, if any;
Determine the heirs and persons legally entitled to participate in the estate
Once determined, the court can order the payment of debts, if any
Apportion and divide the estate among those entitled
Other powers by the court:
Make orders as may be just with regard to the cost of the proceedings
Order the recording in the office of the clerk all orders and judgments made or rendered during the hearings
Order that the orders and judgments be recorded in the Register of Deeds when the estate involves real estate
A. General rule is judicial administration, except
B. Liability of Distributees; How Enforced?
Liability of the Distributees and Estate (74.4) -
Excluded Heir
- If, within 2 years after settlement and distribution of an estate an heir has been unduly deprived of lawful participation in the estate, heir may compel the settlement of the estate.
May also file an action for reconveyance - For De Leon, this is only if 74.4 does not apply i.e., heir did not participate at all in the distribution.
10 years if based on trust,
4 years if fraud - based on the persons executing the EJS
imprescriptible if in actual possession.
Debts
- If, within same 2 years, there are outstanding debts unpaid or, heir/other person unduly deprived of lawful participation payable in money, the court may order, after hearing the settlement of the amount of debts or lawful participation with each distributtee contributing in amounts specified by the court.
May issue execution against the bond or against the real estate belonging to the deceased, or both
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Remedies of Aggrieved Parties after Settlement -
Subject to 2 year reglementary period
Claim on the bond for personal properties [Sec. 4, Rule 74]
Claim on lien on real property, notwithstanding any transfers of real property that may have been made [Sec. 4, Rule 74
Judicial settlement of estate [Sec. 4, Rule 74] - For the heirs
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No Will and No Debts
- Then two circumstances may arise:
Extrajudicial among heirs or adjudication of sole heir
partition, if heirs cannot agree
- If the heirs cannot agree as to a partition and no EJS is possible, an ordinary action for partition may be resorted to.
Small Estate; Some Debts
- summary settlement of estate
Scope of The Powers of the Court
- Not limited to summary settlement. May make orders as may be just with regard to the cost of the proceedings, as well as the power to order the recording in the office of the clerk all orders and judgments made or rendered in the course of the hearings it may order that the same be recorded in the office of the Register of Deeds when the estate involves real estate.
Claim of Third Person
- Third person may NOT claim title and ownership against the decedent int he summary proceedings.
Instead, must be done in an independent action. Otherwise, will be delayed.
There must be notice
Published once a week for 3 consecutive weeks
In a newspaper of general circulation in the province
There may also be other notice to interested persons as the court may direct
There must be a hearing
Held not less than 1 month nor more than 3 months
This is counted from the date of the last publication of notice
There would also be a bond in an amount
to be fixed by court if personal property is to be distributed [Rule 74.3 see below]
Extrajudicial settlement by agreement between heirs (74.1) -
Must comply with the following requisites for an EJS to be valid:
Decedent died Intestate
No Outstanding debts at time of settlement
Heirs are all of legal age or, minors represented by their guardians or legal representatives
Settlement is made in a public instrument/affidavit and filed with the Register of deeds
Publication in a newspaper of general circulation in the province
Filing of a bond equivalent to value of personal property posted with Register of Deeds
Simplified
-
No Will
No debts
Heirs are all of Age
Two Documents, Deed of EJS and, Affidavit of Self-adjudication
Form of EJS
- Dependent on the number of heirs.
Sole Heir
- Sufficient that the heir executes an affidavit of self-adjudication
More than One
- Settlement must be made in a public instrument, EJS or
Oral Partition (Vda de. Reyes v. CA)
- Oral partition is valid. No requirement that a written instrument is essential to the validity of the partition.
Rationale
- The requirement that a partition be put in a public document and registered has for its purpose the protec- tion of creditors and at the same time the protection of the heirs themselves against tardy claims.
The object of registration is to serve as constructive notice to others.
Thus, it follows that he intrinsic validity of partition not executed with the prescribed formalities does not come into play when there are no creditors or the rights of creditors are not affected
Where no such rights are involved, it is competent for the heirs of an estate to enter into an agreement for distribution in a manner and upon a plan different from those provided by law.
Partition among the heirs or renunciation of an inheritance by an heir is not exactly a conveyance of property from one to another. Instead, merely a confirmation or ratification of title or right of property.
On Whom Binding
- Being an ex parte proceeding, it can only bind persons who participated or had notice.
Contents of the EJS -
Who are the heirs
The properties involved or estate to be divided
The fact that there are no debts and obligations
And the actual partition
Procedure of EJS -
Approval is a ministerial duty of the register of deeds.
Division of estate in a public instrument or affidavit of adjudication
Filing of public instrument/affidavit with the proper Registry of Deeds and posting of a bond if the estate has personal property (bond equivalent to amount of personal property)
Publication of notice of the fact of extrajudicial settlement once a week for 3 consecutive weeks in a newspaper of general circulation in the province,
After such other notice to interested persons as the court may direct the court to proceed summarily
On Whom Binding
- Binds persons only who participated or, had notice.
Notice must be given before any deed of settlement or partition
Publication is not constructive notice to heirs, instead for the protection of creditors and not to deprive heirs of their lawful participation in the decedent’s estate
Bond Requirement
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Value
: The amount of the bond must be equivalent to the value of the personal property involved
When Required
: When personal property is involved
Real Property
: Real property is subject to lien in favor of creditors, heirs, or other persons for 2 years from the distribution of the estate
After EJS; Annotation
- Cancellation of deceased title and issuance of new title.
This new title will be annotated that the property may be subject to the liens.
Annotation - only serves as notice does not prohibit ability to dispose.
Cancellation of Annotation - must be through court
But, after 2 year period the annotation is functus officio. But still need to go through formality of cancellation.
A. Jurisdiction limited to adjudication and settlement of properties of deceased (73.1)
-
B. Testate v. Intestate
C. Where estate settled if resident v non-resident
meaning of residence (intent to return or intent to remain) - meaning, the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical presence in a place and actual stay thereat
residence pertains to venue only, not jurisdiction, hence waivable
Inhabitant of the PH (citizen or alien) at the time of death
- Court of the province where decedent resided at the time of death
Inhabitant of a foreign country at the time of death
- Court of any province where decedent had estate
D. Jurisdiction limited to adjudication and settlement of properties of deceased
-
The Probate Court has limited juridsiction, primarily concerned only with ALD or:
Administration
Liquidation
Distribution of Estate
Extent of Authority -
These are the only matters relevant to the distribution of the estate of the deceased person.
Determine the heirs
Identify the properties of the estate
Make a just and legal distribution of the estate
Other incidental or collateral matters to the settlement and distribution of estate
E. Exceptions Title to Property (Agtarap v. Agtarap) -
GR
- Probate court cannot adjudicate or determine title to properties claimed to be a part of the estate and equally claimed as belonging to outside parties
XCPN
-
2a.
Inventory
- To determine whether property should or should not be included in the inventory (Provisional only)
2b.
No Impairment
- Interested parties are heirs who have all appeared in the proceeding and rights of third parties are not impaired
2c.
Consent
- Parties have consented to the probate court passing upon the ownership of a property subject of the probate proceedings
2d.
Collation
- The question is one of collation or
advancement
Requirement of Special proceeding for Heirship
-
GR
- The common doctrine in Litam, Solivio and Guilas in which the adverse parties are putative heirs to the estate of a decedent or parties to the special proceedings for its settlement is that if the special proceedings are pending, or if there are no special proceedings filed but there is, under the circumstances of the case, a need to file one, then the determination of, among other issues, heirship should be raised and settled in said special proceedings.
XCPN
- Where special proceedings had been instituted but had been finally closed and terminated, however, or if a putative heir has lost the right to have himself declared in the special proceedings as co-heir and he can no longer ask for its re-opening, then an ordinary civil action can be filed for his declaration as heir in order to bring about the annulment of the partition or distribution or adjudication of a property or properties belonging to the estate of the deceased. :
Collateral Jurisdiction (Agtarap v. Agtarap)
- its jurisdiction extends to matters incidental or collateral to the settlement and distribution of the estate, such as the determination of the status of each heir and whether the property in the inventory is conjugal or exclusive property of the deceased spouse
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Provisional Authority
- The intestate court may pass upon the title to a certain property for the purpose of determining whether the same should be included in the inventory BUT such determination is not conclusive and is subject to a final decision in a separate action of ownership which may be constitued by the parties.
Primary Purpose
- Settlement of the estate. This is why you go through the required steps.
Preference of Testacy
- As a rule, there is a preference for testate proceedings over intestate proceedings. Thus, even if intestate proceeding filed first, it may be dismissed with testate upheld.
Requisites for Probate (IN RE: IN THE MATTER OF THE PETITION TO APPROVE THE WILL OF RUPERTA PALAGANAS )
– Petition for probate/allowance of a will must show the following jurisdictional facts
Fact of death of the decedent
His residence at the time of his death in the province where the probate court is sitting
if he is an inhabitant of a foreign country, the estate he left in such province
Names, ages, and residences of the heirs, legatees, and devisees of the testator or decedent
Probable value and character of the property of the estate
Name of the person for whom letters are prayed
If the will has not been delivered to the court, the name of the person having custody of it.
Rationale -
If Probate First
- Consolidate, because probate can cover everything intestate can + probate is mandatory.
Intestate First
- Hold in abeyance, because pending finding of allowance of probate.
Jurisdictional Amounts
Within Metro Manila
1a. MTC - If gross value 300k or Loss
RTC - If Gross value 301k or more
Without Metro Manila
1a. MTC - If gross value 400or Loss
RTC - If Gross value 401k or more
Dissolution of Marriage (73.2)
- When the marriage is dissolved by the death of the husband or wife, the community property shall be inventoried, administered, and liquidated, and the debts thereof paid, in the testate or intestate proceedings of the deceased spouse
Death of both Spouses
- If both spouses have died, the conjugal partnership shall be liquidated in the testate or intestate proceedings of either.
Process of Probate (73.3)
- Courts may issue warrants and process necessary to compel the attendance of witnesses or to carry into effect theirs orders and judgments, and all other powers granted them by law.
Apprehension/Arrest
- If a person does not perform an order or judgment rendered by a court in the exercise of its probate jurisdiction, it may issue a warrant for the apprehension and imprisonment of such person until he performs such order or judgment, or is released.
Mandatory Nature
- Probate is mandatory
Presumption of Death (73.4)
- For purposes of settlement of his estate, a person shall be presumed dead if absent and unheard from for the periods fixed in the Civil Code.
Civil Code Periods
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10 years - for purposes of opening up the succession
5 years - if disappeared after age of 75
4 years - in special situations
Recovery of Absentee (NCC 392)
- But if such person proves to be alive, he shall be entitled to the balance of his estate after payment of all his debts. The balance may be recovered by motion in the same proceeding.
Proper Venue (73.3)
- Determined by the residency of the deceased.
Philippine Resident - In the CFI int he province wherein they reside at the time of death.
Non-PH Resident - the CFI of any province where he had estate.
Rule of Exclusion
- The court taking first cognizance exercises jurisdiction tot he exclusion of all other courts.
Appeal from Jurisdiction
-
GR
- Such Jurisdiction shall not be contested in a suit or proceeding
XCPN
- In an appeal from that court, int he original case OR when the want of jurisdiction appears on the record.
Residual Jurisdiction
- If ordinary court has jurisdiciton, continues to exercise jurisdiction over
Modes of Distribution of Estate
- 7 available ways, however, specific rules apply to specific instances. Thus, for any given situation, only one correct way of distribution.
Steps -
Mode of Distribution determined by extant conditions at time of distribution.
Check if Will
Check Value of the Estate
Check if Creditors
3a. If yes, Judicial Administration
If No, check # of heirs, will determine mode of intestate administration
Factors to Determine -
Residence
- Determines Venue
Gross Value of the Estate
- Determines which court has jurisdiction in that area
A special proceeding for the settlement of the estate is intended to settle the entire estate of the deceased.
What the petitioner seeks to establish in this proceeding is the fact of death of the decedent.
● This is so that the heirs could validly exercise their right to participate in the settlement and liquidation