Extrajudicial Settlement of Estate (Philippines) — Sample and Generator

DEED OF EXTRAJUDICIAL SETTLEMENT OF ESTATE

KNOW ALL MEN BY THESE PRESENTS:

That we, [JUAN R. DELA CRUZ], 42 years old, married, Filipino, and a resident of [12 Rizal Street, Barangay Malanday, Marikina City]; [MARIA DELA CRUZ-SANTOS], 38 years old, married, Filipino, and a resident of [45 Bonifacio Avenue, Barangay Concepcion, Marikina City]; and [PEDRO R. DELA CRUZ], 35 years old, single, Filipino, and a resident of [12 Rizal Street, Barangay Malanday, Marikina City], hereinafter collectively referred to as the HEIRS,

WITNESSETH: That —

WHEREAS, [PEDRO S. DELA CRUZ] (the "Decedent") died intestate on [12 March 2026] in [Marikina City], as evidenced by the Certificate of Death issued by the Philippine Statistics Authority;

WHEREAS, at the time of his death the Decedent was a [widower], and left no last will and testament;

WHEREAS, the Decedent left no debts or outstanding obligations of any kind, and no proceedings for the settlement of his estate have been instituted in any court;

WHEREAS, the HEIRS named above are the only surviving heirs of the Decedent, being his legitimate children, and all of them are of legal age;

WHEREAS, the Decedent left the following properties:

     1. A parcel of land situated in [Barangay Malanday, Marikina City], containing an area of
        [ONE HUNDRED EIGHTY (180) SQUARE METERS], covered by [Transfer Certificate of Title
        No. 22334] of the Registry of Deeds for [Marikina City], with an assessed value of
        [P____________];

     2. A savings account with [Banco de Oro, Marikina branch], under Account No.
        [001234567890], with a balance of [P____________] as of the date of death;

     3. One (1) [Toyota Innova, 2016 model, Plate No. XYZ 987], covered by Certificate of
        Registration No. [____________];

NOW THEREFORE, pursuant to Section 1, Rule 74 of the Rules of Court, the HEIRS do hereby agree to divide, adjudicate and partition the above-described estate among themselves, in the following manner:

1. The parcel of land described in paragraph 1 above shall be adjudicated to the HEIRS in equal undivided shares of one-third (1/3) each, pro indiviso;

2. The bank account described in paragraph 2 above shall be divided equally among the HEIRS, share and share alike;

3. The motor vehicle described in paragraph 3 above shall be adjudicated solely to [PEDRO R. DELA CRUZ];

4. The HEIRS jointly and severally warrant that the Decedent left no debts, and they hereby bind themselves to answer for any lawful claim that may be filed against the estate within two (2) years from the date hereof, in proportion to their respective shares, in accordance with Section 4 of Rule 74 of the Rules of Court;

4-A. The personal property comprised in the estate, consisting of the bank deposit and the motor vehicle described above, has an aggregate value of [P____________] as certified to under oath by the HEIRS; and the HEIRS shall file with the Register of Deeds, simultaneously with and as a condition precedent to the filing of this Deed, a bond in that amount, conditioned upon the payment of any just claim that may be filed under Section 4 of Rule 74 of the Rules of Court;

5. The HEIRS undertake to cause the publication of this Deed once a week for three (3) consecutive weeks in a newspaper of general circulation in [Marikina City / the Province of Rizal], as required by Section 1 of Rule 74, and to secure the corresponding Affidavit of Publication;

6. The HEIRS further undertake to file the estate tax return and to pay the estate tax due within the period prescribed by law, and to secure the electronic Certificate Authorizing Registration from the Bureau of Internal Revenue;

7. The HEIRS shall sign and execute any and all further documents necessary to give full effect to this settlement and to secure the transfer of the properties into their respective names.

IN WITNESS WHEREOF, the HEIRS have hereunto set their hands this ____ day of __________, 20____, at [Marikina City], Philippines.

______________________________          ______________________________
[JUAN R. DELA CRUZ]                      [MARIA DELA CRUZ-SANTOS]
Heir                                     Heir

______________________________
[PEDRO R. DELA CRUZ]
Heir

SIGNED IN THE PRESENCE OF:

______________________________          ______________________________
Witness                                  Witness

REPUBLIC OF THE PHILIPPINES )
CITY OF [MARIKINA CITY] ) S.S.
x----------------------------------------x

ACKNOWLEDGMENT

BEFORE ME, a Notary Public for and in [Marikina City], this ____ day of __________, 20____, personally appeared the above-named heirs, exhibiting to me their competent evidence of identity, known to me and to me known to be the same persons who executed the foregoing Deed of Extrajudicial Settlement of Estate, and they acknowledged to me that the same is their free and voluntary act and deed.

This instrument, consisting of ____ page(s), including this page on which this acknowledgment is written, has been signed by the heirs and their instrumental witnesses on each and every page hereof.

WITNESS MY HAND AND SEAL on the date and at the place first above written.

                                        ______________________________
                                        Notary Public

Doc. No. ______;
Page No. ______;
Book No. ______;
Series of 20____.

When you are allowed to settle out of court

Section 1 of Rule 74 of the Rules of Court lets heirs skip judicial settlement, but only when every one of these is true:

The bond — required by the rule, not by the registry

This is the requirement most often described wrongly, including on pages that otherwise get Rule 74 right. Section 1 provides that the parties to an extrajudicial settlement, or the sole heir who adjudicates the estate to themselves by affidavit, “shall file, simultaneously with and as a condition precedent to the filing of the public instrument … or of the affidavit in the office of the register of deeds, a bond with the said register of deeds, in an amount equivalent to the value of the personal property involved as certified to under oath by the parties concerned and conditioned upon the payment of any just claim that may be filed under Section 4 of this rule.”

Read what that says. The bond is not something a registry may or may not ask for as a matter of local practice; where personal property is involved the rule itself imposes it, and imposes it as a condition precedent — it goes in at the same time as the deed, not afterwards. Its amount is fixed by the value of the personal property, sworn to by the parties, and its condition is the payment of any just claim under section 4. It has nothing to do with the land: a bond is not required because the estate includes a house and lot, and its amount is not computed on the value of the land.

The two-year window nobody mentions

Section 4 of Rule 74 is the provision that makes extrajudicial settlement risky, and it is the one most guides leave out. For two years after the settlement, an heir who was unfairly deprived of their share, or a creditor with a lawful claim, can compel the heirs who took part to make good — and the properties themselves remain liable, even in the hands of a buyer who acquired within that period. That two-year lien is what the bond under section 1 secures where personal property is involved, and what the annotation on the new titles records.

The Register of Deeds annotates this liability on the new titles. That annotation is why a buyer's lawyer will look hard at any title carrying a Rule 74 section 4 notation dated less than two years ago, and why such properties are often discounted or sold with an escrow arrangement.

The full process, end to end

1. 1

   1. Gather the documents

   PSA death certificate; PSA birth and marriage certificates proving every heir's relationship; titles, tax declarations, bank certifications and certificates of registration for every asset; TINs for the estate and for every heir; and a certificate of no improvement where a lot is vacant.

2. 2

   2. Agree on the division

   Every heir must agree. If one is abroad, they execute a consularised or apostillised SPA authorising a co-heir to sign, or sign their own counterpart. If an heir is waiving their share, that is a separate waiver with its own tax consequences.

3. 3

   3. Execute and notarise the deed

   All heirs sign every page, with two instrumental witnesses, before a notary public.

4. 4

   4. Publish once a week for three consecutive weeks

   In a newspaper of general circulation in the province where the deceased resided. Keep the clippings and get the publisher's Affidavit of Publication — the BIR and the Register of Deeds both ask for it.

5. 5

   5. File the estate tax return and pay

   BIR Form 1801, within one year of death. Since RA 11976 amended section 90(D) of the Tax Code, the return may be filed and the tax paid either electronically or manually — with any authorised agent bank, an RDO through a Revenue Collection Officer, or an authorised tax software provider. Late filing draws a surcharge and interest computed on the tax legally due, so an estate that owes nothing after the deductions has no base for either, though a compromise penalty for filing late may still be assessed. Instalment payment over two years is available where the estate is illiquid.

6. 6

   6. Obtain the eCAR

   One eCAR per property. Without it the Register of Deeds and the banks will not release anything.

7. 7

   7. Pay the local transfer tax and register

   LGU treasurer, then the Register of Deeds for each parcel of land. New titles issue in the heirs' names, carrying the Rule 74 section 4 annotation.

8. 8

   8. Update the tax declarations and claim the rest

   Assessor's office for the tax declarations, the bank for the deposits, the LTO for the vehicles.

What it costs

Legal basis: Rules of Court, Rule 74 sec. 1 (extrajudicial settlement and self-adjudication, the public instrument, the bond equal to the value of the personal property as a condition precedent to filing with the Register of Deeds, publication, and the rule that no extrajudicial settlement binds a person who did not participate in it or had no notice of it) and sec. 4 (the two-year liability of distributees and the lien on the distributed property); Civil Code arts. 960–1105 (succession); National Internal Revenue Code secs. 84–97 as amended by RA 10963 (6% estate tax, ₱5,000,000 standard deduction, family home deduction of up to ₱10,000,000, one-year filing deadline) and sec. 90(D) as amended by RA 11976 on where the return is filed and the tax paid.

Settlement with sale

Heirs frequently want to sell the property rather than hold it in common. This can be done in one instrument — a Deed of Extrajudicial Settlement of Estate with Sale — in which the heirs settle the estate and, in the same deed, convey the property to a buyer. It saves a round of documentation, but it means two tax events: the estate tax on the transmission to the heirs, and then the transfer taxes on the sale. Which transfer taxes those are depends on how the property is classified in the heirs' hands. For heirs who inherited a family home or a lot and are not in the real estate business and have not used the property in a trade or business, it is a capital asset and the 6% final tax under section 24(D)(1) applies, on BIR Form 1706. Where the property is an ordinary asset — for example an inherited commercial building the heirs have been renting out as a business, or property held by an heir who deals in real estate — there is no capital gains tax and the sale falls under the ordinary income-tax and creditable-withholding-tax rules instead. Documentary stamp tax at 1.5% applies to the conveyance either way, and everything must be settled before the eCAR issues.

What if…

1. 1

   …one heir refuses to sign

   Extrajudicial settlement is not available. Your options are to negotiate, to buy out their share, or to file a judicial partition. There is no way to settle extrajudicially over an heir's objection.

2. 2

   …an heir is a minor

   A minor must be represented by a judicial or legal representative duly authorised for the purpose, which in practice usually means court authority for the guardian. A parent signing 'for' a minor child without that authority produces a settlement that the child can attack on reaching majority.

3. 3

   …the deceased left debts

   Rule 74 is not available. The debts must be settled first, or the estate goes through judicial settlement where creditors file their claims.

4. 4

   …an heir lives abroad

   They execute a consularised or apostillised SPA authorising a co-heir to sign, or sign a counterpart deed before the Philippine Embassy. Where the document was signed on paper, the original has to reach the Philippines: a scan of a wet-ink original is a photocopy, and a registry will not act on it. That is a point about photocopies, not about electronic documents — a document validly notarised under the Rules on Electronic Notarization is a different thing, and whether the receiving office will take one in electronic form is a question for that office.

5. 5

   …you discover another heir afterwards

   The settlement is not binding on them. Within two years they can compel the distributees to give up their share, and the properties remain liable. The honest and cheaper course is to include everyone from the start.

6. 6

   …the deceased died years ago and nothing was done

   You can still settle now, but the estate tax has been accruing surcharge and interest since the one-year deadline. The amnesty that used to forgive this expired on 14 June 2025. Get a computation from the BIR before assuming the worst — the standard deduction still applies and many modest estates end up owing little.