Extrajudicial Settlement of Estate (Rule 74)

Step-by-step out-of-court procedure for surviving heirs to settle inherited property, pay estate taxes, and transfer land titles.

Rules of Court, Rule 74, Secs. 1 & 4; Civil Code, Arts. 777 & 1078; TRAIN Law (RA 10963)2deadlines to watch

Who this is for: Surviving heirs and family members settling deceased relatives' estates without court litigation.

Step by step

1Verification of Requisites under Rule 74Out-of-court settlement is only allowed if the deceased left: (1) no will, (2) no outstanding unpaid debts, and (3) all heirs are of legal age or properly represented by legal guardians.
2Drafting & Notarization of the Settlement DeedThe heirs execute an Extrajudicial Settlement of Estate (or Affidavit of Self-Adjudication if there is only one sole heir). If selling immediately to a third party, an Extrajudicial Settlement with Simultaneous Deed of Absolute Sale is prepared. Every compulsory heir must sign.
3Three-Week Newspaper PublicationRule 74, Section 1 mandates publication of the settlement in a newspaper of general circulation in the province or city once a week for three consecutive weeks. Obtain the publisher's affidavit of publication.Once a week for 3 consecutive weeks.
4BIR Estate Tax Filing & eCAR IssuanceFile the Estate Tax Return (BIR Form 1801) within 1 year from death. Under the TRAIN Law (RA 10963), the estate tax rate is 6% of the net estate. The BIR issues the electronic Certificate Authorizing Registration (eCAR).Within 1 year from date of death.
5Local Transfer Tax & Register of Deeds RegistrationPay the transfer tax at the local treasurer (within 60 days of death or assessment). Present the eCAR, deed, publication affidavit, and transfer tax receipt to the Register of Deeds to issue new TCTs in the heirs' or buyer's name.

Not legal advice

Pangkalahatang impormasyon lamang ito para sa edukasyon — hindi ito legal advice, at hindi ito sinuri ng abogado. Sinikap naming tama ito ayon sa batas na binanggit, pero para sa sarili mong kaso, kumonsulta sa abogado o sa Public Attorney's Office (PAO).

The whole process

Drawing diagram…

Watch out for

Under Rule 74, Section 4, a statutory lien is automatically annotated on the back of the title for two years. If an omitted heir or estate creditor appears within 2 years, they can compel court settlement.
Never pay the full purchase price of inherited land to only one heir while the title remains in the deceased person's name without an executed settlement and verified BIR eCAR.
Waiver of hereditary rights must appear in a public instrument under Article 1358 of the Civil Code.