Concept of "Legitime" in Philippine Law

Legitime refers to the portion of a deceased person’s estate that is reserved by law for compulsory heirs and cannot be freely disposed of by the decedent through a will. It is a mechanism to protect the rights of certain heirs, ensuring they receive a minimum share of the inheritance.

Law Governing Legitime

Legitime is primarily governed by the Civil Code of the Philippines, particularly Articles 886 to 914 under Title IV (Succession), Chapter 3 (Provisions Common to Testamentary and Legal Succession), and Section 5 (Legitime).

Who Are the Compulsory Heirs?

According to Article 887 of the Civil Code, the following are considered compulsory heirs:

1. Legitimate children and descendants (e.g., grandchildren, if their parent predeceased the decedent)

2. Legitimate parents and ascendants (if the decedent has no children)

3. The surviving spouse

4. Illegitimate children (who have a right to a legitime but receive a reduced share compared to legitimate children)

How Legitime Is Applied

The legitime is a fixed portion of the estate that the decedent cannot freely dispose of. The remaining estate is called the free portion, which the testator may distribute according to his will.

1. If the decedent has legitimate children:

• The legitime of legitimate children is 1/2 of the total estate, to be divided equally among them.

• The surviving spouse gets 1/4 of the total estate (equivalent to the share of one legitimate child).

• Illegitimate children get 1/2 of the share of a legitimate child each.

2. If the decedent has no children but has surviving parents or ascendants:

• The legitime of parents (or ascendants) is 1/2 of the total estate.

• The surviving spouse gets 1/2 of the total estate.

3. If the decedent has only a surviving spouse:

• The legitime of the spouse is 1/2 of the total estate.

4. If the decedent has only illegitimate children:

• The illegitimate children receive 1/2 of the total estate, divided among them.

• The surviving spouse gets 1/2 of the total estate.

Restrictions on Disposition of Property

A testator cannot will away the legitime of compulsory heirs, either through donations or by testamentary disposition. If a will reduces the legitime, the heirs can seek a reduction of the will’s provisions to comply with the mandatory legitime rules.

Disinheritance and Legitime

A compulsory heir may be disinherited, but only under specific grounds stated in the Civil Code (Articles 915–923), such as attempted murder against the testator, maltreatment, or refusal to provide support. If a compulsory heir is validly disinherited, his legitime goes to the other compulsory heirs.

Source: Ziggurat Real Estate

How a Foreigner Can Receive Land Inheritance in the Philippines

Legal Framework and Limitations 

Introduction

The Philippines has strict laws regulating land ownership by foreigners. Under Section 7, Article XII of the 1987 Philippine Constitution, land ownership is reserved for Filipino citizens and corporations that are at least 60% Filipino-owned. This provision aims to safeguard national resources and ensure that land remains primarily in Filipino hands. However, the law allows for certain exceptions in specific situations, such as inheritance. A common question that arises is whether a foreigner can inherit land in the Philippines and, if so, how they can legally receive their inheritance.

This article outlines the legal framework surrounding land inheritance by foreigners, the limitations set by Philippine law, and the possible courses of action for foreigners who inherit land in the country.

 Legal Basis for Land Ownership by Foreigners

The general rule under Philippine law is that foreigners are prohibited from owning land. However, there are a few exceptions to this rule:

1. By Hereditary Succession: A foreigner may acquire land in the Philippines through inheritance, but only if the land is passed to them as a legal or intestate heir. The law does not prevent foreigners from inheriting land from a Filipino relative, but it imposes certain restrictions on how long they may keep the land or whether they must dispose of it.

2. Ownership of Buildings or Improvements: While land ownership is restricted, foreigners may legally own buildings and other improvements built on land, as there is no prohibition on ownership of personal property such as houses or structures.

3. Acquisition by a Former Natural-Born Filipino Citizen: Foreigners who were previously natural-born Filipino citizens may acquire up to a certain size of land for residential (up to 1,000 square meters) or business (up to 5,000 square meters) purposes.

 Inheritance by Foreigners: General Rule and Exceptions

Under Philippine law, a foreigner can inherit property either through testate (with a will) or intestate (without a will) succession. If a foreigner is designated as an heir to land in the Philippines, the following scenarios may arise:

1. Foreigners Inheriting Land through Testate or Intestate Succession:

   - A foreigner can inherit land from a Filipino relative as an heir by intestate succession (when there is no will) or testate succession (when there is a valid will). For example, if a Filipino spouse or parent dies and leaves land to a foreigner as an heir, the foreigner may inherit that land.

2. Limitations on Land Ownership by Foreigners:

   - Although foreigners can legally inherit land, they cannot own the land permanently. A foreigner who inherits land is generally expected to sell or dispose of the property within a reasonable time because long-term ownership of land by foreigners is prohibited under the Constitution.

 Options for Foreigners Who Inherit Land

When a foreigner inherits land in the Philippines, they have a few legal options to comply with the constitutional restrictions while still benefiting from the inheritance:

1. Disposition of the Land:

   - A foreigner who inherits land must generally sell or dispose of the property. The law does not specify a fixed timeframe, but the general understanding is that the sale or transfer should be completed within a reasonable period.

   - The foreigner may sell the property to a Filipino citizen or to a corporation that meets the 60% Filipino ownership requirement.

   - The proceeds from the sale of the land can then be received by the foreign heir.

2. Transfer of Ownership to Filipino Relatives:

   - Instead of selling the property to third parties, a foreign heir may choose to transfer ownership of the land to Filipino relatives. This is a common course of action for foreigners who want to keep the property within the family. The foreign heir can also execute a deed of donation or transfer to a Filipino spouse or children who are Filipino citizens.

3. Retaining Ownership of Improvements:

   - A foreigner who inherits both land and structures on the property can retain ownership of the improvements (e.g., house or building) while transferring the land itself to a qualified Filipino citizen or corporation. The foreigner can negotiate a long-term lease for the land on which the structure stands.

4. Former Natural-Born Filipinos:

   - A special exception is made for foreigners who were once natural-born Filipino citizens. Under Batas Pambansa Blg. 185 and Republic Act No. 8179, former Filipino citizens can inherit and own land, subject to the following limitations:

     - Up to 1,000 square meters of residential land.

     - Up to 5,000 square meters of urban land or up to three hectares of rural land for business or commercial purposes.

   - If the foreign heir was a natural-born Filipino citizen but later acquired foreign citizenship, they can still legally inherit and retain ownership of a limited portion of land.

 Practical Considerations for Foreigners Inheriting Land

While the legal framework allows foreigners to inherit land, certain practical and procedural considerations arise:

1. Probate or Estate Settlement:

   - Whether the foreigner is an heir under a will or under intestate succession, the estate of the deceased must undergo probate or estate settlement. This is the legal process of distributing the assets of the deceased to the heirs. Foreign heirs must participate in this process to formally receive their inheritance.

2. Legal Assistance:

   - Given the complexity of land laws and inheritance procedures, foreign heirs are strongly advised to seek legal assistance from a Philippine attorney who specializes in estate law and land ownership issues. This ensures that the foreign heir complies with the law and secures the best possible outcome for their inheritance.

3. Taxation:

   - Foreigners inheriting land are subject to the same inheritance taxes as Filipino heirs. The estate tax is based on the value of the deceased’s estate at the time of death. Taxes must be settled before the transfer of ownership or sale of the property can be completed.

4. Repatriation of Proceeds:

   - If a foreign heir chooses to sell the inherited land, they must also comply with foreign exchange regulations when repatriating the proceeds of the sale out of the Philippines. The proceeds from the sale can generally be repatriated with proper documentation and compliance with Bangko Sentral ng Pilipinas (BSP) rules.

 Conclusion

While the Philippine Constitution restricts land ownership by foreigners, it allows for exceptions when land is inherited through succession. Foreigners who inherit land can receive their inheritance but must dispose of the land in compliance with constitutional limitations. Whether by selling the land, transferring it to Filipino relatives, or retaining ownership of improvements, foreign heirs have several legal options to manage their inheritance. However, these options must be exercised carefully, and it is advisable for foreign heirs to seek legal counsel to navigate the complexities of land inheritance in the Philippines.

Understanding the legal framework, procedural requirements, and practical considerations ensures that a foreigner can maximize the benefits of their Philippine land inheritance while remaining compliant with the law.

Source: Ziggurat Real Estate

How to Probate a Will in the Philippines: A Comprehensive Guide

 Introduction

The probate of a will is a judicial process that validates and authenticates a deceased person's will, ensuring that it was executed in compliance with legal formalities and reflects the true intentions of the testator (the person who made the will). In the Philippines, probate is mandatory for all wills, whether they are notarial (executed before a notary public) or holographic (entirely handwritten by the testator). Probate guarantees that the estate is distributed according to the will's provisions and under Philippine law, particularly regarding the rights of compulsory heirs.

This comprehensive guide walks you through the probate process in the Philippines, from the filing of the petition to the final distribution of the estate.

 Legal Framework for Probate in the Philippines

Probate proceedings are governed by the Rules of Court under Rule 73 to Rule 77, as well as by the provisions of the Civil Code of the Philippines (Articles 838 to 841) concerning the execution and validity of wills. A will must undergo probate to be legally enforceable, and the court will determine:

1. Whether the will was properly executed.

2. The mental capacity of the testator at the time of execution.

3. Whether the will was free from fraud, duress, or undue influence.

4. Whether the provisions comply with the rules on compulsory heirs and legitime.

 Types of Wills in the Philippines

1. Notarial Will: This type of will is formal, requiring witnesses and notarization. It must be in writing and signed by the testator and at least three credible witnesses. Notarial wills must comply with strict formalities under Article 805 of the Civil Code.

2. Holographic Will: A simpler form, a holographic will is entirely handwritten, dated, and signed by the testator. It does not require witnesses, but the handwriting and signature must be verified during probate.

 Importance of Probate

Probate is essential for ensuring the distribution of the estate according to the testator's wishes and in accordance with the law. Without probate, the will cannot be executed, and the estate would be distributed according to the rules of intestate succession (when no will exists). Probate protects both the estate's beneficiaries and any creditors of the deceased.

 Step-by-Step Guide to Probating a Will in the Philippines

1. Filing a Petition for Probate

The first step in probating a will is filing a petition for probate with the appropriate Regional Trial Court (RTC). The petition may be filed by an executor, a beneficiary, or any person interested in the estate. The petition must contain:

- The name and address of the deceased.

- The date and place of death of the testator.

- The names of heirs and beneficiaries.

- A summary of assets and liabilities.

- The will to be probated (either notarial or holographic).

The petition must be filed in the RTC of the place where the decedent resided at the time of death.

2. Court Issuance of Notice and Publication

After the petition is filed, the court will issue a notice of hearing to all interested parties, such as the heirs, beneficiaries, and creditors of the deceased. The court may also order the publication of the notice in a newspaper of general circulation for three consecutive weeks. This allows any interested parties to oppose the probate of the will if they believe it is invalid.

3. Opposition to Probate (If Any)

If any interested party believes that the will is not valid (for example, if it was executed without proper formalities, under undue influence, or by a mentally incapacitated testator), they may file an opposition to the probate. The opposition must be supported by evidence, and the court will conduct hearings to evaluate the claims.

4. Presentation of Evidence

During the probate hearings, the petitioner will present evidence to prove the validity of the will. This may include:

- Testimony from the witnesses who signed the notarial will.

- Presentation of the holographic will and verification of the testator’s handwriting by credible witnesses or experts.

- Medical records or testimony if the testator's mental capacity is questioned.

The court will ensure that the will complies with the legal formalities outlined in the Civil Code and the Rules of Court.

5. Probate of Notarial and Holographic Wills

The court will differentiate between the types of wills during probate:

- For notarial wills, the court will verify whether the will was signed by the testator and witnessed in the presence of a notary public. The formalities under Articles 805 and 806 of the Civil Code must have been observed.

- For holographic wills, the court will ensure that the will was entirely handwritten, dated, and signed by the testator. The court may require witnesses to authenticate the handwriting and signature.

6. Court Decision and Issuance of Probate Order

After evaluating the evidence, the court will issue its decision on the validity of the will. If the court finds the will valid, it will issue a probate order. This order confirms that the will is valid and that the estate can be administered according to the will’s provisions.

If the will is found invalid (e.g., due to improper execution, mental incapacity, or fraud), the court will declare it null, and the estate will be distributed according to intestate succession laws.

7. Appointment of Executor or Administrator

Once the will is probated, the court will appoint the executor named in the will (if any) to administer the estate. If no executor is named or the named executor is unable or unwilling to serve, the court will appoint an administrator.

The executor or administrator is responsible for:

- Collecting the assets of the deceased.

- Paying debts and taxes.

- Distributing the remaining estate to the beneficiaries as per the will.

8. Estate Settlement

The final step in the probate process is the settlement of the estate. After debts, taxes, and expenses have been paid, the executor or administrator will file a final accounting of the estate with the court. Once approved, the court will issue an order for the distribution of the estate according to the terms of the will.

 Key Considerations in the Probate Process

1. Rights of Compulsory Heirs:

   - Philippine law protects the rights of compulsory heirs, such as legitimate children, surviving spouse, and parents. Even if the testator makes a will, they cannot disinherit compulsory heirs without a valid reason, and they are entitled to a legitime, a portion of the estate reserved by law.

2. Intestate Succession:

   - If the will is invalidated or there is no will, the estate will be distributed through intestate succession, which follows the legal order of heirs under Articles 978 to 1019 of the Civil Code.

3. Probate Fees:

   - Probate can be costly, involving court fees, publication fees, and the cost of hiring a lawyer to guide the executor or administrator through the legal process.

4. Timeline:

   - The probate process can take several months to years, depending on the complexity of the estate and whether any opposition is filed. Simplified estates with no opposition can proceed faster.

5. Taxes:

   - Estate taxes must be settled before the assets can be distributed. Under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, the estate tax rate is 6% of the net estate.

 Conclusion

Probating a will in the Philippines is a complex but necessary legal process to ensure that the wishes of the deceased are carried out and that the estate is distributed fairly. Whether the will is notarial or holographic, the probate process validates the document and confirms the rightful beneficiaries of the estate. Beneficiaries, heirs, and executors must understand the probate process to protect their rights and interests and ensure compliance with Philippine inheritance laws. Given the complexity of probate, legal assistance is often crucial to navigate the various requirements and stages effectively.

Source: Ziggurat Real Estate