A brief overview of extrajudicial settlement

When a person passes on, those left behind are often faced not only with emotional loss but also with the task of settling the person’s affairs. The process of estate settlement affects families from all walks of life, regardless of the size or value of the estate involved. It is therefore not surprising that estate settlement continues to receive public attention, including through proposals in Congress relating to estate tax, such as bills seeking to extend estate tax amnesty programs or to revisit the existing estate tax system itself. While these proposals remain under discussion, they reflect a shared recognition that estate settlement is a common and often challenging experience for many Filipinos and foreigners who have properties in the Philippines.

Estate settlement is the process by which a decedent’s properties, rights, and obligations are identified, settled, and transferred to his or her heirs. There are different ways to complete this in the Philippines, depending on the circumstances. One of the most commonly used methods is extrajudicial settlement (EJS) which allows heirs to settle the estate among themselves without going to court. This is allowed if the decedent did not leave any will, there are no unpaid debts (or the heirs agree to take responsibility for them), and all heirs sign and publish the agreement to divide the estate.

For many families, EJS offers a way to move forward without the added cost, time, and formality associated with judicial processes. However, while EJS simplifies the procedure, it does not remove the legal and tax requirements that accompany the transfer of property from one party to another.

The EJS process actually starts with the determination of who are the heirs and what are the properties left by the deceased. The heirs will then have to decide how the properties will be divided among themselves. This agreement must be formalized in a notarized deed of extrajudicial settlement, which must be published once a week for three consecutive weeks in a newspaper of general circulation. These procedural steps, while straightforward in principle, also form the basis for subsequent steps involving taxes and property transfers.

Tax law imposes a 6% estate tax on the transfer of a decedent’s net estate upon death to the heirs, regardless of whether the estate is settled through court proceedings or through EJS. The law allows certain deductions to arrive at the net estate subject to tax, such as the value of the family home or certain properties received prior to death, subject to limitations.

Beyond estate tax, the way the heirs apportion the estate can also have separate tax consequences. A 6% donor’s tax may apply if an heir gives up part of his or her rightful share so that another heir receives more than his or her legal share. Donor’s tax can likewise be imposed when there is a specific renunciation in favor of a particular co‑heir, as opposed to a general renunciation. In a recent Court of Tax Appeals (CTA) case, the court held that although certain paragraphs of the EJS appeared to indicate a general renunciation (i.e., without designating a specific recipient), these were effectively negated by later provisions that clearly directed the repudiated shares in favor of a specific heir. Consequently, the CTA considered renunciation in the EJS as a gratuitous transfer or donation. Careful drafting and aligning allocations with legal shares help avoid unintended donor’s tax exposure.

Where land or other real property forms part of the estate, local taxes likewise come into play. Under the Local Government Code, local government units are authorized to impose a tax on the transfer of ownership of real property, including transfers by donation and inheritance. The specific rates and procedures may vary depending on the city or municipality, adding another step to the settlement process.

Notably, settling an estate also involves the submission of required documents (e.g., death certificate of the decedent, the deed of extrajudicial settlement, proof of publication of EJS, tax declarations, certificates of title), filing the estate tax return, and paying the tax due to the Bureau of Internal Revenue (BIR). Heirs or their representative must also secure a Certificate Authorizing Registration (CAR) from the BIR for each property before any transfer can be recorded by other institutions such as the Register of Deeds (RD) and the Land Transportation Office (LTO).

Ultimately, beyond these required documents and processes, it’s important to recognize the human context in which estate settlement takes place. Families often begin the settlement process while still grieving the loss of a loved one. During this period, attention is understandably focused on personal and family matters, and the completion of legal and tax requirements may not be an immediate priority. In reality, this may contribute to delays in filing estate tax returns or settling tax obligations within the periods prescribed by law, resulting in the imposition of penalties and interest. This experience is not uncommon and reflects the practical challenges faced by families navigating estate settlement during a difficult time.

From the perspective of families, these layered requirements combined with emotional and personal circumstances can make EJS feel more tedious than initially expected. While the absence of court proceedings remains a clear advantage, the overall timeline of the settlement may still be affected by the need to gather the required documents, complete tax filings, and secure clearances. The delays at any stage may affect the next steps, making timing and coordination an important part of the process.

The government passed several estate tax amnesty measures, with the most recent ending on June 14, 2025. These helped to ease the burden of long-standing unpaid estate taxes for families of decedents, especially those from earlier years. Today, legislators are once again discussing potential amnesty and other reforms, reflecting their continued recognition of the practical realities faced by families in settling estates. While these are still under deliberation, families must manage estate settlement based on existing rules and procedures.

In sum, extrajudicial settlement remains a valuable and legally recognized option for settling estates in the Philippines. At the same time, its effectiveness in practice largely depends on how well heirs or their representatives understand and manage the surrounding tax and legal requirements while coping with personal loss. A clearer appreciation of these realities may help set more realistic expectations and encourage informed decision-making during what is frequently a sensitive and challenging period. 

Source: Business World

When Is a Regime of Complete Separation of Property Mandatory in Marriages?

In Philippine real estate practice, understanding the property regime between spouses is crucial. Whether you are buying, selling, donating, or inheriting property, the applicable marital property regime determines who owns what, who must sign, and how property is transferred.

While many couples assume that property is always shared, there are situations where the law requires a regime of complete separation of property—even if the spouses did not choose it.

This post explains when complete separation of property becomes mandatory, particularly under Philippine law, and why it matters in real estate transactions.

What Is Complete Separation of Property?

Under a complete separation of property regime, each spouse:

• Owns, administers, and disposes of their own property independently

• Is solely responsible for their own debts (with limited exceptions)

• Does not need the other spouse’s consent to sell or mortgage property they exclusively own

This is the opposite of the default regime in the Philippines, where most marriages fall under absolute community of property unless a prenuptial agreement provides otherwise.

When Is Complete Separation of Property Mandatory?

There are specific situations under the Family Code where the law itself requires a regime of complete separation of property.

1. When a Marriage Is Judicially Separated

A court may order judicial separation of property when:

• One spouse abandons the other

• One spouse fails to comply with marital obligations

• There is abuse of property administration

• A spouse becomes incapacitated to manage property

Once granted, the court dissolves the existing property regime and replaces it with complete separation of property.

For real estate:

• Each spouse becomes the sole owner of their allocated share

• Future acquisitions belong only to the acquiring spouse

2. When a Marriage Settlement Is Declared Void

If a prenuptial agreement or marriage settlement is declared void, and the law cannot apply the default community regime, the court may impose complete separation of property to protect both spouses and creditors.

This sometimes arises when:

• A marriage settlement violates legal requirements

• There is fraud or coercion

• Property rights become impossible to administer jointly

3. When Spouses Are Legally Separated

In cases of legal separation, the marriage bond remains, but the law dissolves the property regime.

The result:➡️ A mandatory complete separation of property

From that point forward:

• Each spouse manages their own assets

• New real estate purchases are not co-owned

4. When a Foreign Spouse Is Involved and the Law Requires Separation

In certain mixed-nationality marriages, conflict-of-law rules or foreign property restrictions can result in practical or legal separation of property.

For example:

• A foreign spouse generally cannot own land in the Philippines

• Property may be registered solely in the Filipino spouse’s name

• Courts may treat ownership as separate to comply with constitutional limits

This is especially relevant in real estate transactions involving foreign nationals.

5. When the Court Orders Separation to Protect Creditors

Courts may also impose complete separation of property to protect:

• Creditors

• Heirs

• A spouse from financial abuse

If one spouse incurs excessive debt or mismanages community assets, the court can order separation to prevent further damage.

Why This Matters in Real Estate Transactions

If complete separation of property is mandatory or has been ordered:

You do NOT always need both spouses to sign

• Only the owner-spouse signs for their property

Titles and tax declarations must be checked carefully

• Ownership may already be partitioned

Buyers must verify the property regime

• Ask for court orders or marriage settlements

• Confirm whether separation has been declared

Failure to verify can lead to:

• Invalid sales

• Title disputes

• Claims from the other spouse

Key Documents to Look For

Real estate practitioners should request:

• Marriage certificate

• Prenuptial agreement (if any)

• Court order of judicial separation of property

• Decision on legal separation

• Property partition documents

A regime of complete separation of property is not always optional. In several situations under Philippine law, it becomes mandatory by court order or by operation of law.

For real estate professionals, buyers, and sellers, confirming the marital property regime is not just a legal formality—it is essential for ensuring that a property transfer is valid and enforceable.

When in doubt, always consult a property lawyer or review the applicable provisions of the Family Code and relevant jurisprudence from the Supreme Court of the Philippines before proceeding with a transaction.

Source: Ziggurat Real Estate

Women go solo as they climb the property ladder

Mortgage lenders are noticing the new trend among those buying alone as the gender pay gap narrows

On Buckingham Street, just off the Strand in London, an elegant Georgian townhouse with a storied past is on sale for £3.25 million. Its blue plaque marks it as the former headquarters of the Women’s Social and Political Union and the place where the suffragette Emmeline Pankhurst once stood at an upstairs window, addressing the crowd below. “We are here, not because we are law-breakers. We are here in our efforts to become law-makers,” she declared, her voice carrying down to the River Thames.

Pankhurst was speaking to a crowd of women who would not have been able to get a mortgage to buy the house she was speaking from, no matter how much they earned. In Edwardian Britain, women were barred from taking out a mortgage or any form of credit without a male guarantor.

It would be another 60 years before that changed. This year marks the 50th anniversary of the Sex Discrimination Act 1975, the landmark law that outlawed discrimination in employment, credit and services on the grounds of sex or marital status.

For the first time, women could open bank accounts, apply for loans and take out mortgages in their own names. “The change in women being able to have access to a mortgage in their own name is within my lifetime,” says Helen Pankhurst, great-granddaughter of Emmeline and convenor of the women’s rights campaign group Centenary Action. “And we know women still struggle with the motherhood penalty, the gender pay gap, and the pension gap.

Charting a century of progress, from suffragettes to independent homeowners  

Something so fundamental as financial independence took decades to achieve, and it reminds us that the fight for equality is far from over.” Half a century later, the evidence of that hard-won independence is no longer written on placards, but on property deeds. Skipton Building Society processed 11.5 per cent more solo female mortgage applications than applications from single men in 2024.

Skipton also found that 37 per cent of women planning to buy a first home intend to do so alone, compared with 35 per cent who plan to buy with a partner. The proportion of female-only mortgage applicants has risen from 36 per cent in 2020 to 41 per cent last year, according to the broker Mojo Mortgages.

The numbers show that more and more women would prefer to buy on their own terms than wait until they are coupled up.  ‘I need to support myself’ For Jess Pursey, 33, a customer operations manager, that resolve took root this spring when she bought a 40 per cent share of a new house at Dorchester Living’s Heyford Park development near Bicester, Oxfordshire. Her share cost £162,000 of the £405,000 full market value, and she put down a £16,200 deposit through the part-buy, part-rent shared-ownership scheme. She finally felt she had “space to breathe”, she says, and a garden for her cats, George and Winnie. “It’s challenging to buy a home on a single income,” she says, “but it’s all about adjusting your lifestyle. It was important for me to lay these foundations for the future because nothing in life is guaranteed. I might be single for the rest of my life, or I might be the breadwinner even if I did meet a partner.

Relationships and marriages don’t always work out, but that house will always be mine.” Pursey’s determination to buy alone was shaped by experience. “The house I bought with my ex-partner was in both our names, and we split the mortgage 50/50, but he paid the deposit and always said it was his house. You don’t forget things like that,” she says. After their split, she moved in with her father to save rather than rent, determined that the next time she bought, it would be on her own terms.  “There’s a lot of propaganda suggesting women should prioritize finding a partner over their careers,” she says. “But I refuse to settle, and in the meantime, I still need to support myself.

While I could live at home, at nearly 34 that wasn’t what I wanted for myself. “I prefer to budget monthly so I can return to a home filled with my belongings, a place I’m proud of. I may not have children, but I have pets to care for, and they help make my house a home.” ‘Owning a flat in London is a dream’ For Fionnuala Carr, 31, buying her own home was about finding stability after years spent navigating London’s volatile rental market.

Carr works as a data analyst in Canary Wharf, east London, and in March bought a two-bedroom, two bathroom flat at Springfield Place, a Barratt London development in Wandsworth, south London, for about £600,000. She saved £60,000 on her own over four years for her 10 per cent deposit. “Owning a flat in London is a dream, and I knew it would be a good investment,” she says. “You get better value for money in London than in Dublin.”

She had been renting with three other women in Balham, southwest London, her rent almost as high as her mortgage, but saw that many of her female friends were starting to buy on their own. This gave her the courage to approach a financial adviser to see whether she could do it too. “He said there was never a good time to buy, which scared me, but he also said there’s never a good time to sell either. If it’s right for you and you can afford it, go for it,” she says.

Not ready to live entirely on her own, she looked for a two-bedroom, two bathroom property so she could shelter a friend from the stormy rental market to help her pay for the mortgage. She says, “I’m not under pressure, wondering if the landlord will sell or if we’ll be asked to move. I can decorate as I want and choose who I live with. I remember a friend complaining about her housemates not putting out the bins, and I just can’t deal with that any more.” ‘

Shared ownership was my best option’ For Victoria Broomham, 32, affordability was the hurdle. When she and her partner separated, she sold their jointly owned house in Maidstone, Kent, for £272,000, using £15,000 of equity as a deposit to buy a 48 per cent share of a one-bedroom apartment at David Wilson Homes’ The Poppies development, also in Maidstone, in May this year. “I spoke to a mortgage adviser who told me it would be impossible for me to buy outright,” she says. “If I didn’t want to rent, shared ownership was my only option.”

She now pays £652 a month for mortgage and rent, plus about £140 on energy bills, and has stayed close to her job as a pharmacy technician at Maidstone Hospital. “It wasn’t like I was moving out on my own; I still had Buddy (her miniature dachshund) with me, so I’d have to find somewhere where I could rent with him,” she says, “but I wanted to stay on the property ladder if I could. “For the first time, everything is solely on me.

There are moments, like finding a really big spider, that make me wish I lived with someone else, but mostly I absolutely love it.” ‘I crave independence’ If Broomham’s story illustrates how shared ownership keeps women on the ladder, Georgia McGregor’s experience shows the persistence it takes to climb onto it.

The 29-year-old insurance underwriter is still searching for a one or two-bedroom flat in southwest London. She has lived with family to save and, with an inheritance from  her grandparents, has a larger budget than she expected. “I was surprised by how much I could borrow,” she says. “But it feels as if I’m being dismissed, with the assumption that I’m not a serious buyer.

Some [estate] agencies don’t seem to genuinely listen to my requirements.” She has been outbid on five properties and describes the process as demoralizing, yet remains undeterred. “Buying your own place gives you independence, and that’s what I’m craving,” she says. “I haven’t got a partner at the moment and I don’t want to wait. If I buy by myself, my security is on me and I’m not dependent on someone else for somewhere to live.”

McGregor has seen friends caught in break-ups that turned property into a battleground. “Some of my friends bought with partners and their relationships ended, which led to messy arguments over who gets what,” she says. “Others bought with friends, made clear agreements and now they’re using that equity to buy individually.”

She also plans to take a lodger for extra financial breathing space once she finds the right home. Fifty years ago, a single woman applying for a mortgage might have been asked for her husband’s permission or have been required to bring a male guarantor.

Today, lenders are actively courting female buyers, and developers are tailoring homes with second bedrooms suitable for lodgers, secure entry systems and shared amenities such as co-working spaces, residents’ lounges and gyms that appeal to solo occupants. Back on London’s Buckingham Street, the townhouse where Pankhurst made her stand has been modernized with a vaulted kitchen, marble bathrooms and a small terrace overlooking Whitehall Gardens.

Grant Bates, the selling agent, says the property’s history adds to its allure. “It’s a house of significance,” he says. “It was a place of activism, and now it’s ready for a new chapter.” A century ago, the suffragettes rallied under the slogan “Deeds, not words”. For this new generation of women, those deeds come with a mortgage offer attached.

Source: The Times