My grandmother died a year ago, and my cousins and I have agreed to transfer the properties she left to our name. She died without a will, and we are her only heirs. We have already agreed to be the co-owners of the properties. My question is, how should we go about transferring the properties to our names? Someone mentioned that we have to pay taxes before this can be successfully transferred. Is this true? If yes, how much? Thank you!
Since you and your cousins are the only heirs of your grandmother, and you are all in agreement to transfer her properties to your name, you may file an extrajudicial settlement by agreement between heirs under Section 1, Rule 74 of the Rules of Court.
The provision states that if the decedent left no will and no debts and the heirs are all of age or the minors are duly represented, the parties may divide the estate among themselves and transfer the properties to their name by issuing a public instrument to be filed with the register of deeds. This public instrument is called an Extrajudicial Settlement of Estate.
As mentioned, the extrajudicial settlement shall be filed in the register of deeds where the properties may be found. In addition, a bond shall be given to the register of deeds in an amount equivalent to the value of the personal property involved, if there are personal properties left by your grandmother, as certified under oath by the parties concerned and conditioned upon the payment of any just claim on the estate of your grandmother.
This fact of extrajudicial settlement must be published in a newspaper of general circulation.
In addition to this procedure, you will also be required to pay estate tax upon transfer of the properties. According to Section 90 of the National Internal Revenue Code (NIRC), an estate tax return shall be required before a registered or registrable property such as real property, motor vehicle, shares of stock, or other similar property, may be transferred to the heirs.
The value of the tax will be based on the fair market value of the property at the time of your grandmother’s death (Section 88B, NIRC). The estate tax return must have been filed within six (6) months from your grandmother’s death with an authorized agent bank, Revenue District Officer, Collection Officer, or duly authorized treasurer of the city or municipality where your grandmother was domiciled at the time of her death (Section 90, A to D, NIRC). The estate tax must be paid at the time the return is filed. You may seek for an extension of time to pay with the Bureau of Internal Revenue (BIR). For further information on this, you may consult the nearest BIR office nearest you.
Again, we find it necessary to mention that this opinion is solely based on the facts you have narrated and our appreciation of the same. The opinion may vary when the facts are changed or elaborated.
We hope that we were able to enlighten you on the matter.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to email@example.com