I have a question on inheritance. My husband and I were married in 1980. We have two children. While we are still alive as their parents, can we give our pieces of property to our two children as their inheritance? How are we going to this?
There is no law that prohibits you from giving your pieces of property to your children while you are still alive. We may not call the transfer in the strict sense of the word as inheritance, in view of the provisions of the law on succession that the rights to succession are transmitted only at the time of the death of the decedent.
The relevant provisions of the Civil Code of the Philippines as to succession are as follows:
“Art. 774. Succession is a mode of acquisition by virtue of which the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another or others either by his will or by operation of law.
Art. 777. The rights to the succession are transmitted from the moment of the death of the decedent.”
From the foregoing provisions, it is clear that the rights of a person to succeed to the assets of his predecessors commenced from the time of the death of such predecessor. In your case, the rights of your two children to their inheritance from you will commence from the time of your death and that of your husband.
In yet another provision of the law, one of the modes of acquisition of a property is by way of a donation. The appropriate provisions of the Civil Code are as follows:
“Art. 725. Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another, who accepts it.
Art. 750. The donations may comprehend all the present property of the donor, or part thereof, provided he reserves, in full ownership or in usufruct, sufficient means for the support of himself, and of all relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by the donor. Without such reservation, the donation shall be reduced in petition of any person affected.”
Thus, gleaning from these provisions of the law, you can validly dispose of or transfer the title to your pieces of property from your names to that of your two children in your lifetime through donation. Provided that the donee (your two children) will accept the donation.
In giving donations, you are, however, liable to pay the required and the necessary gift tax or the donor’s tax under the law. Section 98 of the National Internal Revenue Code (NIRC) provides that there shall be levied, assessed, collected and paid upon the transfer by any person, resident or non-resident, of the property by gift, a tax computed as provided in Section 99. The gift tax is a tax on the privilege of transmitting one’s property or property rights to another or others without adequate and full valuable consideration (Vitug and Acosta, Tax Law and Jurisprudence 2006 Edition, page 225). The tax is computed depending on the fair market value of the property subject of the donation. If, however, the fair market value of the property does not exceed P100, 000.00 and such is the only donation made in a calendar year, the same is not subject to any donor’s tax (Section 99, NIRC).
After paying the necessary gift or donor’ tax, then you can proceed to have the Deed of Donation registered with the appropriate Register of Deeds in order to commence the transfer of the title to the property to the names of your two children.
We hope that we were able to answer your queries. Please be reminded that our opinion is based solely on your narration of facts and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
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