Philippine Inheritance Laws for Foreigners, Filipinos and Dual Citizens

by | Feb 7, 2019 | Estate Law, Wills & Inheritance

If you have inherited Philippine property, then you may want to know what Philippine inheritance laws are applicable in your situation.

A person who fully understands the considerations involved when a foreign element is involved.

When a foreigner has a Philippine inheritance, certain considerations apply.

Some common situations are:

  • You are/became a US citizen and inherited from Filipino parents/relatives who passed away in the Philippines
  • You are a Filipino who inherited from former Filipinos/foreigners who passed away abroad
  • You are a Filipino who inherited from Filipinos

If this describes you, below are the legal and practical considerations that you need to consider before claiming your inheritance. For a step by step discussion on what you need to claim your inheritance when there is no will, then go to: How to transfer land title to heirs in the Philippines (Extrajudicial Settlement).

First read this

  The discussion below clarifies the most important considerations when dealing with Philippine inheritances.

Picture showing a will and property that is left by the deceased in favor of an heir

Family facts, citizenship, wills and the property location – all these details are needed to assess what should be done.

But in general, what you need to know is this:

  • If the deceased is a foreigner, then his laws apply to the inheritance. So, if he is from the US, then US law will apply. However, if the property is in the Philippines, you will need to work with the courts and other Philippine government organizations to distribute the estate.
  • If the deceased is Filipino, then Philippine laws on wills and compulsory heirs must be obeyed (this is for both estates with wills and estates without wills).
  • If there is a will, you will need a copy and it should follow the deceased’s national law on wills.

    A picture of an heir in possession of a will left by the deceased

    Wills must be validated through a court case called probate before the property can be distributed.

  • If there is a will, it will have to be brought to court.
  • If the heirs are foreigners, they cannot receive Philippine land inheritances through a will. They can inherit Philippine land if there is no will.
  • You will need to gather documents proving the ownership of the property/stock. If the property/stock is in someone else’s (i.e. grandfather’s, uncle’s) name, then that estate must first be settled.

These main points are further discussed below. There can be complications based on your particular situation, so I have written in detail about each of these items to address common issues that frequently occur.

No 1 – How does the deceased’s citizenship affect inheritance?

The deceased’s citizenship determines what inheritance laws will be followed.

  • If the deceased is foreign, then the foreign inheritance laws will dictate how the will is to be probated and who the heirs are. The foreigner’s Philippine properties can be transferred to the new heirs following Philippine probate in cases where there is a will.
  • If the deceased is a Filipino/dual citizen, then Philippine inheritance laws on wills, compulsory heirs and other inheritance matters will apply.

    A picture showing different citizenships and the different ways that they affect citizenship.

    The citizenship of the deceased dictates which national laws apply

What are some of the most significant Philippine inheritance laws? Those that deal with wills and compulsory heirs. If you have inherited from a Filipino/dual citizen, then the estate must comply with applicable rules below: First, there are rules about the form of the will. A holographic will must be written in the estate owner’s hand and must be dated and signed by him. A notarial will be signed by 3 witnesses in the presence of the testator. In addition, it must be notarized and comply with a whole list of requirements.

A will beigns signed by three different persons.

A notarial will must be signed by at least three witnesses.

Read More: For more information on wills, please read this post. Second, a will must comply with the laws on compulsory heirs. Philippine law defines the heirs and the amount they receive, even if there is a will. The will can be overturned or challenged if the rights of these heirs are not respected. The order in which the heirs are prioritized are:

The picture shows compulsory Philippine heirs who will inherit under Philippine law and their inheritance.

Compulsory heirs are determined by law.

  1. Legitimate children and descendants (grandchildren, great-grandchildren)
  2. If there are no legitimate children or descendants, legitimate parents and ascendants of legitimate children and descendants
  3. Surviving legal spouse
  4. Illegitimate children

Now, you might wonder exactly who receives what amount. I’ve written a comprehensive guide here, which can be used to look up your situation.

No 2 – If there is a will, you will need a copy

A picture of a heir presenting a copy of the will.

You’ll need a copy of the will to start.

If you inherit through a will, you will need a copy of the will to be able to start. Clients have asked me how to find the will. There are a few possibilities.

  • You can go to court and request the court to compel that the will be brought to you. However, this is very tough to enforce and is not suggested.
  • You can discover the contents if you are informed in the course of probate proceedings.

In general, it is very difficult to discover the contents of a will that is lost or withheld from you. However, it is important to find the document or to encourage the person holding it to turn it over to the family. The will is a primary and very important document, so all effort must be made to find it.

No 3 – If there is a will, you will need to go through probate

When there is a will, laws usually require that it is brought to court in a process called “probate”. Probate means that the will goes to court for the courts to determine if the will is valid and to enforce the will. Probate is a usually a requirement for transferring the property to another’s name. In the Philippines, the final court decision of the probate case is sent to the BIR.

A picture of a court procedure where the will is subject of the hearing.

Probate is requried to enforce the will created by the deceased.

The BIR will process the estate and release a Certificate Authorizing Registration so that the property can then be transferred.

  • If the deceased is foreign, the will can be probated abroad and then reprobated in the Philippines. It is reprobated in the Philippines so that it can be used to transfer Philippine property to the heirs. It can also be probated here directly and does not need to go to be probated abroad first.
  • If the deceased is Filipino/dual citizen, then the will should be probated in the city or municipality where the deceased resides at the time of his death or where the property is located if he lived in a foreign country.

    The property title can only be transferred to a new owner after the probate case.

    The BIR will issue a certificate based on the order allowing probate.

No 4 – How does the citizenship of the heirs affect inheritance?

All too often, a foreigner or former Filipino citizen will make a will bequeathing land to one of their children. However — A foreigner cannot inherit Philippine land through a will. A foreigner can only inherit Philippine land when there is no will.

A picture showing different nationalities and emphasizing foreign inheritance of land only if there is no will.

The foreigner inherits Philippine property if there is no will.

This is an absolute rule – there are no exceptions. As such, the properties and assets that can be inherited when there is a will must comply with this requirement for it to be enforceable. All other types of assets can be inherited by a foreigner however so condominium units, stocks and other types of assets can be disposed of in a will.

No 5 – What asset documents will you need?

Aside from the death certificate, documents relating to the assets are most needed. But very often, heirs don’t have the documents for these assets. The documents are required for any inheritance because you have to prove that the deceased owned the asset before anything can be distributed to the heirs. If property is involved, the heirs must have the owner’s duplicate certificate of title. If the Original Owner’s Title is missing, then the heirs must go to court to have the owner’s duplicate Certificate of Title re-issued to them. A photocopy of the Owner’s Title or the tax assessment can help support the ownership claim but only the Owner’s Title will allow transfer of the title to the heirs. If stocks are involved, the heirs must have the stock certificate. If it is missing, the company may be able to restore it to you if requested.

A picture of several documents to prove the ownership of the deceased over the properties

You’ll need lots of documents!

Although it is possible to replace the documents if they are missing with the help of a professional, it is time consuming and takes some effort. It is far better to search for the documents you need than to try to replace it.

No 6 – What happens when the owner listed on the Title/Stock Certificate is not the deceased?

Say your father passed away and you and your sister inherited Philippine property from him. The property is your father’s rightful share from the estate of your grandfather but was never transferred to your father. The title is still in the name of your grandfather. For it to be transferred to you and your sister’s names, you’ll have to go through the following:

  • the estate taxes on your grandfather’s estate must be paid
  • the heirs of your grandfather have to sign a document called an extrajudicial settlement agreeing to the allocation of the property to you and your sister.

    A picture of two sisters settling the estate

    To transfer property to new heirs, the estate of the title owners must be settled.

This requires that all of the heirs of your grandfather agree and are willing to state that in writing. This also requires that outstanding estate taxes be paid. Usually, if estate taxes are not settled in a few years, the fees can balloon and be worth as much as the property itself. There is an upcoming estate tax amnesty that can help in this situation. Even if estate taxes were not paid for many years, this amnesty reduces estate taxes to 6% on the total net estate. This removes all penalties and makes the transfer much cheaper. It is also possible to negotiate with the BIR for some situations and explain the problem.

No 7 – Now what do I do?

You’ll see from above that the most important considerations are citizenship and documentation.

A picture showing the important considerations of citizenship and existing documentation that must be considered in settling an estate.

You’ll need to understand Citizenship and what property documents exist.

  • The national inheritance laws of the deceased apply. So, if the deceased is a German, then the inheritance law to follow is German. However, if the property is in the Philippines, some work may need to be done with the Philippine courts or other government bodies.
  • If the deceased was Filipino, then the Philippine national laws regarding wills and compulsory heirs which must be followed.
  • Wills must be probated in court for them to be enforced.
  • Documents such as the will, Owner’s Title, Stock Certificates have to be gathered.

So, if you are considering trying to get the inheritance, it is first best to gather the documents you’ll need such as the will, the Owner’s Title, the stock certificates and death certificate. These can then be submitted to a lawyer/accountant to start the process of settling the estate.

2 Comments

  1. Maria

    My auntie(sister of my father) and her husband both US citizen ,died in the Philipines and left 1 house and lot and 2 land titles in the Philippines with no compulsary heir. My aunt was survived by her sister and nephews and nieces. My auntie left a last will and testament to my US citizen cousin and the will had been probated. Can a US citizen inherit a property through last will and testament? If not, what can the family do so the the properties of my auntie and uncle can be saved?

    Reply
    • Atty. Francesco Britancio

      Sent an email.

      Reply

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