Philippine Inheritance Laws for Foreigners, Filipinos and Dual Citizens
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
- No 1 – How does the deceased’s citizenship affect inheritance?
- No 2 – If there is a will, you will need a copy
- No 3 – If there is a will, you will need to go through probate
- No 4 – How does the citizenship of the heirs affect inheritance?
- No 5 – What asset documents will you need?
- No 6 – What happens when the owner listed on the Title/Stock Certificate is not the deceased?
- No 7 – Now what do I do?
First read this
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.
- 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?
- 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.
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.
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:
- Legitimate children and descendants (grandchildren, great-grandchildren)
- If there are no legitimate children or descendants, legitimate parents and ascendants of legitimate children and descendants
- Surviving legal spouse
- 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
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
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.
No 4 – How does the citizenship of the heirs affect inheritance?
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?
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?
- 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.
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?
- 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.