Ownership is the exclusive right of possessing, enjoying SUCCESSION

and disposing of a property. succession is a mode of acquisition by virtue of which the

property, rights and obligations to the extent of the value of
Ownership is acquired by occupation and by intellectual the inheritance, of a person are transmitted through his
creation. Ownership and other real rights over property are death to another or others either by his will or by operation
acquired and transmitted by law, by donation, of law. The rights to the succession are transmitted from the
moment of death of the decedent.
CONCEPT AND NATURE OF TRANSFER TAXES
Kinds of Succession
Two of the five modes of acquiring ownership as enumerated
in the Civil Code are succession and donation. In succession, 1. Testamentary or testate is that which results from the
estate tax is levied on the transmission of property from a designation of an heir, made in a will executed in the form
prior decedent to his heirs. Estate encompasses the totality prescribed by law.
of assets and liabilities a decedent owns at the time of his
death. In donation, donor's tax is imposed as ownership of 2. Legal or intestate - is that effected by operation of law
the property passes from the donor to the donee. since the decedent did notexecute a will.

Estate tax and donor's tax are the two transfer taxes under 3. Mixed - is that effected partly by will and partly by
our laws. Transfer taxes are taxes imposed upon the operation of law.
gratuitous disposition of private property. A transfer is said
to be gratuitous when there is no consideration for the
transfer; it is onerous when a consideration is received. Executors and Administrators
Onerous transfers such as sale, barter or exchange are
subject to business taxes An executor is a person appointed by a testator to carry
out the directions and requests in his will, and to dispose of
Estate and donor's taxes are excise taxes. Both taxes are the property according to his testamentary provisions after
imposed upon the right of a person to transfer his property his death. An administrator is a person appointed by the
that may take effect during his lifetime or upon his death. court to administer the assets and liabilities of a decedent.
He is usually a relative of the decedent who has come
forward and applied for the position
TESTAMENTARY SUCCESSION

Probate of a will is the court procedure by which a will is

WILL.
proved to be valid or invalid. Generally, the probate process
involves collecting a decedent's estate, liquidating liabilities,
A person may make a legal declaration before his death
paying necessary taxes (e.g., estate tax), and distributing
regarding how he wants.his property transferred after his
property to heirs. These activities are carried out by the
death. This declaration is known as a will. If a person dies
executor or administrator of the estate, usually under the
leaving a will, the person is said to have died testate, a
supervision of the probate court or other court of
status known as testacy.
appropriate jurisdiction.

A will is an act whereby a person is permitted, with the

formalities prescribed by law, to control to a certain degree
the disposition of his estate to take effect after his death. Forms of Wills
The making of a will is a strictly personal act; it cannot be
left in whole or in part to the discretion of a third person, or The formalities required for a written witnessed will were
accomplished through the instrumentality of an agent or designed to limit fraud and abuse by making sure that each
attorney. will was an authentic declaration of its maker's desires.
Hence, every will must be in writing and executed in a
The testator may entrust to a third person the distribution of language or dialect known to the testator. Every will, other
specific property or sums of money that he may leave in than a holographic will, must be subscribed at the end
general to specified classes or causes, and also the thereof by the testator himself or by the testator's name
designation of the persons, institutions or establishments to written by some other person in his presence, and by his
which such property or sums of money are to be given or express direction, and attested and subscribed by three or
applied. more credible witnesses in the presence of the testator and
of one another.
A codicil is an instrument that amends (i.e., changes,
modifies, or supplements) the provisions of a will. A codicil A holographic will is a will written entirely by the testator
must be executed with the same formalities as a will, but is with his own hand and not witnessed or attested. A person
only required to have a provision or provisions amending a may execute a holographic will which must be entirely
will. written, dated, and signed by the hand of the testator
himself. It is subject to no other form, and may be made in institution of an heir, or such institution should not comprise
or out of the Philippines, and need not be witnessed. The the entire estate, and even though the person so instituted
testator's handwriting is deemed a sufficient assurance of should not accept the inheritance or should be incapacitated
the will's authenticity. to succeed. In such cases, the testamentary dispositions
made in accordance with law shall be complied with and the
remainder of the estate shall pass to the legal heirs.
Revocation of Wills and Testamentary Dispositions Legitime is that part of the testator's property which he
cannot dispose of because the law has reserved it for
A will may be revoked by the testator at any time before his certain heirs who are, therefore, called compulsory heirs.
death. Any waiver or restriction of this right is void. The rules on legitime safeguard the rights of the compulsory
heirs with respect to their legitimes. The following are
A revocation done outside the Philippines by a person who compulsory heirs:
does not have his domicile in this country, is valid when it is
done according to the law of the place where the will was 1. Legitimate children and descendants, with respect to their
made, or according to the law of the place in which the legitimate parents and ascendants;
testator had his domicile at the time; and if the revocation
takes place in this country, when it is in accordance with the 2. In default of the foregoing, legitimate parents and
provisions of the Civil Code. ascendants, with respect to their legitimate children and
descendants;
Subsequent will which do not revoke the previous ones in an
express manner, annul only such dispositions in the prior 3. The widow or widower;
wills as are inconsistent with or contrary to those contained
in the later wills. A revocation of a will based on a false 4. Acknowledged natural children, and natural children by
cause or an illegal cause is null and void. legal fiction;

Institution of Heir 5. Other illegitimate children.

Institution of an heir is an act by virtue of which a testator
designates in his will the person or persons who are to
succeed him in his property and transmissible rights and Disinheritance
obligations.
When a person expects or is expected to inherit, but does
A will shall be valid even though it should not contain an not, the person is said to be disinherited. A compulsory heir
may, in consequence of disinheritance, be deprived of his The gross estate of a decedent shall be comprised of
legitime, for causes expressly stated by law. Disinheritance properties and interests therein at the time of his/her death,
can be effected only through a will wherein the legal cause including revocable transfers and transfers for insufficient
therefor shall be specified. The burden of proving the truth consideration, etc. It also provides that amounts withdrawn
of the cause for disinheritance shall rest upon the other from the deposit accounts of a decedent subjected to the
heirs of the testator, if the disinherited heir should deny it. 6% final withholding tax imposed under Section 97 of the
NIRC, shall be excluded from the gross estate for purposes
of computing the estate tax (Sec. 4, Rev. Reg. 12-2018,
Right of Representation TRAIN).

Representation is a right created by fiction of law, by virtue

of which the representative is raised to the place and the
degree of the person represented and acquires the rights
which the latter would have if he were living or if he could
have inherited. The right of representation takes place in the
direct descending line, but never in the ascending, In the
previous illustration, if C dies ahead of A, C's daughter G and
son H may represent C to the succession when A dies.

Estate tax is the tax on the right to transmit property at

death and on certain transfers which are made by law the
equivalent of testamentary dispositions. It is not a tax on
the property, transferor or transferee. It is an excise tax or
privilege tax and its object is to tax the shifting of economic
benefits and enjoyment of property from the dead to the
living. The estate tax is generated by the laws in force at the
time of death notwithstanding the postponement of the
actual possession or enjoyment of the estate by the
beneficiary.

GROSS ESTATE