Estate settlement: A primer

(Conclusion)

Whenever the gross value of the estate of the decedent or deceased person, whether he died testate or intestate, does not exceed P10,000, and upon compliance with the notice and hearing requirements under the pertinent provision of the Rules of Court, the court may proceed, summarily and without delay, to grant the allowance of the will, if any; determine the persons legally entitled to participate in the estate; apportion and divide it among them after payment of the debts due to the estate.

Thereafter, these persons, in their own right, or by their legally appointed and qualified guardians or trustees, if otherwise, shall be entitled to receive possess portions of the estate so awarded to them. Likewise, the court’s order of partition or award of real property, if any, shall be recorded in the proper registrar’s office.

If it shall appear at any time within two years after the summary settlement and distribution of the estate that, among others, an heir or other person has been unduly deprived of his lawful participation therein, he may compel the settlement of the estate in the proper court in accordance with the relevant provisions of the Rules of Court.

If the decedent executed a will, and his estate may not be summarily settled and distributed among his heirs, then the will must be proved before, and allowed by the proper court. Thereafter, the court shall issue letters testamentary thereon to the person named as executor therein, if he is competent, accepts the trust, and gives the necessary bond.

Insofar as the payment of debts and other expenses against the estate is concerned, upon application by the administrator or executor, and on written notice to the heirs and other interested persons, the court may order the whole or a part of the decedent’s personal estate to be sold if it would appear necessary.

When, among others, the personal estate is insufficient to pay the debts and other expenses, or where its sale may injure the business or other interests of those interested in the estate, the court may, upon such application and notice, authorize the administrator or executor to sell, mortgage or otherwise encumber so much as may be necessary of the real estate, in lieu of personal estate, for the purpose of payment of the debts and other expenses. Moreover, the sale, mortgage or other encumbrance should clearly appear to be beneficial to the persons interested in the estate.

If a partial sale, mortgage or other encumbrance of the real estate would injure those interested in the remainder, the authority may be for the sale, mortgage or other encumbrance of the entire real estate, or so much thereof as is necessary or beneficial under the circumstances.

Any such interested person may prevent the sale, mortgage or other encumbrance of the real or personal estate by posting bond in a sum to be fixed by the court, conditioned to pay the debts and other expenses within the court-prescribed period. Moreover, the bond shall be for the security of the creditors, as well as of the administrator or executor, and may be prosecuted for the benefit of either.

Meanwhile, the court may, upon application and notice to interested persons, authorize the sale, mortgage or other encumbrance of the whole or a part of the real estate if it would be beneficial to said persons, even if not necessary to pay the debts and other expenses of the estate. But, this authority shall not be granted if it would be inconsistent with the provisions of the will. In case of such encumbrance, the proceeds shall be assigned to the persons entitled to the estate in the proper proportions.

Moreover, the court may grant this authority if it would appear from the records and proceedings of a probate court in another country that the estate of the decedent therein is insufficient to pay the debts and other expenses there. The sale, mortgage or other encumbrance of the real estate shall be in the same manner as for the payment of the debts and other expenses in the Philippines.

Upon application, the court may authorize the administrator or executor to convey real property pursuant to a contract that the decedent may have entered during his lifetime, or with such modifications as are agreed upon by the parties and approved by the court. If the contract would seek to convey the property to the administrator or executor, the clerk of court shall execute it.

Meanwhile, if the decedent in his lifetime held real property in trust for another person, the court may, after notice, authorize the administrator or executor to deed such property to that person, or his administrator or executor, for whose use and benefit it was so held. Thus, the court may order the execution of such trust, whether created by deed or by law.

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