Planning before and beyond the grave

(Conclusion)

What is collation? It is the process of adding the value of thing donated to the net value of hereditary estate.

To collate is to bring back or return to the hereditary mass, in fact or fiction, property which came from the estate of the decedent, during his lifetime, but which the law considers as an advance from the inheritance.

Collation is applicable to both donations to compulsory heirs and donations to strangers. It is thus clear that a testator may not give all of his properties to his favored child in the hope that when he dies, his distributable estate will be diminished to the prejudice of the other compulsory heir.

As a general rule, the compulsory heirs are obliged to collate except: (a) when testator should have so expressly provided; and (b) when compulsory heir repudiates his inheritance.

What are the properties that are required to be collated? These include (a) any property/right received by gratuitous title during testator’s lifetime; (b) all that may have been received from decedent during his lifetime; and (c) all that their parents have brought to collation if alive.

Meanwhile, the following are not subject to collation: (1) expenses for support, education (elementary and secondary only), medical attendance, even in extraordinary illness, apprenticeship, ordinary equipment or customary gifts; (2) expenses incurred by parents in giving their children; (3) professional, vocational, or other career unless the parents so provide, or unless they impair the legitime; and (4) wedding gifts by parents and ascendants consisting of jewelry, clothing and outfit except when they exceed 1/10 of the sum disposable by will.

It is worthwhile to note that only the value of the thing donated shall be brought to collation. This value must be the value of the thing at the time of the donation.

Net hereditary estate

Who are the beneficiaries of the net hereditary estate?

These include the heir who is a person called to succeed either by will (a testamentary heir) or by law (an intestate heir); entitled to a fractional part of the hereditary estate—not to any specific property; recipient of a gift of value—a gift measured in terms of value of the net hereditary estate; properties that may eventually comprise his entitlement are determined in the partition.

The legatee who is a person designated by the testator to receive a gift of specific movable property, thereby creating a presumption that the testator gave him a preferential right to a specific movable property. The devisee is a person designated by the testator to receive a gift of specific immovable property, thereby creating a presumption that the testator gave him a preferential right to that specific immovable property.

Compulsory heirs

Who are the compulsory heirs? They are the legitimate children and legitimate descendants, with respect to their legitimate parents and legitimate ascendants; (An adopted child is a compulsory heir of both his/her biological and adopting parents) in default of the foregoing, the legitimate parents and legitimate ascendants, with respect to their legitimate children and legitimate descendants; surviving spouse; and illegitimate children (with respect to their illegitimate parents).

A compulsory heir may be barred from participating in the estate of the deceased. In case of testamentary succession, the heir can be disinherited. Disinheritance total exclusion of a compulsory heir from the hereditary estate (including the deprivation of the legitime) for causes provided by law.

Valid disinheritance

For the disinheritance to be valid: (a) the disinherited compulsory heir is clearly identified; (b) must be express; there is no implied disinheritance; (c) the cause must be a ground specified by law; (d) the cause must be both true and certain (not speculative); (e) it must be stated in the will; and (f) proved, if contested by the disinherited heir.

The disinheritance must be total. There is no such thing as partial disinheritance. Most importantly, the will must be admitted to probate. Disinheritance is considered a testamentary disposition.

Intestate succession occurs when (a) If a person dies without a will, or with a void will, or one which has subsequently lost its validity; (b) When the will does not institute an heir to, or dispose of all the property belonging to the testator. In such case, legal succession shall take place only with respect to the property of which the testator has not disposed; (c) If the suspensive condition attached to the institution of heir does not happen or is not fulfilled, or if the heir dies before the testator, or repudiates the inheritance, there being no substitution, and no right of accretion takes place; (d) When the heir instituted is incapable of succeeding, except in cases provided in the Code.

According to our High Court, there nothing more sad and tedious when relatives bicker over inheritance—when the differences could have been amicably settled and harmony prevail among relatives.

The best thing you can give your loved ones is not wealth, but more importantly a memory of love and peace when you have crossed the great beyond.

Sources:

The laws on donation and succession, Civil Code of the Philippiines: Jurisprudence: Heirs of Reyes vs. Calumpang, G.R. No. 138463, October 30, 2006; Ramirez vs. Baltazar, No. L-25049, 30 August 1968, 24 SCRA 918.), Puno vs. Puno Enterprises, Inc., G.R. No. 177066, 11 September 2009, 599 SCRA 585; Vda. de Gil vs. vda. de Murciano, No. L-3362, March 1951, 88 Phil 260, 269; Salvador vs. Sta. Maria, No. L- 25952, 30 June 1967, 20 SCRA 603; Dizon-Rivera vs. Dizon, No. L-24561, 30 June 1970, 33 SCRA 554; Heirs of Sandejas vs. Lina, G.R. No. 141634, 5 February 2001, 351 SCRA 183; Blas vs. Santos, No. L-14070, 29 March 1861, 1 SCRA 899; Uson vs. del Rosario, No. L-4693, 29 January 1953, 92 Phil 530.

Special thanks to Professor Avelino V. Sebastian for his notes and book entitled Wills and Succession.

Online articles: Manulife

The Philippine Estate Planning Primer. Lawyers in the Philippines.

The author is Dean, College of Law at Lyceum of the Philippines University; Chairman of Philippine Association of Law Schools; and Founder of Mawis Law Office