The Concept of Succession & Estate Tax Flashcards
Types of Succession
Testate or Testamentary Succession
Legal or Intestate Succession
Mixed Succession
Types of Will
Holographic Will
Notarial Will
Codicil Will
Nature of Succession
Gratuitous transmission of [net] property
Elements of Succession
Decedent
Estate
Heirs
Heirs under intestate succession
Compulsory heirs
Up to fifth degree of consanguinity
Republic of the Philippines
Types of Compulsory Heirs
Primary Heirs
Secondary Heirs
Concurring Heirs
Primary heirs
Legitimate children and their direct descendants
Secondary heirs
Legitimate/illegitimate parents and ascendants
Tertiary heirs
The surviving spouse and illegitimate descendants
Legitimate children
Those born out of a legal marriage
Direct descendants
Children, or in their absence, grandchildren
Legitimate parents
Biological parents
Illegitimate parents
Adopting parents of an adopted child
Surviving spouse
Widow or widower of the decedent
Illegitimate descendants
Illegitimate children
Basic Intestate Partition Procedures
The decedent and the surviving spouse shall first share in their common properties
Determination of the decedent’s net interest
Partition of the decedent’s net interest to the heirs
Decedent’s Net Interest
Exclusive property of the decedent
+ Share in the net common properties
Partition of the Decedent’s Net Interest to the Heirs
Surviving Spouse
Legitimate Children*
Illegitimate Children*
*Or, in their default, Parents
Share of surviving spouse
1.0
Share of each legitimate child
1.0
Share of each illegitimate child
0.5
Share of each legitimate parent (in the absence of adoptive parents)
1.0
Share of each legitimate parent (in the presence of adoptive parents)
0.5
Share of each illegitimate parent
0.5
Heirs under Testamentary Disposition
Compulsory heirs
Other persons specified by the decedent in his will
Legatee
Receiver, by virtue of a will, of gifts of personal property
Devisee
Receiver, by virtue of a will, of gifts of real property
Executors
A person, named by the decedent, who shall carry out the provisions of their will
Administrators
A person appointed by the court to manage the distribution of the estate of the decedent
Nature of Estate Tax
Excise tax Revenue or general tax Ad valorem tax National tax Proportional tax One-time tax
Resident or Citizen Decedents are taxable…
On properties located within or outside the Philippines
Non-Resident Alien Decedents are taxable…
Only on properties located in the Philippines
Exception: reciprocity rule
The Estate Tax Model
Gross estate
Less: Deductions from gross estate
= Net taxable estate
