Where there’s a Will, there’s a Way (Part 2)

Published February 28, 2022, 12:05 AM

by Jaime Laya

WALA LANG

Last Will and Testament concept. Fountain pen, seal on desk

It’s depressing. So often in recent months, word arrives that a relative or a friend has passed away. Inevitably, this reminds me that I have to think about what I should do about the stuff—books, paintings, santos, papers, junk—that clutter my house. I know I can’t take them with me but I want them around while I’m still around.

In olden times, a Last Will and Testament was the way to go. Concluding with the admonition, “houag ninyong pagbasagan ng ulo,” the 1850s Huling Habilin of my wife’s great-great grandmother listed down who gets not only niogan and palayán but also candelero na may ualong ilaw and the tamborin, peineta, and other contents of her jewelry box down to the last alfiler. Even more detailed is the Will that the late scholar Martini I. Tinio, Jr. found in the National Archives. He was able to reconstruct virtually, a Doña’s Intramuros home from the plank-by-plank inventory that was in her Will.

Nowadays, people can’t leave their worldly goods  to anyone they wish. The Civil Code is rather precise about who should get what of whatever is not buried or cremated with the dearly departed. Surviving spouse, children both legitimate and illegitimate are compulsory heirs who are each entitled to a defined share or legitime, no ifs or buts. The mandated apportionments are different if the deceased leaves a Will and if he dies without.

Passing away without a Will

Let’s take the example of a husband with four legitimate children and none on the side who passes away without a Will, i.e., intestate. Let’s also assume that he has inherited properties and that he and his wife acquired assets in the course of their marriage. The latter would be jointly owned by the couple in a conjugal or communal partnership.  

The man’s net estate would be half of the conjugal assets and his own separate assets, minus any debts, burial costs, taxes, etc. By law, the net estate has to be divided equally among his widow and their four children; each one gets 20 percent. If the husband’s net estate when he laid down in eternal rest was 10 million pesos, each of the bereaved survivors gets two million.

If the husband has one child on the side besides his four legitimate children, the outsider has to have one-half the share of a legitimate sibling. The erring father’s net estate will therefore be shared by widow, four legitimate children, and one extra child, in the proportion of 1.0-1.0-1.0-1.0-1.0-0.5 parts of a 5.5-part whole. If the fondly remembered’s net estate is 10 million pesos, the widow and her four legitimate kids would each have a share of 1.818 million pesos and the extra kid 909,000.  

Passing away with a Will

The husband could have disposed of his possessions differently had he made a Will before leaving this world.

To begin with, he is obliged to allocate not less than half his net estate equally among his four legitimate children. That means each of the four should get a minimum of 12.5 percent of their father’s net estate. The widow gets the same share as a legitimate child; she also gets 12.5 percent. This means, incidentally, that the amount going to the widow varies with the number of legitimate children.

In our example, the widow and each of their four children would be allotted 1.25 million pesos and the one born outside the kulambô, 625,000.  

The sum of 3.125 million remains after the required minimum shares of the widow and five youngsters. This can be left to whoever the husband wishes to remember in his Will—perhaps to living parents and in-laws, siblings, nephews and nieces, friends, loyal kasambahays, charitable organizations, or added to the legitime of his wife or any one or all of his children, legitimate or illegitimate, and in any proportion. He cannot, however, leave anything to a mistress or boyfriend (surprise!). A Will is necessary for the deceased to allocate the so-called Free Portion.

It is possible for illegitimate children to individually get less than half the share of a legitimate sibling. The 50 percent share of the legitimate children and the share of the spouse cannot be reduced. With four legitimate children, 62.5 percent of the net estate would already be spoken for, leaving 37.5 percent. Each illegitimate child will therefore get less than 6.25 percent if there are more than six of them (some men are super lovers).  

In the extreme case where the husband and his wife have an unico hijo, the Civil Code provides that the unico hijo gets one half of the net estate, the surviving spouse gets one fourth and remaining one fourth is the Free Portion. If apart from the unico hijo, the father also has a niño ilegitimo, the unico hijo gets one half of the estate, the widow one fourth, and the extra hijo one fourth.  

A Common Mistake

According to Atty. Hilado, a common mistake is to think that the surviving spouse is entitled to 50 percent of everything owned by the deceased spouse, including any property that was inherited or donated to the deceased spouse, which is thereby considered the deceased’s separate property.  

A generalization is not possible but let’s check out a simple hypothetical example, say a couple with conjugal or communal assets of 10 million pesos, with the deceased having separate assets of 100 million. The deceased’s estate is therefore 105 million (five million pesos of conjugal property plus 100 million of separate property). Without a Will, with surviving spouse and four legitimate children and with no illegitimate children, the amount is supposed to be divided equally among the five surviving heirs. Each of them is supposed to receive 21 million pesos.  

It would be erroneous to proceed as if the surviving spouse is entitled to half the net estate of the deceased spouse, 52.5 million pesos in this example and to also receive a share in the other half equal to that of a child. If such were to happen, the other 52.5 million would be split in five portions of 10.5 million each for the five survivors.  

Each of the four kids would then end up with 10.5 million instead of the 21 million that is one-fifth of their father’s 105 million net estate. On the other hand, the widow ends up with 52.5 million plus 10.5 million or 63 million pesos rather than 21 million. The children would be short 10.5 million each while the widow would have a 42 million peso windfall. It’s okay if the widow does not remarry but if she does, there could be a Russia vs. Ukraine outcome.  

Caution

There have been numerous relevant developments in recent years, notably changes in estate, donor’s taxes, and capital gains taxes. Accordingly, the disposition of the net estate of a deceased spouse depends on when he or she dies, when they got married, when and what property each inherited or received, gifts previously given to heirs, and so on.

Needless to say, most people’s circumstances are nothing close to our examples, but no matter the size, it’s best to get an expert to plan one’s estate and avoid any post-mortem fireworks. 

Notes: (a) Your columnist is greatly indebted to Atty. Ma. Victoria Rotor-Hilado for her patience and help in preparing this article. Among her works are Heirs and Their Shares (Mandaluyong City: Anvil Publishing, Inc., 2016) and A Well-Ordered Estate (Mandaluyong City: Anvil Publishing, Inc., 2017); and (b) Atty. Hilado caught a mix-up in Part I of this article in the definitions of legitime with and without a Will.  The oversight is corrected in this second part.

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