Basic concepts in estate proceedings and estate tax

Among the inescapable facts in life, something which everyone shares regardless of status, race, sex or creed, is death. A person may leave properties (or liabilities) upon death, so a discussion on the basic concepts on estate proceedings is in order.

Inheritance - Inheritance includes all the property, rights and obligations of a person which are not extinguished by his death. (Civil Code, Art. 776)

Testate Estate - An estate of a deceased person which is settled or to be settled with a valid last will and testament.

Intestate Estate - An estate of a deceased person without a will.

Will - An act whereby a person is permitted, with the formalities prescribed by law, to control to a certain degree the disposition of his estate. (Civil Code, Art. 783)

Testator - The deceased person who made a last will and testament. (Civil Code, Art. 775)

Probate - A special proceeding to establish the validity of a will. Probate is mandatory, which means that no will passes either real or personal property unless it is proved and allowed in a proper court.

Reprobate - A special proceeding to establish the validity of a will previously proved in a foreign country.

Legatee - One who is given personal property through a will. (Civil Code, Art. 782)

Devisee - One who is given real property in a will. (Civil Code, Art. 782)

Executor - The person named in the will who is entrusted to implement its provisions. (Rules of Court, Rule 78)

Executrix - A female executor.

Administrator - The person entrusted with the care, custody and management of the estate of a decedent until the estate is partitioned and distributed to the heirs, legatees and devisees, if any. (Rules of Court, Rule 78)

Administratrix - A female administrator.

Special proceedings - A remedy by which a party seeks to establish a status, a right, or a particular fact. (Rules of Court, Rule 1, Sec. 3 [c]). Among the subject matters of special proceedings are escheat and settlement of estate of deceased persons. (Rules of Court, Rule 72, Sec. 1)

Escheat - A proceeding whereby the state, by virtue of its sovereignty, steps in and claims the real or personal property of a person who dies intestate leaving no heir. In the absence of a lawful owner, a property is claimed by the state to forestall an open “invitation to self-service by the first comers”. (Republic vs. CA, G.R. No. 143483)

Estate tax - A tax on the transfer of the net estate of the decedent. (Tax Reform Act of 1997, Sec. 84)

Gross estate - The total value of all property belonging to the decedent at the time of death, wherever situated. (Tax Reform Act of 1997, Secs. 85, 104)

Net estate - Gross estate less allowable deductions and exemptions. (Tax Reform Act of 1997, Secs. 84, 85 and 86)