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)