This document summarizes Rule 74 of the Rules of Court regarding the settlement of estates. It discusses the different sections of Rule 74 which provide for: extrajudicial settlement by agreement between heirs (Section 1); summary settlement of small value estates not exceeding Php10,000 (Section 2); requiring distributees to post bonds prior to partition (Section 3); liability of distributees and estates within 2 years (Section 4); and claim periods for minor or incapacitated persons (Section 5). An illustrative case is also provided where the court upheld the heirs' agreement to partition the estate themselves without judicial administration.

1. SUMMARY SETTLEMENT
OF ESTATES
Rule 74

2. EXTRA JUDICIAL
SETTLEMENT BY
AGREEMENT BETWEEN
HEIRS
Section 1

3. SECTION 1
 Sect. 1 of Rule 74 is an exception to the general rule that when a person dies
leaving property, the same should be judicially administered;
 There are different modes of settlement of estate of a deceased person, one of
which is by virtue of an EXTRAJUDICIAL SETTLEMENT OF ESTATE;
 Judicial administration and the appointment of an administrator is a superfluous
and unnecessary proceeding which is why such process is not favored;
 If it cannot be helped, there must be “good reason” to warrant judicial
administration;
 “Good Reason” will depend on the circumstances of each case;

4. SECTION 1
 The following are not considered as “good reasons”
• Dispute among heirs;
• Multiplicity of suits;
• Having legal capacity to appear
 Partition although oral, is valid and binding;
 Compromise agreements among heirs are also valid;
 However, the heirs cannot divest the court of its already acquired
jurisdiction.

5. SUMMARY SETTLEMENT
OF ESTATES OF SMALL
VALUE
Section 2

6. SECTION 2
 Whenever the gross value of the estate of a deceased person does
not exceed ten thousand pesos (Php 10,000.00), which fact is made to
appear upon hearing which would be held:
“not less than one (1) month nor more than three (3) months from the
date of the last publication of a notice which shall be published once a
week for three (3) consecutive weeks”

7. SECTION 2
 after which, the court may proceed summarily without the
appointment of an administrator and without delay to grant, if
proper, the allowance of will, and to determine who may legally
participate in the estate;
 This order shall be in the office of the clerk or the register’s office.
 Amendment : MeTC, MTC, MCTC probate jurisdiction not
exceeding Php 100,000.00 or Php 200,000.00 in Metro Manila

8. BOND TO BE FILED BY
DISTRIBUTEES
Section 3

9. SECTION 3
 If property other than real is to be distributed, the court may
require the distributees to file a bond prior to partition in an amount
fixed by court;
 Said bond is conditioned for payment of any just claim which may
be filed under section 3.

10. LIABILITY OF
DISTRIBUTEES AND
ESTATES
Section 4

11. SECTION 4
 If, within two (2) years, it shall appear that:
• An heir has been unduly deprived of his lawful participation in the estate
or money payable to him/her;
• There are outstanding debts against the estate which have not yet been
paid;
 Such heir, other person or court may either:
• Compel the settlement of the estate in such manner so as to satisfy such
lawful participation;
• Settle the amount of such debts or lawful participation and order how
much and in what manner each distributee shall contribute;
• If circumstances require, issue execution of the bond provided in section
3.

12. SECTION 4
 This rule, however, is not applicable to those who had no
knowledge of the settlement;
 The prescriptive period to annul settlement is four (4) years; An
action for reconveyance is ten (10) years;
 When the plaintiff is in possession of the land t5o be reconveyed,
prescription cannot be invoked in an action for reconveyance.

13. PERIOD FOR CLAIM OF
MINOR OR
INCAPACITATED PERSONS
Section 5

14. SECTION 5
 If, on the date of the expiration of the two (2) year period, the
person authorized to file a claim is under any of the following
conditions, he may present his claim within one (1) year after such
disability is removed:
• Minority;
• Mentally incapacitated;
• In prison;
• Outside the Philippines.

15. ILLUSTRATIVE CASE
 MARIA SOCORRO AVELINO, petitioner,
vs.
COURT OF APPEALS, ANGELINA AVELINO, SHARON AVELINO, ANTONIO AVELINO, JR.,
TRACY AVELINO, PATRICK MICHAEL AVELINO and MARK ANTHONY AVELINO, respondents.
 FACTS:
• Antonio Avelino Sr. died intestate leaving 2 wives and several children from 2 marriages
• The petitioner, Socorro, is Antonio Sr.’s child from his first marriage and upon his death, she filed for a
petition to secure letters of administration to his estate
• This was opposed by the other heirs who wanted to partition the estate among themselves
 ISSUE:
• Whether or not the lower courts were correct in denying the Socorro’s petition
 RULING:
• Yes. Rule 74 provides that where the intestate estate of a deceased person left no debts or obligations and the
heirs are all of legal capacity to inherit, they may do so in the most expeditious manner available to them.

17. THANK YOU!!!
Jaylyn Joya Ammang