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This article was originally published on June 1, 2022 and has been updated to reflect recent legal developments.

The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.

Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.

AT A GLANCE:

Article 911 of the Civil Code of the Philippines states that after the legitime has been determined in accordance with the three Civil Code, the reduction shall be made in accordance with the Civil Code.

Article 907 of the Civil Code of the Philippines provides that testamentary dispositions that impair or diminish the legitime of compulsory heirs shall be reduced upon their petition, insofar as they may be inofficious or excessive. This provision establishes the legal basis for the reduction of inheritance to protect the compulsory heirs’ lawful share of the estate.

Donations given to children and strangers, in so far as they may be inofficious or may exceed the disposable portion, they shall be reduced according to the rules established by the Civil Code. (Article 909, Civil Code)

In cases of donations which an illegitimate child may have received during the lifetime of his father or mother, they shall be reduced in the manner prescribed under the Civil Code, should they exceed the portion that can be freely disposed of. (Article 910, Civil Code)

Article 911 of the Civil Code of the Philippines states that after the legitime has been determined in accordance with the three Civil Code, the reduction shall be made as follows:

(1) Donations shall be respected as long as the legitime can be covered, reducing or annulling, if necessary, the devises or legacies made in the will;

(2) The reduction of the devises or legacies shall be pro rata, without any distinction whatever.

If the testator has directed that a certain devise or legacy be paid in preference to others, it shall not suffer any reduction until the latter have been applied in full to the payment of the legitime.

(3) If the devise or legacy consists of a usufruct or life annuity, whose value may be considered greater than that of the disposable portion, the compulsory heirs may choose between complying with the testamentary provision and delivering to the devisee or legatee the part of the inheritance of which the testator could freely dispose. 

If the devise subject to reduction should consist of real property, which cannot be conveniently divided, Article 912 of the Civil Code provides that it shall go to the devisee if the reduction does not absorb one-half of its value; and in a contrary case, to the compulsory heirs; but the former and the latter shall reimburse each other in cash for what respectively belongs to them.

Let’s apply.

Jose Mari is the father of Gerard Franco and Pax. Jose Mari’s estate amounts toThirty Million Pesos (PhP 30,000,000.00). Under the law, Jose Mari may freely dispose of Fifteen Million Pesos (Php 15,000,000.00) or half of his estate. While the remaining Fifteen Million Pesos (Php 15,000,000.00) constitutes the legitime of Gerard Franco and Pax.

Suppose Jose Mari donates PhP 20,000,000.00 to his friend Rene. What happens to the excess donation that infringes on the legitime of Gerard Franco and Pax?

Under Article 907 and 909 of the Civil Code, Jose Mari’s donation to Rene should be reduced to PhP 15,000,000.00 in order not to infringe the legitime of the other children. 

In this scenario, the legitime of Gerard Franco and Pax amounts to Fifteen Million Pesos (PhP15,000,000.00). The donation of Twenty Million Pesos (PhP 20,000,000.00) to Rene impairs their legitime by Five Million Pesos (PhP 5,000,000.00). Accordingly, Jose Mari cannot donate more than PhP 15,000,000.00 to his friend. The excess PhP  Five Million Pesos (PhP 5,000,000.00) is considered inofficious and must be restored to complete the legitime of Gerard Franco and Pax. Once completed, the Fifteen Million Pesos will be divided equally between the two, giving each a legitime of Seven Million Five Hundred Thousand Pesos (PhP 7,500,000.00).

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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 09175772207/ 09778050020.

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