After reading this article about reduction of inheritance, also read: HEREDITARY RIGHTS OF AN ILLEGITIMATE CHILD
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Donations given to children shall be charged to their legitime
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A person cannot give by donation more than he can give by Will
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Donations are respected as long as the legitime can be covered
Moderate gifts, when made by and between spouses, are allowed under the Philippine law.
However, if the giving of gifts affect the legitime of the donor’s compulsory heirs, may it still be allowed?
The law says:
No.
No person may give or receive, by way of donation, more than he may give or receive by Will.
In accordance to the above-mentioned mandate of law, a person cannot make a Will to donate his particular property to the prejudice of his compulsory heirs.
Let us take this hypothetical example.
Jose Mari is the father of Gerard Franco and Pax. Jose Mari’s estate is in the total amount of Thirty Million Pesos (Php 30,000,000.00). Under the law, Jose Mari can freely donate his Fifteen Million Pesos (Php 15,000,000.00). He cannot donate the other Fifteen Million Pesos (Php 15,000,000.00) as it pertains to the legitime of Gerard Franco and Pax.
In case Jose Mari donated the amount of Php 20,000,000.00 to his friend Rene, the law would say that Jose Mari’s donation to Rene should be reduced to Php 15,000,000.00. To allow the donation of Jose Mari to Rene in the amount of Php 20, 000,000.00 would obviously affect and reduce the legitime of Gerard Franco and Pax. In our previous articles, it was discussed that compulsory heirs cannot be deprived of their legitime or that a legitime should not be impaired.
In the example above, the legitime of Gerard Franco and Pax amounts to Fifteen (15) Million Pesos. With the donation of Jose Mari to Rene, the legitime of Gerard Franco and Pax were impaired in the total amount of Php 5,000,000.00. In this case, Jose Mari cannot donate to his friend more than Php 15,000,000.00. The excess of Php 5,000,000.00 is inofficious, thus, it shall be added to complete the legitime of Gerard Franco and Pax. The amount of Fifteen (15) Million Pesos, when completed, will be divided equally for Gerard Franco and Pax. As a consequence, Gerard Franco and Pax will be entitled to a legitime of Seven Million and Five Hundred Thousand Pesos (Php 7,500,000.00) each.
On the other hand, if Jose Mari actually donated by way of Will the amount of Php 25,000,000.00 to Gerard Franco alone and leaving only the amount of Php 5,000,000.00 to Pax, the amount donated by Will to Gerard Franco is also inofficious up to the amount of Php 2,500,000.00.
Why only the amount of Php 2,500,000.00?
The law says:
If the decedent has left a Will with only children as his compulsory heirs, said decedent may dispose half of his estate. This means that he can donate half of his estate which is called “free portion” to any person he wishes. He cannot donate the other half to any other person except to his children.
This explains why in our above example, only the amount of Php 2,500,000.00 is inofficious. To refresh our minds, Jose Mari may donate his free portion of Php 15,000,000.00 to anyone he desires. It could be to one, some, or all of his children or to some strangers. The other Php 15,000,000.00 will be divided equally for Gerard Franco and Pax. Both Gerard Franco and Pax are entitled to a legitime of Php 7,500,000.00 each.
But in our example, Jose Mari opted to donate the whole of his free portion which is Php 15,000,000.00 plus another Php 10,000,000.00 to Gerard Franco leaving the amount of Php 5,000,000.00 only to Pax. Clearly, the legitime of Pax was impaired up to the amount of Php 2,500,000.00. As a remedy, Pax is entitled to demand the completion of his legitime from Gerard Franco as under the law, Pax is entitled to receive his legitime amounting to Php 7,500,000.00.
In the case of Gerard Franco, he is both a compulsory and a voluntary heir of Jose Mari. Gerard Franco is a voluntary heir with respect to the Php 15,000,000.00 that he received by way of Will from the free portion of his father Jose Mari. As to the amount of Php 7,500,000.00, he is a compulsory heir.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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my brother a dual citizen and a naturalized us citizen died in the Philippines , with properties here . He is single and without children and without a will . I am the only surviving sibling and one illegitimate brother . How should his properties be transfered to me alone or with my half brother ? Hope you can give me legal advice and how much would be the fees of your office. Thank you so much.