Wednesday, June 8, 2011

Who Shall Inherit

A marriage involving individuals who are citizens of two different countries can be quite perplexing.  But the important rule of thumb here is to determine who had just died, and what the law of his country says (nationality).  In some instances, the domicile (where the deceased resided) may apply if the national law of the deceased says that the law of his country of domicile shall apply.  This is called renvoi

To give an example, Mr. Smith died in the Philippines and he is a national of country X.  The laws of country X says that the law governing succession shall be the country of domicile (residence) of Mr. Smith.  The law of country X states that all of the property shall go to the surviving spouse regardless if there are surviving descendants (children).  Philippine law says if there is a surviving spouse and surviving descendants (children), each shall inherit from the estate equally.  What law do you think shall apply?

The answer is Philippine law because the law of country X states that the law of Mr. Smith's domicile shall apply.

Why is it important to have a will? Well simply because if you don't have one, probate proceedings will be much more complex and will enrich not your heirs, but lovable professionals like myself -- lawyers. If you have a will, all that will be proven in Court is the extrinsic validity of the will.  Another very convincing reason to draft a will (if you don't have one yet), is that it will save your relatives the angst of fighting over your estate.  Instead of your death becoming a time of mourning, it can be a time of conflict amongst your family members.

Another alternative I have just recently learned is from a book I was reading by an American lawyer (Madeline Gauthier, "Where there's a Will, There's a Way") is to make use of a Living Trust.  It allows certain benefits not available in a Will, which I may discuss in some future time once I have finished my reading in full. :p

In Philippine jurisdiction, other things that may complicate probate proceedings are: 1) if you have properties not within the Philippines, 2) if the will was contested; 3) if you have creditors or 4) a compulsory heir was not included therein.

So who are compulsory heirs? Compulsory heirs are those heirs you cannot leave out in a will or in intestate succession, except in exceptional circumstances.  These can be your parents, if you don't have a spouse or children or it can be the spouse and children.  In Philippine jurisdiction, the presence of descendants excludes the ascendants.  That means if you have children, your parents do not inherit unless you provide a legitime for them from the free disposable portion of your estate.

At this point I will cut it short.  The discussion on compulsory heirs is a very long discussion by itself.  :)  Till next time.

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