The Math Of Succession | How Do You Calculate Legitime

How do you calculate legitime? Rest in Peace (RIP) is a common well-wish uttered when one acquired knowledge of one’s demise. Although far from our thoughts, will there be peace after death if death results in chaos amongst the heirs of the deceased?

If consciousness still exists after death, this possible occurrence will not clearly grant the deceased rest in peace. Sadly, there is no magic spell that could bring the person back to life to settle the conflict, particularly in the determination of legitime.

Thanks to the law on succession, there is no need for resurrection because the law provides for rules regarding the matter which shall be discussed here-under.

How do we define legitime? 

Legitime is that part of the testator’s property which he cannot dispose of because the law has reserved it for certain heirs who are, therefore, called compulsory heirs.¹

The right to dispose of one’s property is not natural but a statutory right, hence, the law can impose limitations to the exercise of such right.² The state acts as the protector and guarantor of compulsory heirs’ successional rights.

Part of the guarantee and protection is the prohibition on the part of the testator to deprive the said heirs of their rightful share from his estate except there is valid disinheritance according to the prescribed rules.

To fully implement this safeguard, the law provides for a proper determination formula for legitime and free portion of the estate of the deceased to avoid confusion and smooth probate of the estate.

How do you calculate legitime?

We calculate the legitime based on what is provided under the Section 5³ Chapter 2 of the Law on Succession pertaining to the legitimes of the compulsory or forced heirs of the decedent, in case the latter dies with a will.

Nonetheless, even in mixed succession, where not all of the estate of the decedent has been disposed of, we should also calculate the legitime of the compulsory heirs to prevent inofficious disposition made by the testator with respect to the part which he disposes of by last will and testament.

In determining or calculating the legitime of compulsory heirs, one of the most basic principles that you should have in mind is that any class⁴ surviving alone shall be entitled to 1/2 portion of the entire estate of the testator.

The other half shall be considered as the Free Portion of the estate. When any of these classes are survived by other respective compulsory heirs, the latter’s legitime shall be taken from the aforesaid free portion.

After deducting the legitime of the other surviving compolsuory heirs together with the primary class, the remainder of the estate shall be considered the disposable free portion.

You can consult the article “Inheritance Law Philippines – Heirs & Distribution Explained | What Is Legal Or Intestate Succession?” for practical guidance on how to actually visualize the legitime of the compulsory heirs utilizing the Table of Legitime.

When is the reckoning point of the determination of legitime?

As a general rule, the legitime is computed or to be determined at the moment of the death of the decedent⁵ since the right of succession is transmitted only upon the latter’s demise.⁶

However, there are instances under the law which authorizes determination of legitime prior to the death of the decedent which is referred to as “presumptive” or “provisional” legitime.⁷

Article 51 of the Family Code mandates the delivery of the presumptive legitime of all common children upon annulment of the voidable marriage or upon a judicial declaration of its nullity under Article 40 of the same Code.

The amount of presumptive legitime shall be determined as of the date of the final judgment of the trial court, taking into account the whole estate of the parent as of such date.⁸ Another instance provided under Article 760 of the Civil Code is when there is subsequent birth, re-appearance, or adoption of a child.

In cases where the donation inter vivos entered into by the deceased parent of said child exceeded the free portion that can be donated, the same would require revocation or reduction which will also then require provisional liquidation of legitime of the child reckoned at the time of the subsequent birth, re-appearance, or adoption of a minor child.⁹

What is the formula for the computation of the Net Hereditary Estate?

According to Article 908 of the Civil Code, the formula for the computation of the net hereditary estate is: PROPERTY LEFT minus DEBTS and CHARGES plus VALUE OF COLLATIONABLE DONATIONS equals NET HEREDITARY ESTATE.¹⁰

Article 908. To determine the legitime, the value of the property left at the death of the    testator shall be considered, deducting all debts and charges, which shall not include those imposed in the will. To the net value of the hereditary estate, shall be added the value of all donations by the   testator that are subject to collation, at the time he made them.¹¹

To illustrate, suppose Pedro died with an estate of P10 million and debts amounting to P3 million. When Pedro was still alive, he donated in favor of Juan, a legitimate child, P5 million. Pedro died and was survived by two legitimate children, Juan and Simon. In this case, we shall apply the formula as mentioned above to come up with the net hereditary estate.

Formula: P10 million – P3 million + P5 million¹² = P12 million (net hereditary estate).

How much is the legitime of Juan and Simon?

Each will be entitled to a legitime of P3 million. The rule provides that legitime of legitimate children and descendants consists of one-half of the hereditary estate of the father and of the mother.¹³

Here, since the net hereditary estate amounts to P12 million, Juan and Simon are entitled to the half of the said amount, which is P6 million, equally divided between them.

Will Juan be entitled to another P3 million on top of the P5 million donated to him by his father Pedro when he was alive?

The answer is clearly in the negative. The donation inter vivos in favor of Pedro will be part of the COLLATIONABLE DONATIONS as contemplated in the above formula. The rules provide that donations given to children shall be charged to their legitime.¹⁴

In this case, the excess of P2 million from the donation in favor of Juan will be deducted to the free portion of the estate. Since the free portion minus the legitime amounts to P6 million, the P2 million will therefore be charged thereto. Hence, the total free portion is now at P4 million.

In sum, the foregoing discussions can be summarized in three steps:¹⁵

First is determination of the value of the deceased property left at the time of his death. This is referred to as “gross value of the estate”.

Second is the deduction of all debts and charges of the estate from the gross value of the estate. The balance therefore will be referred to as “net value of the estate”.

Third is the addition of the value of the donations subject to collation to be added to net value of the estate. This will then determine the “net hereditary estate” which will serve as the basis for the computation of legitime of the surviving compulsory heirs.

How is the Gross Value of the Estate determined?

In a judicial proceeding for the estate settlement, the nature of the proceeding will determine the proper procedure. In case of administration proceedings, the administrator or the executor is required to return to the court a true inventory and appraisal of all real and personal estate of the deceased which he possesses or has a knowledge of.¹⁶

The administrator will also be assisted by a tax appraiser. When there is no administration proceeding, the interested persons can enter into a common agreement to determine the valuation of the estate subject to the provisions of the Internal Revenue Code.

Does sentimental value affect the valuation of the property?

The answer is in the negative. Even if the property is so dear and brings good memories to the deceased, it cannot justify a higher valuation more than the usual. Therefore, the real and true value of the property should be considered alone without any regard to their sentimental value.¹⁷

What are deductible charges?

The debts and charges deductible are those incurred during the lifetime of the deceased. Moreover, the charges referred to in Article 908 are not exclusively those imposed in the will like legacies, but the charges demandable even without the will. The rule provides that no distribution of the estate shall be allowed until all debts and obligations have first been paid.¹⁸

To illustrate, before the death of John, he incurred a debt of P900,000.00 to Maria. Although not imposed in his will, the debt should be paid just the same.

In the same example, suppose that John was not indebted to Maria and just wanted to give P900,000.00.  His estate amounts to P1 million and ordered his son Simon to give the amount.

In this case, if Simon gives Maria P900,000.00, his legitime will then just become P50,000.00 since the net estate would just then be P100,000.00. Here, it is not the intention of the law to diminish the legitime of the heirs.

Hence, the net estate will remain at P1 million and Simon’s legitime will be P500,000.00. Thereafter, charges in favor of Maria will be reduced to P500,000.00 corresponding to the free portion of John’s estate so as not to impair Simon’s legitime.

What is collation of donations?

In Arellano vs. Pascual, the Court explained that collation of donation is done for the purpose of securing equality among the compulsory heirs in so far as is possible, and to determine the free portion, after finding the legitime, so that inofficious donations may be reduced.¹⁹

The collation is used under the Civil Code is used as a mere mathematical operation by the addition of the value of donations made by the testator to the value of the hereditary estate.²⁰

It also includes subsequent act of imputing or charging such value against the legitime or the free portion, as the case may be. Moreover, it is also the return to the hereditary estate of that part of the property disposed of by lucrative title by the testator during his lifetime which is inofficious.²¹

What happens when the donated properties increased or decreased in value?

If the properties increased in value, the amount of increased shall be given to the donee because the value of collationable donations are determined at the time the donations were made and not at the time of collection.²²

In case of loss, whether by force majeure or through the donee’s negligence, the latter shall suffer the same following the rule of res perit domino.²³

What are the rules in imputation of donations?

Article 909. Donations given to children shall be charged to their legitime. Donations made to strangers shall be charged to that part of the estate of which the testator could have disposed by his last will. Insofar as they may be inofficious or may exceed the disposable portion, they shall be reduced according to the rules established by this Code.¹⁴

And

Article 910. Donations which an illegitimate child may have received during the lifetime  of his father or mother, shall be charged to his legitime. Should they exceed the portion that can be freely disposed of, they shall be reduced in the manner prescribed by this Code.²⁴

According to Article 909 and 910 of the Civil Code, if the testator made donations to legitimate and illegitimate children, such donations shall be charged to their respective legitime. If the amount of donation given exceeds the amount of legitime, the excess shall be charged to the free portion of the estate. This is because of the presumption that the testator intended to give their legitime in advance.²⁵

While the donations in favor of the legitimate and illegitimate children are charged to their legitime, the donations made to strangers are charged to the free portion of the deceased estate.²⁶

In cases where the value of the donations given to a stranger exceeds the disposable free portion which impairs the legitime of the compulsory heirs, the said donation is considered inofficious therefore, shall be reduced in an action filed for that purpose.²⁷

To illustrate, if John died with an estate of P1 million and survived by his son, Simon. During his lifetime, he made a donation inter vivos in favor of Maria, a stranger in the amount of P1 million.

Here, the net hereditary estate amounts to P2 million and Simon’s legitime amount to P1 million and the free portion amounts to P1 million as well. Hence, the value of the donation in favor of Maria shall be charged against the free portion. Since, there is no inofficious donation, there will be no deduction to the amount of the donation.

Suppose that John, during his lifetime, incurred a debt of P800,000.00. Here, the net hereditary estate will be reduced to P1.2 million. Hence, the legitime of Simon will be P600,00.00 and the free portion is P600,000 as well.

Since the value of the donation given to Maria exceeded the amount of the disposable free portion, Simon may file an appropriate action to seek for its reduction.

1. Article 886, Civil Code of the Philippines[↩]
2. Article 738, Civil Code of the Philippines; Herreros vs. Gil, G.R. No. L-3362, March 1, 1951[↩]
3. Legitime: Articles 886 – 914[↩]
4. 1] surviving spouse, legitimate child or descendants, legitimate ascendants, illegitimate child or descendants, and illegitimate parents[↩]
5. Article 908, Civil Code of the Philippines[↩]
6. Article 777, Civil Code of the Philippines[↩]
7. Rabuya, Succession, p. 532[↩]
8. Supra.[↩]
9. Rabuya, Succession, p. 533[↩]
10. Paras, Wills and Succession, p. 358[↩]
11. Article 908, Civil Code of the Philippines[↩]
12. 3M of 5M is an Advance in the Legitime of Juan[↩]
13. Article 888, Civil Code of the Philippines[↩]
14. Article 909, Civil Code of the Philippines[↩][↩]
15. Rabuya, Succession, p. 534[↩]
16. Section 1, Rule 83 of the Rules of Court[↩]
17. Manresa, 6^th ed., 371[↩]
18. Rule 90, Section 1 of the Rules of Court[↩]
19. G.R. No. 189776, December 15, 2010[↩]
20. Arellano vs. Pascual, Ibid.[↩]
21. Ibid.[↩]
22. Paras, Wills and Succession, p. 360[↩]
23. 6 Manresa 411 cited in Paras, p. 360[↩]
24. Article 910, Civil Code of the Philippines[↩]
25. Rabuya, Succession, p. 540[↩]
26. Article 909, Civil Code of the Philippines[↩]
27. Articles 752 and 771, Civil Code of the Philippines[↩]