is a mode of acquisition by virtue of which the

property, rights and obligations to the extent of

the value of inheritance, of a person are
transmitted through his death to another or
other either by his will or by operation of law.
 Testamentary Succession
Intestate Succession
Mixed Succession
 is that which result from the designation of an
heir, made in a will executed in the form
prescribed by law.
 when a decedent dies without a will or with an
invalid one, the distribution of the estate shall
be in accordance with the default provision of
the Civil Code on succession.
 transmission of the decedent properties shall be
partly by virtue of a written will and partly by
operation of law.
 Is an act whereby a person is permitted, with
the formalities prescribed by law, to control to
a certain degree the disposition of the estate, to
take effect after his death.
1. Holographic will a will which is entirely
written, dated, and signed by the hand of the
testator himself.
2. Notarial will a notarized will signed by the
decedent and witnesses.
3. Codicil a supplement or addition to a will,
made after the execution of a will and annexed
to be taken as a part thereof, by which
disposition made in the original will is
explained, added to, or altered.
1. Decedent term applied to the person whose property is
transmitted through succession, whether or not he left a
will.
2. Estate refers to the property, rights and obligation of
the decedent not extinguished by his death. Represented
by:
1. Executor appointed to carry out the will.
2. Administrator appointed by court.
Legatee gifts of personal property.
Devisee gift of real property.
3. Heirs a person called to the succession either by the
provision of a will or by operation of law.
1. Primary heirs Legitimate children and their
direct descendants.
2. Secondary heirs Legitimate/Illegitimate
parents and ascendants
3. Concurring heirs The surviving spouse and
illegitimate descendants.
 Legitimate children are those born out of legal marriage.
Direct descendants refer to children or, in their absence,
grandchildren.
Legitimate parents refer to biological parents.
Illegitimate parents are adopting parents to an adopted
child.
The surviving spouse is the widow or widower of the
decedent.
Illegitimate descendants are illegitimate children.
 Taxes imposed upon transmission of property
from one person to another.
 Bilateral transfers
Unilateral transfer
Complex transfer
 involve transmission of property for a
consideration. They are referred to as onerous
transactions or exchanges.
The gains on bilateral transfer or exchanges are
subject to income taxation.
 involve the transmission of property by a person
without consideration. They are referred to as
gratuitous transactions.
Types of Unilateral Transfers
1. Donation Inter Vivos (during life time)
- subject to DONORS TAX
2. Donation Mortis Causa (fact of death)
- subject to ESTATE TAX
 transfer for less than full and adequate
consideration. These are sales made at prices
which are significantly lower than the fair
market value of the property sold.
transfer for less than full and adequate
consideration are split into its component:
1. transfer element representing gratuity is
indirect donation subject to transfer tax.
2. onerous portion representing realized gain
is subject to income tax.
1. Tax evasion or minimization theory
2. Tax recoupment theory
3. Benefit received theory
4. State partnership theory
5. Wealth redistribution theory
6. Ability to pay theory
1. Privilege tax
2. Ad valorem tax
3. Progressive tax
4. National tax
5. Direct tax
6. Fiscal tax