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The problem with co-ownership

Written by Atty. Angelo M. Cabrera / Thy Will Be Done Tuesday, 01 May 2012 19:59

IN my last two articles, I ended with a statement that our inheritance laws may be to blame for the many cases of conflicts and court cases that usually arise between and among family members over their inherited property. The reason for this is that our laws, although supposed to be biased against co-ownership, actually force heirs into such a situation. Co-ownership is oftentimes a fertile ground for conflicts and disagreement, which may eventually lead to either an inequitable situation where a domineering heir lords it over the others, or a situation where an inherited property becomes idle and unproductive owing to the heirs collective failure to agree and settle.

In one case, the Supreme Court said, The law does not encourage co-ownerships among individuals, as oftentimes it results in inequitable situations such as in the instant case. Co-owners should be afforded every available opportunity to divide their co-owned property to prevent these situations from arising. (GR 170829, November 20, 2006)

Although clear in this statement that co-ownership is to be discouraged, unfortunately when it comes to inheritance, the opposite is almost always the case. This is because, under our laws, when a person dies with or without a last will and testament, a portion of his estate, called legitime, is reserved for his compulsory heirs, who include his spouse and children (or parents in the absence of children). In other words, if he has only one propertyhis family homehe cannot bequeath the same to whoever he likes, even if he writes a will, because the law requires that all his compulsory heirs be given their rightful shares in the inheritance. If he leaves behind four children and a spouse, each of these five compulsory heirs must be given a share and, therefore, becomes a co-owner of that family home.

It isnt surprising, therefore, why in this country people do not bother to write a last will and testament. In fact, whenever I conduct an estate-planning forum, I would usually ask who among the participants had actually written a will, and I would usually see only one hand raisedmine.

Of course, its different for a wealthy person, whose estate may involve a number of assets and pieces of property that he can distributeby willamong his compulsory heirs. But for the majority of Filipinos whose only asset is perhaps their family home, a last will and testament may serve them no purpose because the end-result will be the same as when one dies without

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The problem with co-ownership


Written by Atty. Angelo M. Cabrera / Thy Will Be Done Tuesday, 01 May 2012 19:59

a willco-ownership.

We copied this concept from the Spanish Civil Code, which requires that every compulsory heir be given his rightful share in the inheritance.

In many Western countries, where common law is practiced, there is no such thing as compulsory heirs and legitimes. In fact, a person can will away his entire fortune to whomever he likes, even to dogs, and that is as legal as it can get.

Some argue that legitimes is the best protection for heirs because it assures them of a share in the inheritance. I submit that an inheritance is not to be considered an entitlement. Rather, it is to be a bonus, a blessing, if you will. One must rely on his own ability and effort to build his own wealth rather than take on the born with a silver spoon mentality, which breeds idleness and all kinds of negative attitudes. On the other hand, the absence of something to depend on could spur a person to strive and succeed on his own merits.

In any case, the issue boils down to this: Entitlement inevitably leads to co-ownership, co-ownership inevitably breeds conflict, and conflict inevitably destroys families.

It is time to review our inheritance laws. Its inevitable.

If you would like to learn more about the inheritance laws in the Philippines, you may send an e-mail to Elyon Publishing House at elyonpublishing@gmail.com for information about the estate planning forum that Atty. Cabrera regularly conducts.

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