Dear Attorney,

I hope you can help me with a concern. My partner recently passed away, and the motorcycle is under their name. What is the process for changing the ownership of the vehicle to my name?

Sincerely,
A Concerned Heir

Insights:

When the registered owner of a motor vehicle passes away in the Philippines, the vehicle becomes part of the deceased’s estate. Transfer of vehicle ownership involves a legal process of transferring the title of the deceased person’s motor vehicle to their heirs or successors. This process is governed by laws related to succession, inheritance, and the rules of the Land Transportation Office (LTO).

Steps for Transferring Ownership of a Deceased Person's Vehicle

Secure the Death Certificate
The first step is to obtain the death certificate of the deceased individual. This document will serve as proof that the registered owner has passed away.
Settlement of Estate
Under Philippine law, the assets of the deceased, including motor vehicles, form part of their estate. For the vehicle’s ownership to be transferred, the estate must first be settled. There are two primary ways this can happen:

a. Extrajudicial Settlement of Estate
If the heirs are in agreement and there is no will or complications such as disputes among heirs, they may execute an extrajudicial settlement of the estate. This must be done through a public document, usually notarized, and published once a week for three consecutive weeks in a newspaper of general circulation.

b. Judicial Settlement of Estate
If there is a will or disputes between heirs, the estate must be settled through the courts. This process can be longer and more costly, as it involves litigation.
Secure an Affidavit of Transfer of Ownership
The heirs must execute an Affidavit of Transfer of Ownership, which details the heirs’ agreement to transfer the ownership of the vehicle to one or more of them. This affidavit is required to indicate how the vehicle will be divided or assigned.
Payment of Estate Tax
Before any transfer of ownership can proceed, the heirs must secure a Certificate Authorizing Registration (CAR) from the Bureau of Internal Revenue (BIR) showing that the estate taxes have been paid. Estate tax is imposed on the net estate of the deceased. The estate tax rate in the Philippines is 6%, but certain deductions and exemptions may apply depending on the value of the estate.
Prepare Required Documents for LTO Transfer
After settling the estate and securing the necessary documents, the next step is to prepare the requirements for the Land Transportation Office (LTO). The required documents typically include the following:
- Death Certificate of the registered owner
- Affidavit of Transfer of Ownership or Extrajudicial Settlement
- Certificate Authorizing Registration from the BIR
- Valid IDs of heirs
- Original LTO Certificate of Registration (CR) and Official Receipt (OR) of the vehicle
- Deed of Sale (if applicable)
- Emission Test Result
- Insurance coverage for the vehicle
Submission to the LTO
Once all the necessary documents are gathered, the next step is to submit them to the LTO office where the vehicle is registered. The LTO will process the change of ownership and issue a new Certificate of Registration (CR) and Official Receipt (OR) under the name of the new owner.

Key Considerations for Transfer of Vehicle Ownership

Extrajudicial Settlement: In cases where there are multiple heirs, it is crucial that they all agree on how the estate will be distributed. If any heir objects, the settlement may have to be done judicially.
Payment of Estate Taxes: Estate tax liabilities must be paid before the vehicle’s title can be transferred. Failure to settle the estate tax can prevent the registration of the vehicle from being transferred.
Legal Assistance: It is advisable to consult a lawyer for guidance, especially in cases involving multiple heirs or complex estates, as there may be disputes or other legal complications.
Timeframe and Costs: The timeframe for completing the transfer of ownership depends on the complexity of the estate and the efficiency of the processing by the BIR and LTO. Costs include notarial fees, estate taxes, legal fees (if applicable), and administrative fees for the LTO.
Heirs’ Obligations: Heirs who inherit the vehicle should ensure that they also comply with other legal obligations, such as renewing vehicle registration and maintaining insurance coverage.

Conclusion

Transferring ownership of a deceased person's motor vehicle in the Philippines is a process that involves compliance with both inheritance laws and the rules set by the Land Transportation Office. It is critical for the heirs to secure the proper documents and settle the estate to avoid any legal impediments to the transfer. By ensuring the legal formalities are met, the transfer can proceed smoothly, allowing the new owner to register the vehicle in their name and avoid potential issues in the future.