Conditions for Encumbrance of Realty
- Personal estate exhaustion is not a prerequisite; realty can be sold or encumbered even if personalty exists but is insufficient or encumbering it would harm the estate’s operation or stakeholders.
- No prior sufficient provision by the testator for payment of debts and charges must exist.
- Court approval is mandatory.
- Written consent and approval must be obtained from heirs, devisees, and legatees residing in the Philippines.
Requirements for Court Approval
- The executor or administrator must apply to the court for a license to sell, mortgage, or otherwise encumber the real estate.
- The court must be convinced that such action benefits those interested in the estate.
- The transaction must not defeat any existing devise of land.
- Where real estate devised to a particular individual is to be encumbered, that devisee’s assent is compulsory.
Legal Procedural Highlights
- The amendment clarifies that encumbrance of realty may occur before exhausting personal property assets.
- Emphasizes protection of the interests of heirs, devisees, and legatees through required consents and court oversight.
Effectivity
- The amendment takes effect immediately upon its approval by the legislative body.