Special Rules and Proceedings: Rule 85

RULE 85


ACCOUNTABILITY AND COMPENSATION OF EXECUTORS AND ADMINISTRATORS


SEC. 1. Executor or administrator chargeable with all estate and income. – 

Except as otherwise expressly provided in the following sections, 

every executor or administrator is chargeable in his account 

with the whole of the estate of the deceased 

which has come into his possession, 

at the value of the appraisement contained in the inventory; 

with all the interest, profit, and income of such estate;

and with the proceeds of so much of the estate as is sold by him, 

at the price at which it was sold.


Section 1: Executor/Admin chargeable with all estate and income

  • Every executor or administrator is accountable for the entire estate that comes into their possession, including:

    1. Value as per inventory appraisal

    2. Interest, profit, and income from the estate

    3. Proceeds from any sale of estate assets


  • The executor or administrator is accountable for the whole estate of the decedent which has come to his possession at the value of the appraisement. 

  • While an executor or administrator has the duty to prepare a complete and true inventory of the decedent's estate which comes to his possession and knowledge, Section 1 only refers to those which come to his possession. Otherwise stated, an executor or administrator is not accountable for property that, although it comes to his knowledge, does not come to his possession.

  • As an exception, if the executor or administrator gains knowledge respecting the deceased's estate, he may be held accountable if he fails to recover possession of the same through his fault or negligence.



SEC. 2. Not to profit by increase or lose by decrease in value. — 

No executor or administrator shall profit 

by the increase, or suffer loss by the decrease or destruction, 

without his fault, of any part of the estate. 

He must account for the excess when he sells any part 

of the estate for more than the appraisement,

and if any is sold for the less than the appraisement, 

he is not responsible for the loss, if the sale has justly made. 

If he settles any claim against the estate for less than its nominal value, 

he is entitled to charge in his account only the amount he actually paid on the settlement.


Sec. 2: No Profit or Loss from Estate Changes


  • The executor or administrator cannot profit from an increase in estate value or suffer loss from its decrease unless due to fault/negligence.

  • If a sale exceeds the appraised value, the excess must be accounted for.

  • If a sale is below the appraised value, no liability if made justly.

  • The executor or administrator can only charge in accounts the actual amount paid for claims settled below nominal value.



SEC. 3. When not accountable for debts due estate. — 

No executor or administrator shall be accountable for debts 

due the deceased which remain uncollected without his fault.


Sec. 3: Not Accountable for Uncollected Debts

  • The executor or administrator is not responsible for debts due to the deceased that remain uncollected without their fault.



SEC. 4. Accountable for income from realty used by him. —

If the executor or administrator uses or occupies 

any part of the real estate himself, 

he shall account for it as may be agreed 

upon between him and the parties interested, 

or adjusted by the court with their assent; 

and if the parties do not agree upon the sum to be allowed, 

the same may be ascertained by the court, 

whose determination in this respect shall be final.


Sec. 4: Accountable for Personal Use of Estate Property


  • The executor or administrator must account for personal use or occupancy of estate property.

  • The value determined:

    • by agreement with interested parties or 

    • by court decision.



SEC. 5. Accountable if he neglects or delays to raise or pay money. — 

When an executor or administrator neglects 

or unreasonably delays to raise money, 

by collecting the debts or selling the real or personal estate 

of the deceased, 

or neglects to pay over the money he has in his hands, 

and the value of the estate is thereby lessened 

or unnecessary cost or interest accrues, 

or the persons interested suffer loss, 

the same shall be deemed waste 

and the damage sustained may be charged 

and allowed against him in his account, 

and he shall be liable therefor on his bond.


Sec. 5: Liable for Neglect or Delay in Managing Estate

  • The executor or administrator is liable for any loss, unnecessary cost, or interest caused by delay in:

    • collecting debts, 

    • selling assets, or 

    • paying money owed.

  • Such negligence is considered waste and can be charged against the executor/administrator.




SEC. 6. When allowed money paid as cost. — 

The amount paid by an executor or administrator 

for costs awarded against him 

shall be allowed in his administration account, 

unless it appears that the action or proceeding 

in which the costs are taxed 

was prosecuted or resisted without just cause, 

and not in good faith.


Sec. 6: Costs Paid by Executor/Administrator

  • Expenses incurred for legal costs awarded against the executor/admin are chargeable.

  • Exception: If the legal action was unjustified or/and in bad faith



SEC. 7. What expenses and fees allowed executor or administrator. Not to charge for services as attorney. Compensation provided by will controls unless renounced. — 

An executor or administrator shall be allowed 

the necessary expenses the care, 

management, and settlement of the estate, 

and for his services, four pesos per day 

for the time actually and necessarily employed, 

or a commission upon the value of so much 

of the estate as comes into his possession 

and is finally disposed of by him 

in the payment of debts, expenses, legacies,

or distributive shares, or by delivery to heirs or devisees, 

of two per centum of the first five thousand pesos of such value, 

one per centum of so much of such value 

as exceeds five thousand pesos 

and does not exceed thirty thousand pesos, 

one-half per centum of so much of such value 

as exceed one hundred thousand pesos. 


But in any special case, where the estate is large, 

and the settlement has been attended with great difficulty, 

and has required a high degree of capacity 

on the part of the executor or administrator, 

a greater sum may be allowed. 

If objection to the fees allowed be taken, 

the allowance may be re-examined on appeal.


If there are two or more executors or administrators, 

the compensation shall be apportioned among them by the court 

according to the services actually rendered by them respectively.


When the executors or administrator is an attorney, 

he shall not charge against the estate any professional fees 

for legal services rendered by him.


When the deceased by will makes 

some other provision for the compensation of his executor, 

that provision shall be a full satisfaction for his services 

unless by a written instrument filed in the court

he renounces all claim to the compensation provided by the will.


Sec. 7: Expenses and Fees Allowed for Executors and Administrators

  • Allowed Expenses and Compensation

    • Executors/Administrators are entitled to necessary expenses for:

      1. Care, management, and settlement of the estate

      2. Services rendered in estate administration

  • Compensation Options

    • ₱4 per day for actual work done, OR

    • Commission based on estate value:

      1. 2% of the first ₱5,000

      2. 1% of amounts exceeding ₱5,000 up to ₱30,000

      3. 0.5% of amounts exceeding ₱100,000

  • Special Cases for Increased Compensation

    • Higher compensation may be allowed if:

      1. The estate is large

      2. The settlement was extraordinarily difficult

      3. A high degree of capacity was required from the executor/admin

    • If compensation is contested, it may be re-examined on appeal.

  • Distribution of Compensation Among Multiple Executors/Admins

    • If there are two or more executors/admins:

      1. Compensation is apportioned by the court based on services actually rendered

  • Prohibitions on Additional Fees

    • Attorney-executors cannot charge legal fees for services rendered to the estate

  • Compensation Provided in the Will

    • If the deceased specified compensation in the will, it serves as full payment.

    • The executor may renounce this provision by filing a written instrument in court.



Expenses and Fees Allowed the Executor or Administrator

  • De Gala-Sison v. Maddela, G.R. No. L-24584 October 30, 1975:

    • It must be noted that petitioner is seeking as her compensation as administratrix an amount greater than that ordinarily allowed under the rules on the ground that the estate is large, its settlement having been attended with great difficulty (since 1947 or almost 17 years ago) and required a high degree of capacity.

    • In order to entitle the executor or administrator to additional compensation, the estate must be large, the settlement extraordinarily difficult, and a high degree of capacity demonstrated by him. The amount of his fee in special cases under the Rules is a matter largely in the discretion of the probate court, which will not be disturbed on appeal, except for an abuse of discretion."

  • De Guzman v. De Guzman-Carillo, G.R. No. L-29276 May 18, 1978:

    • The expenses of administration of the estate of the decedent were described by the Court:

An executor or administrator is allowed the necessary expenses in the care, management, and settlement of the estate.

He is entitled to possess and manage the decedent's real and personal estate as long as it is necessary for the payment of the debts and the expenses of administration.

He is accountable for the whole decedent's estate which has come into his possession with all the interest, profit, and income thereof, and with the proceeds of so much of such estate as is sold by him, at the price at which it was sold. (Sec. 3, Rule 84; Secs. 1 and 7, Rule 85, Rules of Court).

x x x administration expenses should be those which are necessary for the management of the estate, for protecting it against destruction or deterioration, and, possibly, for the production of fruits.

They are expenses entailed for the preservation and productivity of the estate and its management for purposes of liquidation, payment of debts, and distribution of the residue among the persons entitled thereto."


SEC. 8. When executor or administrator to render account. — 

Every executor or administrator shall render 

an account of his administration

within one (1) year from the time 

of receiving letters testamentary or of administration, 

unless the court otherwise directs 

because of extensions of time for presenting claims against, 

or paying the debts of, the estate, 

or for disposing of the estate; 

and he shall render such further accounts 

as the court may require until the estate is wholly settled.


Sec. 8: When Executor or Administrator Must Render an Account

  • The executor/administrator must submit an account of administration within one (1) year from receiving letters testamentary or of administration.

  • Exceptions: The court may allow extensions for:

    1. Presenting claims against the estate

  • Paying the estate’s debts

  • Disposing of estate assets

  1. Further accounts must be submitted as required by the court until the estate is fully settled.


  • Section 8 of Rule 85 provides that the "executor or administrator shall render an account of his administration within one (1) year from the time of receiving letters testamentary or of administration, and he shall render such further accounts as the court may require until the estate is wholly settled."


  • Estate of Tumang vs. Laguio, G.R. No. L-50277, Feb 14, 1980:

    • The fact that the executrix received funds of the estate after the approval of her final accounts and before the issuance of an order finally closing the proceedings is admitted. She must, therefore, account for the same, in consonance with her duty to account for all the assets of the decedent's estate which have come into her possession by virtue of her office.

    • An executor should account for all his receipts and disbursements since his last accounting.


SEC. 9. Examinations on oath with respect to account — 

The court may examine the executor or administrator 

upon oath with respect to every matter 

relating to any account rendered by him, 

and shall so examine him as to the correctness 

of his account before the same is allowed, 

except when no objection is made 

to the allowance of the account 

and its correctness is satisfactorily established

by competent proof. 

The heirs, legatees, distributees, and creditors of the estate

shall have the same privilege as the executor or administrator 

of being examined on oath 

on any matter relating to an administration account.


Sec. 9: Examination on Oath Regarding the Account

  • The court may examine the executor/administrator under oath regarding:

    1. The accuracy of their submitted account

    2. Any matter relating to estate administration

  • The court must conduct this examination before approving the account, unless:

    1. No objections are raised

    2. The account’s correctness is proven with competent evidence

  • Heirs, legatees, distributees, and creditors have the same right to be examined under oath.



SEC. 10. Account to be settled on notice. — 

Before the account of an executor or administrator is allowed, 

notice shall be given to persons interested

of the time and place of examining and allowing the same; 

and such notice may be given personally 

to such persons interested 

or by advertisement in a newspaper or newspapers, 

or both, as the court directs.


Sec. 10: Notice Requirement Before Settlement of Account

  • Before approving an executor’s/admin’s account, notice must be given to interested parties.

  • Notice may be provided:

    1. Personally to concerned individuals,

    2. Via newspaper advertisement 

    3. or both, as directed by the court


  • The instances when notice has to be given to interested parties are provided in:

    1. Section 10, Rule 85 – in reference to the time and place of examining and allowing the account of the executor or administrator.

    2. Section 7(b), Rule 89 – concerning the petition to authorize the executor or administrator to sell personal estate, or to sell, mortgage, or otherwise encumber real estate.

    3. Section 1, Rule 90 – regarding the hearing for the application for an order for distribution of the estate residue.

After all, even the administratrix has acknowledged in her submitted inventory the existence of the pending cases filed by the petitioners.




SEC. 11. Surety on bond may be party to accounting. — 

Upon the settlement of the account 

of an executor or administrator, 

a person liable as surety 

in respect to such account may, 

upon application, be admitted as party to such accounting.


Sec.11: Surety May Participate in Accounting

  • A surety — a person who guaranteed the executor’s/admin’s bond)may:

    1. Apply to become a party in the accounting proceedings

    2. Be admitted as a participant in the settlement of the executor’s/admin’s account

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