Calculator and property documents representing estate accounting by a managing heir

Heirs’ Right to an Accounting: Estate Money, Expenses and Court Action

ByCivilLaw.PH Editorial Team

Direct answer: Yes. When one heir collects rent, controls estate bank funds, handles a sale or pays estate expenses, the other heirs can demand a full accounting. Articles 500 and 1087 of the Civil Code require co-heirs to account to one another for income and fruits received, necessary and useful expenses, and damage caused by malice or neglect. Start with a written demand. If the managing heir refuses, ask the court for an accounting, usually together with partition or estate settlement.

Key takeaways

  • Managing estate money is not owning it. The managing heir holds the other heirs’ shares and must account for them.
  • Articles 500 and 1087 make mutual accounting part of partition: income and fruits in, necessary and useful expenses out.
  • Estate money may pay legitimate estate costs such as taxes, preservation and settlement expenses. It may not fund one heir’s personal needs.
  • Deductions from sale proceeds must be documented and shown in a net-proceeds statement. Unilateral, undocumented deductions can be disallowed.
  • You can demand an accounting before partition. You do not have to wait.
  • If a written demand fails, the court can order an accounting in a partition case under Rule 69, in estate proceedings, or in a separate action.

What an accounting should show

An accounting is a written report of everything the managing heir received and paid, backed by documents. A useful accounting covers:

  • all rent and other income received;
  • bank deposits and withdrawals from the decedent’s or estate accounts;
  • real property tax, estate tax and mortgage payments;
  • repairs and maintenance;
  • sale deposits and sale proceeds;
  • professional, notarial and settlement expenses;
  • amounts already given to any heir; and
  • remaining cash and unpaid liabilities.

Each entry should have a date, amount, payee or payor, and a supporting document. A list of round figures with no receipts is not an accounting.

The managing heir does not own the money

Management and ownership are different. Before partition, the heirs own the estate in common. A co-heir who collects common income must account for the others’ shares, subject to legitimate expenses and the final determination of each heir’s share.

Incomplete or missing records

Ask for source documents: bank statements, leases, rent receipts, tax receipts, repair invoices, titles and sale contracts. Banks, lessees and the local treasurer can often supply copies. In litigation, the court can use discovery tools and order a court-supervised accounting, sometimes with a commissioner.

Management fees

A managing heir may charge a fee only if there is a legal basis, an agreement among the heirs, or a court order. A fee invented after the fact, once the others ask for records, is usually disallowed.

Using estate money before the estate is settled

An heir should not treat estate cash or income as personal money before the estate is properly administered or distributed. Estate money must be preserved, used only for legitimate estate purposes with proper authority, and accounted for. Personal withdrawals can lead to reimbursement, accounting, breach-of-duty or even fraud claims.

What counts as estate money

Estate money includes cash owned by the decedent, proceeds from sale of estate assets, rent from estate property, refunds, dividends and other income that belongs to the estate before final distribution.

Allowed uses and risky uses

Generally allowed, with authority and receipts Risky or improper
Estate tax and real property tax Personal living expenses of the heir
Necessary repairs to preserve estate property Using rent without accounting to co-heirs
Funeral and last-illness expenses, where properly chargeable Selling property and keeping the proceeds
Administration and settlement costs, including notarial and publication fees Paying favored heirs before debts and expenses are resolved
Payment of valid estate debts Mixing estate money with a personal account

The key is authority and documentation. Where there is a court-appointed administrator, Rule 85 of the Rules of Court makes the administrator accountable for the whole estate and requires periodic accounts to the court. Where the heirs are settling out of court, they should agree in writing on which expenses may be paid from common funds.

Records to keep

Keep a dedicated ledger showing the opening balance, every receipt, every payment, the supporting document and the running balance. A separate bank account for estate funds is safer, and it is expected where there is formal administration.

When all heirs agree

An agreement among all heirs to use estate money helps, but it must still respect creditors, taxes, compulsory heirs’ legitimes and any court order. Money used improperly can be charged against the heir who took it, in the accounting or through other court relief. Money spent to preserve estate property can be legitimate, but its necessity and amount must be documented.

Deducting expenses before sharing sale proceeds

Legitimate estate or common-property expenses can be deducted before net sale proceeds are shared. But one heir should not make undocumented, unilateral deductions. The safest approach is a written net-proceeds statement showing the sale price, authorized expenses, reimbursements, liabilities and the net amount due to each heir.

Deductions compared

Usually legitimate Not deductible automatically
Unpaid taxes and transfer charges borne by the sellers Personal travel or living expenses
Valid mortgage payoff Unapproved luxury improvements
Broker commission or authorized selling costs Unsupported management fees
Necessary repairs agreed for the sale Old family loans with no proof
Documented advances reimbursable to an heir Penalties caused by one heir’s own unjustified delay
Other estate obligations due before distribution Expenses already paid from rent collected

Improvements and reimbursement

Improvements are not always reimbursed at full cost. Under Article 1087, co-heirs reimburse one another for useful and necessary expenses. Consent, necessity, usefulness and the value actually added to the property affect how much can be charged. Under Article 488, each co-owner may compel the others to share in the expenses of preservation and in taxes. See reimbursement for improvements.

Handling disagreements

Disputed deductions can be set aside in escrow or reserved, not secretly withheld. The heirs can then resolve them by mediation, accounting, partition or judicial settlement, depending on the estate’s status. How the buyer pays, whether to each heir or to one account, depends on the settlement and sale documents. What matters is that the proceeds are traceable and shared according to legal ownership and the agreed accounting.

Bringing an accounting action between heirs

If one heir controls estate money, rent, sale proceeds or expense records and refuses to disclose them, the other heirs can ask the court for a judicial accounting. It is usually combined with partition, judicial settlement or an ownership action rather than filed as an isolated dispute.

Steps before filing

  1. Send a written demand. List the records wanted and give a reasonable deadline, such as 15 days. Keep proof of delivery.
  2. Try voluntary reconciliation. Barangay conciliation may be required if the heirs live in the same city or municipality, under the Katarungang Pambarangay rules of the Local Government Code.
  3. Gather your own evidence. Collect whatever records you can get independently.
  4. Choose the vehicle. Decide whether accounting belongs in a partition case, an estate proceeding or a separate action.

When court action is needed

Court action becomes important when records are withheld, amounts are disputed, assets are being spent down, or partition cannot be finished without knowing who owes whom.

Accounting inside a partition case

Rule 69, Section 8 of the Rules of Court lets a party in a partition case recover from another party his just share of the rents and profits that party received from the property, and the judgment must include an allowance for them. Together with Articles 500 and 1087, this lets the court settle money issues between co-owners in the same case. If there is a judicial estate proceeding, the court handling it can require accounts from the administrator under Rule 85.

Evidence to prepare

  • bank statements and deposit slips;
  • leases and rent receipts;
  • tax and repair receipts;
  • sale documents and the deed of sale;
  • written demands for records and any replies; and
  • proof of each heir’s share, such as birth certificates and the settlement or will.

Choosing the forum

Situation Where accounting is sought
Heirs are co-owners and want to divide Partition case under Rule 69
Estate is under judicial administration Estate proceeding; administrator accounts under Rule 85
Property already divided, but money was kept Separate action for accounting and collection of sum of money
Money is being dissipated Main case plus a request for provisional relief such as injunction

For choosing among remedies, see the inheritance remedy guide.

Worked example: the Reyes apartment in Quezon City

Aling Teresa Reyes died on February 14, 2022. She left a four-door apartment in Quezon City earning ₱15,000 per door per month, and ₱800,000 in a savings account. Her heirs are three children: Jun, Carlo and Bea. Jun managed everything.

  • Rent: From March 2022 to February 2026, 48 months at ₱60,000 is ₱2,880,000.
  • Bank: Jun withdrew the full ₱800,000. Receipts show ₱180,000 for estate tax, ₱40,000 for real property tax and ₱120,000 for roof repairs. He cannot document ₱460,000.
  • Sale: In March 2026 the property sold for ₱9,000,000. Jun deducted ₱450,000 broker commission, ₱540,000 capital gains and transfer costs, and a ₱300,000 “management fee” no one approved.

Carlo and Bea send a written demand on April 6, 2026, then file a case for accounting and partition of the proceeds. The court is likely to allow the documented taxes, repairs, commission and transfer costs, and to disallow the undocumented ₱460,000 and the unapproved fee.

Item Amount
Total received (rent + bank + sale) ₱12,680,000
Less allowed expenses (₱180,000 + ₱40,000 + ₱120,000 + ₱450,000 + ₱540,000) ₱1,330,000
Net to share ₱11,350,000
Each heir’s one-third about ₱3,783,333

Jun must account for the full ₱11,350,000 and pay Carlo and Bea their shares. The ₱460,000 and the ₱300,000 fee are charged to his own share, not the others’.

Authority What it says How it applies
Civil Code, Art. 485 Co-owners share benefits and charges in proportion to their interests Rent and expenses are split by hereditary share
Civil Code, Art. 488 Each co-owner may compel the others to contribute to expenses of preservation and to taxes Taxes and preservation costs are shared
Civil Code, Art. 500 On partition, co-owners mutually account for benefits received and reimburse expenses Accounting is part of partition
Civil Code, Art. 1087 In partition, co-heirs reimburse one another for income and fruits, useful and necessary expenses, and damage from malice or neglect Core rule for estate accounting between heirs
Rules of Court, Rule 69, Sec. 8 In partition, a party recovers his just share of rents and profits received by another party; the judgment includes an allowance for them Accounting can be ordered in the partition case
Rules of Court, Rule 85 Executor or administrator is accountable for the estate and must render accounts Applies when the estate is under judicial administration

Frequently asked questions

Can heirs demand an accounting from the heir managing the estate?

Yes. Any co-heir may demand that the heir who collected rent, controlled bank funds or handled a sale account for every peso received and spent. Articles 500 and 1087 of the Civil Code require mutual accounting among co-heirs. Begin with a written demand listing the records you want, then go to court if the managing heir refuses.

Can an heir use estate money before the estate is settled?

Only for legitimate estate purposes, such as taxes, preservation, settlement costs and valid debts, with authority and receipts. Estate money cannot be used for an heir’s personal needs. Improper withdrawals can be charged against that heir’s share in the accounting, and serious cases may also support claims for breach of duty or fraud.

Can one heir deduct expenses before sharing sale proceeds with the others?

Only legitimate, documented expenses, such as taxes, mortgage payoff, broker commission and agreed repairs. The heir should give everyone a net-proceeds statement with receipts. Unapproved management fees, personal expenses and unsupported old loans should not be deducted. Disputed items should be reserved, not secretly withheld, until the heirs agree or the court decides.

How do you bring an accounting action between heirs?

Send a written demand and try to settle, including barangay conciliation if required. If that fails, file a case in court. Accounting is usually joined with partition under Rule 69, or sought in the estate proceeding if there is one. Prepare bank records, leases, receipts, sale documents and proof of each heir’s share.

Can an heir demand an accounting before partition?

Yes. There is no need to wait for final partition if estate income is being collected and records are needed to protect the common rights. An early demand also preserves evidence while bank and tenant records are still easy to get, and it can be used later in the partition case.

Can the managing heir charge a management fee?

Only with a legal basis, a written agreement among the heirs, or a court order. A fee claimed only after the other heirs ask for records is likely to be disallowed. Without an agreement, the managing heir is generally limited to reimbursement of documented necessary and useful expenses.

What if the managing heir refuses to give records?

Send a formal written demand with a deadline and keep proof of receipt. If the heir still refuses, file for accounting, usually with partition. The court can compel production of documents, subpoena banks and tenants, and appoint a commissioner. Where money is being dissipated, ask for provisional relief such as an injunction.

Editorially reviewed: September 24, 2026.