Short answer. Yes — the estate's debts and charges are deducted first, and the legitimes are computed on what is left. But charges your father imposed in the will itself are not deducted. A testator cannot shrink the compulsory heirs' legitime by writing burdens into his own will.
What the law says
To determine the legitime, the value of the property left at the death of the testator shall be considered, deducting all debts and charges, which shall not include those imposed in the will.
Civil Code, Article 908 — Computing The Net Estate. Read the full provision →
The order of computation
Start with the property your father actually owned when he died, valued as of the date of death. From that gross figure you subtract the estate's genuine liabilities — unpaid loans, taxes, the funeral and last-illness expenses, and other obligations enforceable against him. What remains is the net hereditary estate. Only that net figure is used to work out the legitime, the portion the law reserves for compulsory heirs. Deducting the debts is therefore not a favour to the estate; it is the first step the Code requires before anyone's share can be measured at all.
Why charges written into the will do not count
The exclusion is deliberate. If burdens written into the will were deducted, a testator could reduce his children's legitime simply by loading the will with legacies, conditions and expenses, and the reserved portion would mean nothing. So the law separates two kinds of charge: obligations that existed independently of the will, which come off the top, and burdens the testator himself created in the will, which do not. Those testamentary charges are paid out of the free portion — the part he was entitled to dispose of. If they exhaust it, they are reduced, not the legitime.
Lifetime donations are added back
Subtraction is only half the exercise. To the net value of the estate you add back the value of donations your father made during his lifetime that are subject to collation, taken at the value they had when he made them, not at today's prices. This prevents a parent from emptying the estate by giving property away before death and leaving the compulsory heirs a shell. A child who already received such a donation is generally credited with it against his share, so collation adjusts who gets what rather than enlarging the estate.
What the rule does not settle
This rule fixes the arithmetic; it does not settle the disputes that usually surround it. It does not tell you whether a claimed debt is real, whether a loan was genuinely your father's or the family business's, or what the property was worth on the day he died — all of which are proved with documents, not assumed. Nor does it decide which lifetime gifts are collationable. If the executor's figures leave the legitime short, the remedy is to contest the valuation and the deductions in the settlement proceeding, and to ask for the excessive dispositions to be reduced.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Pablo Uy, substituted by his heirs, namely: Mylene D. Uy, Paul D. Uy, G.R. No. 227460, December 5, 2019 — read the decision on LawPhil →
- Spouses Bernardo Buenaventura, et al. vs. Court of Appeals, et al, G.R. No. 126376, November 20, 2003 — read the decision on LawPhil →