Rizal Philippines
September 28, 2017
Dear Customer
THANK YOU AND CONGRATULATIONS
_______________ ___________ ________________
_______________ ___________ ________________
7. Debts and Liabilities
Thank you for purchasing a Holy Gardens Group Memorial Product (Plots, Plan, Interment Service) . You just have completed an important strategy in the preservation of your assets (estate) for the next generation. By buying the products and services needed for your memorialization, you have assured that the assets you leave for you heirs will not be diminished. You have also diminished their head aches and difficulties that accompany the loss of a loved one
You studied, had a family, worked hard to provide for your family. You accumulated assets so that later on you will leave your children and heirs with an estate (wealth) with financial asset so that they will not experience any difficulty and have a good life when you depart for good.
NO NEED TO LEAVE A LEGACY OF PROBLEMS AND HEADACHES
But what if there are accidents or the unexpected happen? Instead of leaving our families with financial security and peace of mind, we leave them with heart aches(with our demise) and head aches (with the debts, and legal and tax arrangement to put our assets in order
What happens upon death? Even our little money in the bank cant be withdrawn. they can be upon payment of estate tax. If our family does not have cash, they will not even have cash to pay for the food during the wake, nor pay for the funeral service, interment service, and the plots
MOST, MAJORITY OF FAMILIES DO NOT KNOW, or are ill prepared to handle this event.
ESTATE PLANNING
Thus we are furnishing you tips and other advise on estate planning.
What is your estate?
Your estate is the sum total of your valuable earthly possession: cash, receivables, investment (shares of stocks, club shares, business, real properties (house lots,) and personal properties (jewelry, shoes, bags, clothes) which can passed on to heirs
What is estate planning?
To be very blunt about it, estate planning is preparing for our death. It means making sure our assets are organized, and the arrangements are clear and in place upon our death; that the estate is preserved (rather than consumed by taxes and penalties) and escheat (the govt taking ownership of your estate)
STEPS AND STRATEGIES IN ESTATE PLANNING
Prior to any strategy or plan of preserving your estate, you have to organize your records and documents:
1. Your personal records:
Name______________________ Address ___________________
Birth date__________________ Birthplace ________________
TIN #______________________SSS/GSIS number ____________
Philhealth No ______________ HDMF #____________________
2. List of professionals who handle your estate:
Name Address Phone Number
Lawyer _________________ __________________ ______________
Accountant_____________ __________________ ______________
Insurance Agent _________ __________________ _____________
3. Bank Accounts
Bank/Branch Account type Account Number
___________________ _________________ __________________
___________________ _________________ ___________________
___________________ _________________ ___________________
4. Insurance
Company Type Amount Policy Number
_________________ __________ _____________ ____________
_________________ _________ _____________ ____________
_________________ _________ ______________ ____________
_________________ _________ ______________ ____________
5. Real Property
TCT Number Location Area Est. Market Value
____________ _________ _________ _______________
____________ _________ __________ ________________
____________ _________ _________ _______________
____________ _________ __________ ________________
____________ _________ __________ ________________
6. Shares of Stocks
Company Number Market Value (from PSE) as of
_______________ ___________ ________________
_______________ ___________ ________________
6. Motor Vehilces
Type Model Year CR Number Lto Branch Estd.Worth
_______ _____________ __________ ___________ ________
_______ _____________ __________ ___________ ________
_______ ____________ ___________ ___________ ________
7. Debts and Liabilities
Bank Lender Amount Date Incurred Status(Current/Arrears
______________ __________ ____________ ___________________
______________ __________ ____________ ___________________
______________ __________ ____________ ___________________
8. SALN (Statement Assets and Liabilities) As of ______________
Cash Other Near Cash Php _____________________
Receivables Php _____________________
Real Property Est Php _____________________
Shares of Stocks Est Php _____________________
Motor Vehicles Est Php ______________________
Other Personal Properties Est Php ______________________
TOTAL ASSETS Php _________________________
LIABILITIES AND NETWORTH
Liabilities
Bank Loans Php _______________________
Trade and other indebtedness Php _______________________
Networth
(Total Assets- Liabilities) Php _________________________
TOTAL Php _________________________
_______________________________________________________________
Under the train law, estate tax is only 6%. Allowable deduction for estate over Million.
Up to P10 million on the house, P500,000 standard deduction. No longer allowed deduction
on funeral, medical, judicial and legal...
Estate tax may be made on installment for a period of 2 years
Up to P10 million on the house, P500,000 standard deduction. No longer allowed deduction
on funeral, medical, judicial and legal...
Estate tax may be made on installment for a period of 2 years
A. Objectives:
The objective of your estate planning strategies are:
1. To give ease and convenience to your loved ones to use the assets you earned and saved for them upon your demise.
2. To save on the payment of estate tax which could be 20% of the total market value (zonal valuation of your property); and the transfer tax: 0,75% of 1%, doc sci- 1.5% of zonal valuation
Some strategies: (from Estate Planning 101)
1. Donation
You can donate in bulk or over a period of time to your heirs.It is zero rated for cash if the amount is P100,000 or less.Donors tax is 12% which is 8% lower than 20%
You can do a simulated sale to your children or other heirs to save further and you only pay 6% CGT + 1.5% doc sci stamps based on zonal valuation + 0,.75% of 1% of Land Transfer Tax or about 8.25% or 3.75% cheaper than donors tax.
However, if your heirs die ahead of you,you will still pay the estate tax.
2. Executing a last will and testament
The principal specifies the assets to specific heirs,thus lessening the squabbles and quarrels among heirs (as in the case of self adjudication). A probate court or an administrator is appointed to preserve the assets (as in the case of rental properties, where rents are collected and deposited in an account, repairs are made employees are paid their wages). However there is no savings in payment of estate tax.
3. Transferring the real properties in the name of corporation
The principal and the heirs to be establishes a real estate company where assets are exchanged for shares of stock A BIR approval is needed for tax free transaction (which takes time) However. this strategy costs only 8.25% of zonal valuation,11.75% less than estate tax, and 3.25% less than a donation. Xosts the same as a simulated sale
4. Executing a living trust
This is a little bit complicated and requires the services of an established law firm,(or non bank trust) or bank trust. A fee is charged by either a lawyer or the bank's trust department (between 3 to 5%)
Here a living trust document is executed by the Trustor (the principal) through a Trustee (the law firm or the bank) in favor the beneficiary (the heir).
A portion of the estate is sliced off, and sold to the trust which executes the will.
The principal who is still alive wills the said property to the beneficiary (the name of the asset may be transferred in favor of the beneficiary (to save on taxes) or not (this latter tactic is safe for the Trustor) While the property or asset has been willed unto the heir, the actual control and enjoyment of the fruits of the assets (as dividends and rental) remain with the Trustor
5. Investing in Insurance and Life Plans
A life insurance is bought for two reasons
1. to secure the earning capacity of the insured; sothat the children and wife and other heirs go hungry; and
2. to protect the insured estate upon his demise (so that the family will not be burdened by estate tax.
Thus if the insured has estate is estimated to be worth P1,000,000, he must have insurance of at least:
P15,000 for the first 500,000 and 8% for the succeeding (8% x 500,000)= 40,000 = P55,000.00 insurance (endowment, full life or VL)
6. Setting up a FOUNDATION
The foundation, a tax exempt non stock corporation established for humanitarian,religious, charitable,educational,scientific,sports purposes may be established and approved by BIR. All donations,(even in excess of the 3% limit)shall be allowed and exempted from donors tax and donees tax. The family assets: real properties and shares are donated to the foundation. The foundation now controls the corporation.The heirs sit as Trustees of the corporation. The Trustees elect the Board of the Corporation which the foundation owns.And they elect themselves to the Board.
A bank here,Ford Rockefeller Foundation, used this as a strategy
7. Investing in life plans,memorial park plots and services
It is very costly to live,.
Even more so to get sick (The MDs and new doctors hospital charge top money for the best medical care you can get. Dialysis,MRI, CAT scan and other laboratory procedures, chemotherapy, surgery are expensive
It also costs money to be brought to final resting place.
Say plot - P100,000.00
Interment Service 23,000.00
Funeral Service (Metal) 60,000.00
Total 183,000..00
These are bought separately from different companies.
They can be bought pre need from various companies, to further preserve the estate (hindi na mabawasan ang mamanahin ng maiiwan) Kasi nasagutan na ang libing>
They may be bought at one stop shop (like Holy Gardens Group) where they can be bought on low monthly payments, low interest, no down payment, and special prices during promo. There is even triple benefit insurance: CGLI, Persoanl Accident Insurance + Disability during the paying period to protect the principal, in case of accident or natural death
WHAT TO DO IN CASE OF DEATH?
Prior to this, in case the principal is in the hospital
a. He must sign blank withdrawal slips
b. Or blank deed of sale (for simulated sale; may 30 days to do this)
1. The heirs must have access to the basic information mentioned here and where the documents are kept (say vault in the house or safe deposit box in the bank
2. Notify the creditors:
1. Credit card companies
2. Telco
3. But not yet the bank. You may still use the authorization for the wake expenses or funeral service. Just to have clear conscience on this, you may wish to withdraw from the bank accounts
4. Secure the Death Certificate from your attending physician/hospital, or Municipal Health Officer
Secure burial permit from the City Municipality where you intend to bury the deceased
5. Secure the services, notify the memorial park (where you have the plots) go to the munispyo to get interment from the municipal cemetery, or buy at need plot at memorial park nearest you (more expensive by 20%)
6. Notify SSS/GSIS/HDMF
You may wish to avail of death benefit from SSS or GSIS (which has been increased to P40,000 per member at SSS, and P30,000 at GSIS
7. Notify insurance companies
8. Settle the estate among the heirs
1, Find the original TCTs, OR CR of vehicles, pass books
2. Meet the lawyers: or bank trust company with the heirs
1. To execute the probate will - (for the last Will and Testament)
2. For the living trust execution (to transfer full control of the estate to the beneficiary (heir)
3. Or self adjudication (Extra judicial partition)
a. Straight
b. With sale
c. With waiver of rights (the sample forms are here)
4. Make the necessary publication if needed;
5. Pay the estate taxes or other taxes that may be required;
Land Tranfser Tax
6. Register the transfer to the heirs at the Register of Deeds where the property is located.
7. Deliver the titles to the heirs; have them properly receive the Title to the properties
SETTING THE STANDARDS IN INTERMENT SERVICE
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