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Thursday, October 23, 2014

If A Person Is Missing For Several Years When Is He Presumed Dead For Inheritance Purposes?

If A Person Is Missing For Several Years When Is He Presumed Dead For Inheritance Purposes?

by: Mark Joseph T. Fernandez, CPA, RFC, MDRT
Financial Advisor

One of my favorite movies, Taken will be out by January 9, 2015. The movie shows how Liam Neeson who is an ex-secret agent tries to track down his daughter and wife who were kidnapped (taken).

Question popped out of my mind. What if someone gets missing for several years? Does the law provide for a presumption of death if the person is missing for several years? Here is what the Civil Code Provides regarding presumption of death:

Art. 390. After an absence of seven years, it being unknown whether or not the absentee still lives, he shall be presumed dead for all purposes, except for those of succession.
The absentee shall not be presumed dead for the purpose of opening his succession till after an absence of ten years. If he disappeared after the age of seventy-five years, an absence of five years shall be sufficient in order that his succession may be opened. (n)
Art. 391. The following shall be presumed dead for all purposes, including the division of the estate among the heirs:
(1) A person on board a vessel lost during a sea voyage, or an aeroplane which is missing, who has not been heard of for four years since the loss of the vessel or aeroplane;
(2) A person in the armed forces who has taken part in war, and has been missing for four years;
(3) A person who has been in danger of death under other circumstances and his existence has not been known for four years. (n)
Art. 392. If the absentee appears, or without appearing his existence is proved, he shall recover his property in the condition in which it may be found, and the price of any property that may have been alienated or the property acquired therewith; but he cannot claim either fruits or rents. (194)
Source: Philippine Civil Code
Thus, for inheritance purposes you should remember 10, 5 or 4 years. After these number of years the person is presumed dead depending on the how the person disappeared.

Wednesday, October 15, 2014

Saving For Your Child's Education

By: Mica Austria

They say that education is the greatest inheritance that you can give to your children. How prepared are you for your child’s education? How much are you willing to sacrifice today to give your child a brighter future?

Although I am not yet parent, I have seen how the lack of education planning can cause your child’s future to be derailed. Thankfully, me and my three siblings were able to get scholarships. If not we simply can’t afford paying for our tuition fees.

But, what if we didn’t have scholarships? I’m pretty sure we wouldn’t be able to finish our schooling. I can’t even imagine where we will be by now had we not finished our studies. Even with the scholarship grant I had, it was hard still hard for me. There were other expenses that were not covered by my scholarship grant. Honestly my schooling was really a struggle that when I look back, I believe that it was only by the grace of God that I was able to finish schooling.

I believe every parent loves their child and wants them to see their dreams come to life. And any good parent will be willing to sacrifice even their own personal goals just to see their children achieve their dreams. Here a few steps that you can do to start planning for your child’s education:
  • Know which university you would want your child to go to college
  • Project the possible tuition fee at the time he will go to college
  • Start investing (Plan A)
  • Start protecting (Plan B)

 To illustrate, let’s say I have a child who is 3 month old. I would want my child to graduate from De la Salle University. As of today the range of tuition fee in this school is P177,000 to P210,000. Let’s get started:
  • De la Salle University
  • Let’s Say The Average Tuition fee per year is P193,500=((177,000+210,000)/2)
  • Average Tuition increase=9.03%*
  • Future Value after 16 years, just in time for my child’s college education:

Year 1
   P    917,295.34
Year 2
Year 3
Year 4
  P 4,196,766.22

After 16 years, I would need to have around P4.2Million. That’s a large amount of money right! And if you don’t start saving for it now, then you will be having a hard time reaching such goal.

Insular Life offers a product that would help parents prepare for their child’s education. This is what we call, Wealth Secure/ Assure Education. The following are the features of this product:
a.        Flexible Payment terms. You have the option to pay quarterly, semi-annually or annually. Further, the amount that you would invest will depend on the amount you need in the future or the amount that you can invest at the moment.
b.       High rate of return. As of October 15, 2014, equity fund of Insular Life has a 23.38% annual rate of return.
c.        Contingency in case of loss (Plan B). In case something happened to parent, I am insured by P4Million in which my child will get should something happen to me. Hence, even in my death I am assured that my child would achieve his goals.
d.       Very affordable premiums. You can start saving for your child’s education for as low as P20,000 per year.

Based on the illustration above, in order to be prepared with the education of my child I need to save P200,000.00 per year for a minimum of 10 years.  Here are the details:


Premium payment
No. of years to pay
10 years

Investment value at age 18 at 8% return on investment
Less: Amount of education fund need
P    466,332.39
Insurance Coverage**

*The excess amount can be used for other purposes beneficial for the child.
** In case something happened to parent, I am insured by P4Million in which my child will get should something happen to me. Hence, even in my death I am assured that my child would achieve his goals. (Plan B)

As a parent who loves his child, it is always wise to start saving early to secure the education of your child. After all, its your greatest inheritance to them.

Start saving early and reap abundant rewards. LOVE COMPELS ACTION.

Request for Free Customized Proposal based on your needs here by clicking here: Proposal Request Form

Monday, October 13, 2014


by: Noriel De Ocampo, CPA

You should file your income tax return, if:
You are a Filipino citizen living in the Philippines, receiving income from sources within or outside the Philippines, and if—
·         You are employed by two or more employers, any time during the taxable year.
·         You are self-employed, either through conduct of trade or professional practice.
·         You are deriving mixed income. This means you have been an employee and a self-employed individual during the taxable year.
·         You derive other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax.
·         You are married, employed by a single employer, and your income has been correctly withheld—the tax due is equal to the tax withheld—but your spouse is not entitled to substituted filing.
·         You are a marginal income earner.
·         Your income tax during the past calendar year was not withheld correctly—if the tax due is not equal to the tax withheld.
You are a non-resident citizen—if you are a Filipino who works or resides abroad—receiving income from sources within the Philippines. (You are taxable only for the income you earn from the Philippines.)
You are not a Filipino citizen but you receive income from sources within the Philippines, regardless of your residency. (You are taxable only for the income you earn from the Philippines.)
*Also required to file their ITRs: Domestic corporations (including partnerships) receiving income from sources within and outside the Philippines. Foreign corporations (including partnerships) receiving income from sources within the Philippines. Estates and trusts engaged in trade or business.

You are not required to file an income tax return, if:
·         You are a minimum wage earner.
·         Your gross income (total earned for the past year) does not exceed your total personal and additional exemptions.
·         Your income derived from a single employer does not exceed P60,000 and the income tax on which has been correctly withheld.
·         Your income has been subjected to final withholding tax.
·         You are qualified for substituted filing. Requirements:
o    You are employed by a single employer during the taxable year.
o    You earn purely compensation income from that single employer.
o    Your tax due at the year’s end equals the tax withheld by the employer.
o    If you are married, your spouse also complies with the above conditions.
o    Your employer files the annual information return (BIR Form No.1604-CF).
o    Your employer issues BIR Form No.2316 to every employee.

You are exempt from filing income tax returns if:
·         You are a non-resident citizen who is:
o    A Filipino citizen not residing in the Philippines, but who has established with the BIR that you wish to remain living outside the country.
o    A Filipino citizen who leaves the Philippines during the taxable year to reside abroad, either as an immigrant of for permanent employment.
o    A Filipino citizen who works and earns income abroad.
o    A Filipino citizen previously considered a non-resident citizen.
·         You are an overseas Filipino worker whose income is derived solely from sources outside the Philippines.
·         If you are Filipino citizen working as an overseas seaman, your vessel must be engaged exclusively in international trade.

When you don’t pay your taxes or when you don’t file an income tax return (or do it the wrong way, or whatever), you are charged with:

Tax evasion — When an individual or a corporation wilfully uses illegal means to avoid paying taxes or the right amount of taxes. Tax evaders will be fined no less that P30,000 pesos but no more than P100,000, and suffer imprisonment of no less than two years but no more than four years.

Failure to file return, supply correct and accurate information, pay tax withhold and remit tax and refund excess taxes withheld on compensation — In addition to other penalties a fine of not less than P10,000 and imprisonment of not less than one year but not more than ten years will be imposed.  Any person who falsifies filing return or statement, or actually files a return or statement and subsequently withdraws the same return or statement after securing the official receiving seal or stamp of receipt of internal revenue office wherein the same was actually filed shall be fined not less than P10,000 but not more than P20,000 and suffer imprisonment of not less than one year but not more than three years.