In the Philippines, we pronounce the word “estate” with the accent on the first syllable. The correct pronunciation is one where the accent is on the second syllable. And when said in a quick fashion, estate will sound like state when pronounced correctly.
That is exactly what happens when you don’t plan for your estate way ahead of time. The state will just apply the one-size fits all laws of intestacy (dying without leaving a valid will), which may not be to your liking and, which may not avail of the optimum tax savings benefits.
The great majority of income-earning individuals should consider planning their estate. For one, net estates valued at over Php200,000 are already subject to estate tax. Second, the Bureau of Internal Revenue is tightening on the application of estate taxes.
But what is net estate to begin with? Net estate simply refers to the amount of assets you will leave behind, after being called from this life less the allowable deductions. Some of these allowable deductions are as follows:
The answer is that the state is a passive partner in helping you to create your wealth. To some, the answer may still not be enough. But that is the law.
But more than just paying taxes, the equitable disposition of assets to heirs is the bigger issue when it comes to passing on wealth. How many stories have we read on the newspaper or heard from our neighbor about relatives fighting over their inheritance? Such news would be enough to make the deceased turn in their grave.
Still, I cannot overemphasize how intricate estate planning is. While reading a book or even this blog will make you informed, it will not give you the expertise of an estate planner who has dealt with countless settlement cases. My advice, consult the expert.
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