Basics of Estate Planning
By: Arlen O. Macaspac
One of the process involved in total personal finance is estate planning. Just like life insurance and retirement planning, estate planning activity is yet to be dutifully explored by majority of Filipinos.
Estate planning is the process of preparing ones asset for proper distribution so that properties will be ensured to be properly organized and allocated to a person’s desired beneficiaries. It is an unbroken planning process so that the people you left behind upon your death will be alleviated from the financial impact that may result from your demise. This is usually documented and simplified in a form of a “will”. A will is a written document signed by the estate owner which generally states all the instructions on what to do and who to inherit his properties so that everything will be properly set upon his disability or passing away. The most important factor in estate planning is making sure that you don’t die without a will. Dying without a will, called intestate is the main reason why families have to go to another process called probate to claim ownership of your assets. These sometimes lead family members to fight ownership over your assets. Another drawback of dying without a will is that the state government will have the power on how your assets will have to be passed to your heirs and the risk is that it may become the property of the government if no relatives will fit into the succession formula.
An estate comprises all the belongings and wealth of a person which includes real estate properties, businesses, stocks, establishments, buildings, cash, jewelries, and collections, and even retirement and life insurance benefits…
You can start your estate planning by listing all your assets and liabilities. You can also review your beneficiaries on your life insurance policies and check if they are “irrevocable” so that they don’t become part of the estate tax computation. It is also practical to start planning the distribution of your asset so that everything will be settled when your time comes to an end. Review the estate tax guidelines which can be seen at the BIR website. Consult a professional Estate Planning Lawyer and a Registered Financial Planner for a comprehensive financial planning approach.
For comments, financial finance and estate planning consultation, you can email me at email@example.com or visit my website at www.investopinoy.com.