Basic Estate Planning

 Estate Planning – the orderly _______ of _______ so as to attain _______ and _______
during one’s lifetime, and to _______ for those entitled to one’s _______ and enjoying
one’s _______, in a legally _______ and _______ manner.

 The Need for Estate Planning

o Provide for the _______
o Minimize _______
o Maximize _______
o Assure _______
o Protect _______against
o Avoid _______

 The plan made for you by law:

o First Class Heir: _______
 _% of _______ ( consider _______)
o Second Class Heir: _______
o Third Class Heir: _______ - (_______ Law)
 Limited to _______
 Flows like _______
 The _______ excludes _______
 _______ among members of the same class.

 Some Illustrations of how the law divides the intestate pie among your relatives
o When the decedent is survived by the spouse only?
o When the decedent is survived by legitimate child only?
o When the decedent is survived by an illegitimate child only?
o When the decedent is survived by legitimate parents only?
o When the decedent is survived by illegitimate parents only?
o When the decedent is survived by illegitimate children and spouse?
o When the decedent is survived by illegitimate children and legitimate parents?
o When the decedent is survived by his spouse and legitimate parents?
o When the decedent is survived by spouse and illegitimate parents?
o When the decedent is survived by spouse and nephews and nieces?
o When the decedent is survived by one legitimate child and the spouse?
o When the decedent is survived by an illegitimate child, the spouse, and the
legitimate parents?
 When decedent is survived by legitimate children and spouse?
o How is estate divided?
 When the decedent is survived by legitimate children, illegitimate children, and spouse?
o How is estate divided?
 Why you may want to amend?
o You may think that _% is too much or negligible for the _________
o Your service providers were _________, why pay more when you die?
o People of your blood may not _____
 o The one nearer to you in degree may not be _____
o What is _____ is not always _____
o The law of gravity that rules the _____ need not be the rule to _____.
 Tools you can use to make your own plan
o L_________
o W_________
o I_________
o T_________
o C_________
o D_________
 Life Insurance
o Function:
 P_________
 S_________
 M_________
o Limitation
 No _________
 M_________ need _________
 Tax Treatment of Insurance Proceeds
o Proceeds are not _________
o _________ are not income
o Proceeds payable to _________ are not part of _________
o If proceeds payable to _________ (revocable or irrevocable), part of _________.
 Wills and Testaments
o Function:
 _________, to the extent permitted by law, the _________.
o Limitation:
 L_________ and other _________ restrictions
 _________ must be strictly complied with
 _________ needed to effect the transfer
o Tax Treatment of Property Passing under a Will
 Estate Tax - _________ (previously _________)
 Standard Deduction _________ (previously _________)
 Exemption on Family home - _________ (previously _________)
 Withdrawal of any amount from bank deposit of deceased - _________
 _________ not required
 Filing of estate tax return - _________ (prev. _________)
 Payment of estate tax by installment - _________
 Limited Tax-Saving Opportunities
 C_________
 G_________
 The _________ - Appendix A
 Inter-Vivos Gift
o Function:
 Removes the _________ from _________.
 Fixes the _________ and reduces _________
 Diverts _________ from _________.
 o Limitation:
 Similar to limitations on _________
 Subject to _________
 Could arouse _________ and _________
o Tax Treatment of Donating Property
 Donor’s Tax - _________ (prev. _________)
 Exempt - _________ (prev _________)
 Subject to _________
 Savings opportunities:
 G_________
 I_________
 Trust and Other Fiduciary A/Cs
o Function:
 Primarily separates _________
 Serves as _________
o Limitation:
 _________ avoid managing _________
 Extremely _________
o Tax Treatment of Trust
 Regular Bank Trusts - _________
 EFCDU Trust - _________
 _________ treated as an _________
 Corporations and Partnerships
o Function:
 Removes _________
 Retains _________
o Limitation:
 Only the _________ is changed
 Could invite f_________, s_________, p_________ of _________,
d_________ between those working in _________
 Consider the Close Corporation
o The easy way to incorporate: _________
o Unanswered concerns of standard corporation:
 C_________
 F_________
o Benefits of a close corporation
 Less _________
 More suitable to _________
o Pending amendments under _________ of the _________
 Tax Treatment of a Corporation
o Tax-free ________ if under ________
o Minimum ________
o Improperly Accumulated Earnigns Tax - ________
o Pending Amendments under ________ of the ________ on ________.
 And/Or Deposits/ Bank Products
o Function:
 Enables ________ to ________
 o Limitation:
 Owner necessarily ________ his ________
 ________ may inquire into account despite ________
 Pending lifting of ________ under ________
o Tax Treatment of Bank Deposits and Bank Products
 Bank should allow withdrawal of any amount by ________
 Subject to ________ unless ________
 Withdrawal within ________
 Amount not included in the ________
 Income is subject to ________
 Under the ________ - withdrawal from the bank deposit upon presentation
of ________, unless the ________ or the ________ may, upon ________,
issue a ________ in a ________ prescribed format, allowing ________ of the
________ to the ________ due without ________.
o Points of Special Interest
 A new ________
 Insurance – when ________
 Wills – a new look at ________
 Donations – Do not forget the. ________
 Trusts – choose your ________
 Corporations – consider the ________
 Bank Accounts – ruptured ________
o Point of Special Interest
 (CTRP) - _________
 RA# 10963: _________
 Package 1: - p_________, e_________
 Package 1B - T_________ (on _________, all _________ and
_________)
 Lifting of _________, automatic _________ (Pending)
 Package 2: _________, on corporate tax system, lower _________
and modernize _________.
 Package 3: P_________ AND _________ (r_________ to increase
government revenues without __________)
 Package 4: C_________ and _________, on taxes imposed on
_________ and the products they offer; on _________ and
_________, and _________ and _________ instruments.
o The New Focus: Beneficiary in Need
 From: _________
 To: _________
o Importance of _________ when your _________ takes effect
 Common Attitude: “After paying the _________ and passing _________, I am
done. My _________ will take care of the rest.
 Legal Pitfall: _________ must _________.
 Advisability of Living Probate
o Problems of Post-Death Probate
 P_________ of o_________
 U_________ t_________ of h_________
 o Advantages of Living Probate
 S_________ of _________
 No d_________ of _________
o The Formality of Giving:
 Legal Principle: V_________ of _________
 Consequence: G_________ must be in the proper _________.
o Watch your Trustee, he is only human:
 Old Wisdom: Do not put your _________ in _________, but put your
_________ in _________.
 Wake Up Call: Recent _________
 Ruptured Veil of Bank Secrecy
o Exceptions to RA 14015:
 W_________
 I_________
 C_________ in b_________, d_________, m_________
o A_________
o O_________
o _________ for estate tax
o I_________ to U_________
o M_________
o Note: Pending amendments/lifting of _________ under _________ of TRAIN
 Conclusions:
o If you like the plan made for you by law, then _________
o However, if you do not, you are _________, but _________
o Saving on _________ though a good _________ should not _________ other
_________.
o The _________ can help you seek _________ on how to plan your estate and use the
_________ of _________ of your planning team.
o Your estate plan should be reviewed at least _________, preferable _________.
o With the _________ and _________ the estate tax and donor tax, it will not matter
anymore if the estate planner _________, _________ or simply _________, say by
_________.
o The reduction in the _________may seem to render estate not as crucial, but
_________, is just an aspect of estate planning. There is more to it: a_________ and
m_________, how best to _________ assets and _________ to beneficiaries in a
_________, what is most _________ or _________ to the family business and
preserving asset.
 Estate Tax Amnesty:
o Purpose: To provide _________ a _________ opportunity to _________ and give
_________ to estates without _________.
o Legal Basis:
 Title II (Estate Tax Amnesty) of _________ Act (Republic Act No. 11213),
approved on February 14, 2019, Granting Amnesty on All _________ imposed
by the _________ for Taxable Year _________ and Prior Years, with respect
to E_________, O_________, and Tax on _________.
 BIR _________ No 6-2019, issued on May 28, 2019, implementing the
provisions of the Estate Tax Amensty.
  BIR _________ Circular No. 26-2019, issued on February 26, 2019 –
circularizing Tax Amnesty Act.
 BIR _________ Circular No. 68-2019, issued on July 1, 2019 – clarifying
curtained related issues.
o Coverage: Estate of decedent/s who died on or before _________ with or without
_________ therefor, whose estate tax/es have remained _________ or _________
as of _________.
o Estate Tax Amnesty Rate - _% on _________ at _________ without _________ or
property in _________ with the rules of under the Civil Code of the Philippines on
the ________ of _________, _________, _________ and _________ of the
decedent.
 _________ - Minimum estate amnesty tax for the _________ of the
_________, if the _________ applicable at the time of death of the decedent
exceed the value of the _________.
 If an _________ was previously filed with the _________, the Estate Tax Rate
of _________ shall be based on the _________.
 Immunities and Privileges of Availing Estate Tax Amnesty
o Immunity from _________, increments and additions thereto arising from
_________ for _________.
o Immunity from all a_________, c_________, c_________, and _________, and
_________ under the _________
o The availment of the Estate Tax Amnesty and the issuance of the corresponding
_________ do not imply any admission of c_________, c_________ or a_________
on the part of the _________.
o The _________ shall be conclusively presumed as true, correct and final upon filing
thereof, and shall be deemed complete upon _________.
o Upon full compliance with all the conditions required under the _________ and
_________ of the corresponding _________, the tax amnesty granted shall
_________.
 Estate Tax Amnesty
o Who Files: e_________, a_________, l_________, t_________ or b_________
o When to file (Period for Availing Amnesty): _________
 Within _________ from the _________ of the Implementing Rules and
Regulations.
o Where to file: _________
 For non-resident decedent:
 With _________ or _________ in the Philippines – with the
_________ where such is registered, or if not registered, at the
_________.
 Without _________ or _________ in the Philippines – with
_________. Unless __________________
o Payment of Amnesty Tax – at the time _________
o Excluded from Coverage:
 D_________ which have become _________ and _________ and those
covered by _________.
 Properties involved in _________
 P_________ on G_________
  A_________ and C_________, or Act Defining and Penalizing the
_________ (u_________ or u_________ acquired wealth)
 V_________ of the _________
 T_________ and other Criminal Offenses under the _________
 F_________ of _________, i_________ and transactions and
m_________ of _________ and _________ under the _________.
o The provision of the _________ of _________, as amended, or the applicable
estate/inheritance tax laws prevailing at _________ with respect to _________, and
other related matters shall apply _________.
o _________ - all properties and interests in properties of the decedent at the time of
his death as well as properties he transferred during his lifetime but in substance,
ownership of the same was only transferred at the time of his death, excluding the
_________.
 Residents and citizens - _________
 Non-resident aliens - _________
o _________ - the gross estate less _________ as provided in _________, as amended,
or the applicable estate tax laws prevailing at the time of death of the decedent.
o _________ - the difference between the total net estate valued at _________ and
the net estate _________. The net estate _________ is presumed to have been
_________ with _________; thus, only the _________ of the _________ on the
_________, if any, may be _________.
 Valuation of the Gross Estate – in general, based on _________.
o Real Property - _________ as determined by _________ and the fair market value
shown in the _________.
o Shares of stock:
 Listed and traded in the stock exchange – the price at _________ or the
_________ between _________ at _________, of none is available, on
_________
 Not listed shares - _________, as shown in the _________. The valuation of
these shares shall be _________ from the provisions of _________ 06-2013,
as amended.
 Proprietary shares in any association, recreation or amusement club (such as
golf, polo or similar clubs) - _________, if none _________
 Cash in bank in local and/or foreign currency - _________
 Deductions from the Gross Estate
o Deductions allowed by the _________ applicable at _________, i.e., allowable
deductions under _________ covering period _________.
 Steps in Availing Estate Tax Amnesty
o The _________ or _________, legal _________, t_________ or b_________, should
file _________ with the _________ having jurisdiction over _________
 In case of a non-resident decedent with no _________ in the Philippines, the
returned shall be filed with _________.
 If the estate involved has properties which are still in the name of another
decedent or donor, the present holder, heirs, executors, or administrators
thereof shall _________ and pay the _________ thereon based on the
_________, covering all _________ under the _________, as amended,
 arising from the transfer of such estate from all prior decedents or donors
through which the property or properties comprising the estate shall pass.
o The duly accomplished and sworn _________, and _________ ( _________ or BIR
Form _________), together with the complete documents as enumerated in the
_________, shall be presented to the _________ for endorsement of the _________
prior to the _________ with the _________ or _________.
o After payment, the dully accomplished and sworn _________ and _________ with
_________, together with the complete _________, shall be immediately submitted
to the _________ in _________.
 Failure to submit the above documents within _________ from _________, is
tantamount to_________ of _________ and any payment may be applied
against the _________ inclusive of _________.
 The mandatory _________ or requirements needed are indicated in the
_________.
 Estate Tax Amnesty Return for Undeclared Properties – if the estate has properties which
were not declared in previously filed return, the legal heirs/executors/administrators can
file _________ or _________, whichever is applicable, and pay the _________, without
penalties, based on the _________ as defined in the _________ within _________ from
_________.
 Undeclared properties after the lapse of the _________ from _________, shall be subject to
_________ at _________.
 Estate with Properties subject of Taxable Donation/Sale
o The properties included in the _________ availment which are likewise subject of
_________ shall be assessed of the corresponding _________/_________/ or other
_________ at the time of _________ including _________.
 Issuance of Certificate of Availment
o Issued by the _________ concerned within _________ from the _________,
together with duly validated _________ and complete documentary requirements
enumerated in the _________.
 Issuance of Electronic Certificate Authorizing Registration (eCAR) - _________ shall be
issued per _________ including _________, if any, covered by original _________ of
_________/_________ certificate of _________ or _________ for untitled properties. For
personal properties included in the estate, _________
 Personal Equity and Retirement Account (PERA)

 What is PERA?
o Refers to the __________ established by and for the __________ and benefit of the
__________ for the purpose of being invested solely in __________ in the
Philippines.
 Retirement Income Provision in the Philippine Setting:
o Private Sector VS Government Sector
 Voluntary (Portable)
 Voluntary (Non-Portable)
 Mandatory
 Mandatory
 Contributor – any __________ and __________
o A contributor may establish a PERA with a maximum annual contribution of
__________ or __________.
o In case of married individual, __________.
o Employer may contribute in behalf of the employee provided:
 __________
 __________
 Overseas Filipinos (OF) as Contributors
o Filipino citizens __________ or __________ income abroad.
o Individuals who have __________.
 OFs may establish a PERA with a maximum annual contribution of
__________ or __________.
 __________ and __________ of OFs may also open a PERA.
 Maximum Annual PERA Contribution
o Unmarried Filipino Citizen
o Married Filipino Citizen and both spouses qualify as contributor
o Married Filipino Citizen and only one spouse qualifies as a contributor.
o Unmarried Overseas Filipino
o Married Overseas Filipino whose legitimate spouse is neither an Overseas Filipino
nor a qualified contributor
o Note: The PHP amount can be in its __________ at __________. The __________
may adjust the maximum contribution from time to time.
o Married Overseas Filipinos whose legitimate spouse and children (not otherwise
disqualified as contributors) of an Overseas Filipino who did not directly open any
PERA.
o Married Overseas Filipino whose legitimate spouse is also an Overseas Filipino
o Married Overseas Filipino whose legitimate children are not Overseas Filipinos and
are not qualified contributors.
 PERA Investment Products:
o The contributor shall make __________ pertaining to his PERA (__________)
o Contributor can specify __________.
o Limited to Investment products accredited by the concerened __________
 U__________
 M__________
 A__________
  I__________
 P__________
 S__________
 G__________
 S__________
 Any other category of investment product or outlet which __________.
 What is in it for the Contributor? Why PERA?
o Tax incentive on __________.
 Tax credit equivalent to __________ of __________
 If an OF, entitled to claim tax credit from any tax __________ under
__________.
o Tax incentive on __________.
 __________ on all __________ from investments and reinvestments of the
maximum amount allowed.
o T__________
 __________ Rule (____________________)
 D__________,P__________, and other limited circumstances, subject to
conditions.
 Exempt from __________
 Early Withdrawals
o Will be subject to __________, except:
 For payment of __________, in excess of __________.
 Contributor’s __________.
 Immediate __________ to __________ within __________ from __________.
o Penalty means __________ (__________ flat rate on the __________ and
__________ on the __________)
 PERA Participant must be accredited by the Concerned PERA Regulatory Authority
o __________ - Banks and Trust Entities
o __________ - Investment Companies, Investment Houses, Securities Broker
o __________ - Insurance Companies
 Roles of the PERA Administrator
o E______ the ______
o Open ______ in ______
o C______ contributor assets with ______ and ______
o Apply for ______ in behalf of contributor
o Executes ______ for the contributor or his ______
 ______ cannot exercise investment discretion
o P______ and s______ ______ to the contributor and ______.
o Enforce ______ especially ______
o Collect ______
 Qualifications of a PERA Administrator
o Net worth of ______
o Clear and sufficient ______ to conduct ______
o Adequate ______ and ______ to perform required functions
o Sufficient ______ who have ______
 Investment Manager – Entities eligible to act as Investment Manager
o Regulatory Authority:
  BSP
 SEC
 RA
 Roles of the Investment Manager
o Make ______ in behalf of the contributor
o Cannot ______ or that ______
 Requirements for an Investment Manager
o W____________
o Proof of ______
o ______ explaining investment process, philosophy, and fees.
 Cash Custodian
o Must be a ______ licensed by the BSP that has:
 Compiled with the ______ under ______
 A ______ composite rating not lower than ______ with ______ of not lower
than ______ in its latest examination
 Securities Custodian
o ______ and other ______ with ______ which have compiled with the ______ for
securities custodian.
 Roles of Custodian
o Cash Custodian
 R______ in connection with PERA
 Act on ______ of the ______ regarding ______
 Submit reports to ______, ______ and ______.
o Securities Custodian
 ______ custody of all ______, ______ or other ______.
 Act on ______ of the ______ regarding ______
 Submit reports to ______, ______, and ______.
o Shall operate ______ from ______.
o Contributor option of ______ for ______ PERA investments.
 PERA Workflow
o Contributor gives investment instruction to ______
o Contributor gives investment discretion to ______
o Contributor remits funds to ______
o Administrator issues consolidated reports to ______
o Applies TCCs for ______
o Custodian gives investment instruction/cash to ______
o PERA Investment gives securities to ______.
 Check and balance is achieved through ______
o Administrator
 Cannot ______
 Can be accredited as ______ but never simultaneously for the ______.
o Investment manager
 Can exercise ______ but cannot ______
o Custodian
 Must be ______ to the ______.
 Summary of Roles – at the client level
Pera Market Participant Pera Cash Custodian Securities Investment Product
Administrator Custodian Manager Provider
Pera Administrator
Cash Custodian
Securities Custodian
Investment Manager
Product Provider

 Creating a Virtuous Cycle through PERA

o S______ M______
 R______
 Increase in ______
o C______ F______
 ______ as long term-investment
o C______ M______ D______
 Creating ______ and ______
 Attracting ______
 Development of ______
o I______ I______ B______
 Professional investors pooling ______
 Initiatives on PERA Implementation
o PERA ______
o M______ (Regulatory Authorities, Industry Players)
o P______ ______
o I______ ______ ______
o P______ ______
o B______ ______
 ______ - system development project
o Ensures:
 PERA Contributors are under the ______ of their ______
 PERA Contributions are w______
 PERA Contributions are i______ in ______
o Access allowed:
 ______ as operator
 ______ covered by an inter-regulatory MoA
 ______ covered by Participation Agreement
 ______ fees and service charges
 Policy Development
o Circular No. 860 – Guidelines on the Qualification/Accreditation Requirements of
______ and ______
o Circular No. 878 – Amendments to the ______ to Implement ______
o Circular No. 879 – Guidelines on the Use of ______ as ______ for the ______ of
______
o Circular No. 880 - R______ R______ on PERA
o Memorandum to all BSP Supervised Entities 2014-045 - ______ Guidelines on the
______.
 Memorandum of Agreement
o ______ - signed
 Responsibilities of the ______
 Creation of ______
o ______ - on Security for Faithful Performance of PERA duties; ______
o BSP and Industry on ______ - signed.
 Investment Product Accreditation
o BSP Accredited Instruments
 U______
 Debt Instruments such as but not limited to ______ and ______
 D______
 G______
 Provided that for ______ and ______, these should be issued by
______ with composite ______ of ______.
 Players Accreditation
o Administrator – (2)
o Product Provider (5)
o Cash Custodian (1)
o Securities Custodian (3)
 Problems of Scale
o How much do you need to invest for the ______
o How many ______ do you need to be viable
o How much can you ______ of less than 100K?
 Other Challenges
o T______ concerns
o F______
o Limited ______/ limited ______
o N______ ______ requirements
o A______ and ______ of ______
o Limited d______
 Proposed Measures:
o S______ of PERA Funds
o D______ of PERA through the ______
o ______ issuance of ______
o Review of the ______ to address the industry’s concerns
o Use of ______ and ______ to reduce transaction cost.
o