Estate

Plannin
g___________________
Protecting your Heritage
and Relationships

Atty. Judd Cabasug

Partner
Corporate Counsels, Philippines Law Offices
 • Overview of Estate Planning
Scope
• Basic Concepts on Succession
• Estate Taxes
• Estate Tax Amnesty
• Family Relationships
 • Ease Tax Burden
• Peace of Mind
• Protect your Heirs
Why Estate Planning? • Family Unity
“Have no anxiety at all, but in everything, by prayer and thanksgiving, make
your requests known to God. Then the peace of God that surpasses all
understanding will guard your hearts and minds in Christ Jesus.” (Phil. 4:6-7)
 Estate Planning is the
arranging for the
disposition and
management of one’s
estate at death through
the use of wills, trusts,
insurance policies, and
other devices.
(Merriam-Webster Law Dictionary)
Estate Planning Approach and Some
Tools:

1. Know your goals

2. Wills
3. Trusts
4. Insurance policies, memorial plans
5. Transfer properties
 This is a mode of acquisition by virtue of
Succession which the property, rights and obligations to
the extent of the value of the inheritance, of a
person are transmitted through his death to
another or others either by his will or by
operation of law
 Decedent is the general term applied to
Decedent the person whose property is
transmitted through succession,
whether or not he left a will. If he left a
will, he is also called the testator.
Heirs

An heir is a person called

to the succession either
by the provision of a will
or by operation of law
Inheritance Inheritance refers to the
properties or property rights
of a decedent, which is the
subject matter of succession.
 1. Testamentary succession - that which results
from the designation of an heir, made in a will
Kinds of executed in the form prescribed by law.

Succession 2. Intestate - Takes place when a person dies

without a will or with a void will or one that which
has subsequently lost its validity, or if no one
succeeds under his will.
3. Mixed - partly by will and partly by operation
of law.
 1. Legitimate children and descendants, with
respect to their legitimate parents and
Who are ascendants;

compulsory 2. In default of the foregoing, legitimate parents

and ascendants, with respect to their legitimate
heirs children and descendants;
3. The widow or widower;
4. Acknowledged natural children, and natural
children by legal fiction;
5. Illegitimate children.
 Executor or the person named in the will by
Who are the testator to carry out its contents.
Executors and Administrator or the person appointed by
Administrators the court to administer and distribute the
estate of the decedent if there is no will, or if
no executor named in the will, or if the
person named in the will does not act or
execute its contents.
Estate Tax

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Corporate Counsels, Philippines Law Offices

What is Estate Tax?

Estate Tax is a tax on the right of the deceased

person to transmit his/her estate to his/her
lawful heirs and beneficiaries at the time of
death and on certain transfers, which are made
by law as equivalent to testamentary
disposition.
What is Estate Tax?
A transfer tax imposed upon the the gratuitous dispostion
of private property

A privilege or excise tax . Not a property tax because their

imposition does not rest upon general ownership but
rather they are imposed on the act of passing ownership
of property
When is property and rights transmitted?

At the time of death, consequently estate tax also accrues

at the time of death of the decedent

Does that mean that the heirs could automatically get their share of the estate upon
death of the decedent?
No, despite the transfer of properties and rights at the time of death of the decedent,no
judge shall authorize the executor or the judicial administrator to deliver a distributive
share to any party interested in the estate unlesss there is a certification from the
commissioner that estate tax has been paid.
What Law Governs?

Estate Taxation is governed by the the statute

in force at the time of death of the decedent

Who is liable to pay the estate tax

The estate
How to
Compute
Estate Tax

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Corporate Counsels, Philippines Law Offices

What is the Tax 6% of the net estate
Rate? starting January 1, 2018
 From January 1, 1998
Prior to 2018 to December 31, 2017
Table NIRC
 Net Estate vs Gross Estate

Gross Estate - The value of the

gross estate of the decedent
includes the value at the time of
his death of all property, real or
personal, tangible or intangible,
wherever situated
Net Estate - The net estate is
determined by deducting from
the value of gross estate the total
amount of allowable deductions.
 Net Estate Formula

(Gross Estate - Exclusions) -

Deductions
= Net Estate
  GSIS proceeds/ benefits
What are
Excluded from  Accruals from SSS
Gross Estate  Proceeds of life insurance where the
(EXCLUSIONS) beneficiary is irrevocably appointed
 Proceeds of life insurance under a group
insurance taken by employer (not taken out
upon his life)
 War damage payments
  Transfer by way of bona fide sales
 Transfer of property to the National Government
What are or to any of its political subdivisions
Excluded from  Separate property of the surviving spouse
Gross Estate
 Merger of usufruct in the owner of the naked
(EXCLUSIONS) title
 Properties held in trust by the decedent
 Acquisition and/or transfer expressly declared as
not taxable
 1. Standard Deduction — An amount
equivalent to Five million pesos
What are 2. Claims against the estate
allowable 3. Claims of the deceased against insolvent
Deductions persons where the value of the decedent’s
interest therein is included in the value of the
gross estate
4. Unpaid mortgages, taxes and casualty losses
 5. Property previously taxed
6. Transfers for Public Use
What are 7. The Family Home - An amount equivalent to the
allowable current fair market value of the decedent’s family
home: Provided, however, that if the said current
Deductions fair market value exceeds Ten million pesos, the
excess shall be subject to estate tax
If the family home is conjugal property and does not
exceed ₱10,000,000, the allowable deduction is one-
half (1/2) of the amount only.
 8. Amount Received by Heirs Under Republic Act
No. 4917
What are Any amount received by the heirs from the
allowable decedent’s employer as a consequence of the death
Deductions of the decedent-employee in accordance with
Republic Act No. 4917: Provided, that such amount
is included in the gross estate of the decedent.

9. Net share of the surviving spouse in the conjugal

partnership or community property
BIR
Procedures

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Corporate Counsels, Philippines Law Offices

 BIR Documentary Requirements

1. Certified true copy of the Death Certificate

2. Taxpayer Identification Number (TIN) of decedent and heir/s

3. Notice of Death (only for death prior to Jan. 1, 2018) duly received by the BIR, if gross taxable estate
exceeds P20,000 for deaths occurring on Jan. 1, 1998 up to Dec. 31, 2017; or if the gross taxable estate
exceeds P3,000 for deaths occurring prior to Jan. 1, 1998

4. Any of the following: a) Affidavit of Self Adjudication; b) Deed of Extra-Judicial Settlement of the Estate,
if the estate has been settled extra-judicially; c) Court order if settled judicially; d) Sworn Declaration of all
properties of the Estate
 BIR Documentary Requirements
5. A certified copy of the schedule of partition and the order of the court approving the same within thirty
(30) days after the promulgation of such order, in case of judicial settlement

6. Proof of Claimed Tax Credit, if applicable

7. Certified Public Accountant (CPA) Statement on the itemized assets of the decedent, itemized deductions from gross
estate and the amount due if the gross value of the estate exceeds 5 million pesos for decedent’s death on or after Jan. 1,
2018 or 2 million pesos for decedent’s death from Jan. 1, 1998 to Dec. 31, 2017

8. Certification of the Barangay Captain for the claimed Family Home (*if the family home is conjugal property and
does not exceed Php10 Million, the allowable deduction is one-half of the amount only)
 BIR Documentary Requirements
9. Duly Notarized Promissory Note for "Claims Against the Estate" arising
from Contract of Loan

10. Accounting of the proceeds of loan contracted within three (3) years prior
to death of the decedent

11. Proof of the claimed "Property Previously Taxed"

12. Copy of Tax Debit Memo used as payment, if applicable

 1. Certified true copy/ies of the
Transfer/Original/Condominium Certificate/s
of Title of real property/ies (front and back
pages), if applicable

2. Certified true copy of the Tax Declaration

If there are Real of real properties at the time of death, if
Properties applicable

3. Certificate of No Improvement issued by

the Assessor's Office where declared
properties have no improvement
 1. Certificate of Deposit / Investment /
Indebtedness owned by the decedent and the
surviving spouse, if applicable

If there are 2. Photocopy of Certificate of Registration of

vehicles and other proofs showing the correct
Personal value of the same, if applicable
Properties
3. Proof of valuation of shares of
stock at the time of death, if
applicable
 For shares of stocks not listed/not traded - Latest Audited Financial
Statement of the issuing corporation with computation of the book
value per share
For shares of stocks listed/traded - Price index from the Philippine
Stock Exchange (PSE) /latest Fair Market Value (FMV) published in
the newspaper at the time of transaction

If there are
4. Photocopy of Certificate of stocks, if applicable
Personal
Properties
5. Proof of valuation of other types of personal
property, if applicable
 1. Special Power of Attorney (SPA), if the person processing the transfer
is not a party to the transaction and/or Sworn Statement if one of the
heirs is designated as executor/administrator

c. Other 2. Certification from the Philippine Consulate if document is executed

abroad
Additional 3. Location Plan/Vicinity map issued by the Local Assessor’s Office if
Requirements, if zonal value cannot be readily determined from the documents submitted

applicable: 4. Certificate of Exemption/BIR Ruling issued by the Commissioner of

Internal Revenue or his authorized representative, if tax exempt
5. BIR-approved request for installment payment of Estate tax due
6. BIR-approved request for partial disposition of Estate
7. Such other documents as may be required by
law/rulings/regulations/etc.
1. The executor, or administrator, or any of
the legal heir/s of the decedent, whether
resident or non-resident of the Philippines

Who
2. If there is no executor or administrator
appointed, qualified, and acting within the
shall file?
Philippines, then any person in actual or
constructive possession of any property of
the decedent
The Estate Tax Return (BIR Form 1801)
shall be filed within one (1) year from the
decedent's death.

When?
In meritorious cases, the Commissioner
shall have the authority to grant a
reasonable extension not exceeding thirty
(30) days for filing the return.
When the Commissioner of Internal
Revenue finds that the payment on the
due date of the estate tax or of any part
thereof would impose undue hardship
upon the estate or any of the heirs, he
may extend the time for payment of
Extension to
such tax or any part thereof not to File and Pay
exceed five (5) years, in case the estate is
settled through the courts, or two (2)
years in case the estate is settled extra-
judicially.
Estate Tax
Amnesty

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Corporate Counsels, Philippines Law Offices

 Tax amnesty
application
Deadline

June 15 ,2021
(two years from June 15, 2019)
 Estate of a decedent who died on
Coverage
or before Dec. 31, 2017, with or
without assessments duly issued
thereof, whose estate taxes have
remained unpaid or have accrued
as of Dec. 31, 2017.
 6% on each decedent’s total net taxable
Rate estate at the time of death without
penalties, at every stage of transfer of
property. The minimum estate amnesty
tax for the transfer of the estate of each
decedent shall be P5,000.
 Resident and Citizen - All properties
Compositio wherever situated
n
Non-Resident aliens - All properties
located in the Philippines
 FMV at the time of death appearing
Valuation of in the tax declaration issued at the
properties time of death OR the succeeding
available tax declaration issued
nearest to the date of death
Deductions Yes, deductions are allowed.
But deductions to be applied are
allowed
those applicable at the time of
death.
 1. Estate Tax Amnesty Return
1. Estate Tax Amnesty Return
(ETAR)
(ETAR)- FORM 2118 -EA
- FORM 2118 -EA
Documents
2.2.Duly validated Acceptance
Duly validated Acceptance
required
Payment
Payment Form (APF)with
Form (APF) withthe
the
proof
proof of
of payment-
payment FORM
0621-EA
- FORM 0621-EA
Where to File?
RDO where decedent
last resided.
ON FAMILY
RELATIONSHIPS
  Acknowledgment:
 Aron Oriondo and his team at BLTOPAZ Life Insurance Services of Pru Life UK
for the opportunity to serve.

To my law firm Partners at CCPLAW for their inputs and support:

 Atty. Arthur R. Ponsaran

 Atty. Arsenio A. Alfiler, Jr.

Thank you and  Atty. Edcel G. Bolinao

God bless you!  Atty. Wilfred S. Babano

For their many contributions to this presentation:

 Atty. Allen F. Geronimo, CPA (CCPLAW Associate)

 Ms. Josel T. Olano, CPA (CCPLAW Finance Consultant)
 My wife, Lot, and our 5 sons, Nathan, Elijah, Isaiah, Pietro and Paolo. 
______________________________________  Our God, our one true source of Love, Faith, Hope and Joy.
Corporate Counsels, Philippines Law Offices