Académique Documents
Professionnel Documents
Culture Documents
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Defining Succession
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Financial Planning
investment vehicles
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ESTATE
PLANNING
makes a
difference!
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It minimizes taxes.
SUPER RICH
RICH
MIDDLE CLASS
LOWER CLASS
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M ake sure that you are getting maximu m return on your investments at
minimum cost.
This includes providing for sufficient cash funds to meet expenses at your
death so that your property does not have to be sold at distress prices.
M ake sure that your property will go to the intended beneficiaries and that
steps are taken to minimize taxes.
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Decide to…
change one or more of your investment,
restructure ownership of certain assets
sign a trust agreement
or buy more life insurance
selecting
the proper
estate planning
devices for you
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Wills
Outright Gifts
Life Insurance
Foun dations
M ortgages
R en tal/Lease Agreement
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Kinds of Will
• Notarial
• Holographic
• Testamentary
• Living will
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Elements of a Trust
Characteristics of Trusts
o It is a relationship.
o It is a relationship of fiduciary character.
o It is a relationship involving property, not merely
personal duties.
o It involves the existence of equitable duties upon
the holder of the title to property (trustee) to
deal with it for the benefit of another
(beneficiary).
o It arises as a result of a manifestation of intention
to create the relationship.
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USES OF DONATION
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AGREEMENT
individual co-owners buy life insurance
policies on the lives of each co-owner
(but not on themselves).
The life insurance that
funds your buy-sell
If you were to die, the policy owners (the
agreement will create
company or co-owners) receive the death
a sum of money at
benefits from the policies on your life.
your death that will
That money is paid to your surviving
be used to pay your family members as payment for your
family or your estate
interest in the business. If all goes well,
the full value of your
your family gets a sum of cash they can
ownership interest.
use to help sustain them after your death,
and the company has ensured its
continuity.
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BUY-SELL IN GENERAL
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Basic Characteristics
of a
Sale-Leaseback • There are basically two (2) separate
contracts involved in a sale- leaseback
agreement.
Agreement – CAVEAT: In the Philippines, it is better to
separate the two contracts involved in the
agreem ent to diminish any notion that it is an
equitable mortgage or a sale with a right of
repurchase (pacto de retro).
• The first contract is a sales contract,
where the owner of the property sells the
land to a third person.
– CAVEAT: The purchase price of the property
must not appear to be simulated, i. e. the
purchase pric e is too low to be fair; other wise
the courts may see this as a fictitious
contract and declare it void.
– CAVEAT: Sale of real estate property is
subject to at least three (3) different nationa l
and local taxes.
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A sale-leaseback transaction is
where property is transferred to
another through a sale agreement and
then the seller would rent the property
for his own use, paying monthly rent to
the buyer/lessor.
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•
Entering into a
The buyer gets monthly amortizations in the form of
rent.
Disadvantages
of Entering In case the business of the
into a Sale- seller/lessee becomes
unprofitable, he would still be
Leaseback liable for rentals for a non-
performing land.
The seller/lessee loses the
right to claim depreciation
deductions for income tax
liability, decreasing cash flow.
This, however, may be offset by
business rental expenses that
may be claimed as deductions.
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NON-TAX BENEFITS
Limited liability of stockholders,
corporation with separate personality.
Transfer of property from estate
-the transfer of your without losing control of its management.
assets into a
Corporation TAX BENEFITS
whose
stockholders Avoidance of estate tax and capital gains tax
Freezing of market value of
will be your highly appreciable assets
heirs as you Flexibility in income management
may elect.
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ADVANTAGES OF FOUNDATION
Gifts to indigents
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ADVANTAGES
•Convenience
•Time savings
•Financial Savings
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The affidavit must be executed by the heirs and must contain the
necessary allegations to support a valid extrajudicial settlement of
estate. The affidavit shall be published in a newspaper of general
circulation, once a week for three (3) consecutive weeks.
______________________________________
Client
Case No.___________________
________________________________
Signed
Code no.________________
Tel nos._________________
Fax:____________
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PERSONAL INFORMATION
Date:__________ Case No.________________
Name: ________________________________ ___
Gender: ______
Civil Status: ___________
Birth Date: ____________
Birth Place: ___________
Occupation:___________
Insurance Age:_________
Number of Children: ______
Prior Marriages (Y/N):_____
Residence Address:________________________ ______ __
Telephone number:____________________
Mobile Number:___________________
Fax number:_________________
E-mail Address:_______________________
Occupation:__________________________
Business Address:_________________________
Office Phone Number:_________
Employer:________________________
Employee:________________________
SPOUSE’S INFORMATION
Date:____________
Case No._________
Nam e:________________________________
Gender:________
Birth Date:_____________
Insurance Age:__________
Date Married:__________
Occupation:___________
Business Address:________________________________________
Telephone Num ber:__________________
Fax Num ber:_______________
E-m ail Address:___________________
Insurance Benefits:
____________________________________________________
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CHILDREN
Date:___________ Case No.____________
Name Birth Date Insurance Insurance Educational Health Legitimate? Insura nce
Age Plan Insurance Benefits
GENERAL INFORMATION
Circle yes or no for each question.
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FINANCIAL OBJECTIVES
Date:_______________ Case No._____________
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Grand Total:
CURRENT
PARTICULARS CURRENT VALUE CURRENT LIQUIDITY LIABILITY
Grand Total:
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Debts:--------------------------------------------------------------
Funeral and last expenses------------------------------------
Administration Expenses-------------------------------------
Deductions
Marital Deductions----------------------------
Family Home------------------------------------
Other Deductions------------------------------
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Sources Amount
Capital Needed to Provide P_____________ Additional Income Assuming 10% Interest Yield is
P___________
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Itemized Distribution:
Grand Total:________________
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Itemized Distribution:
Grand Total:________________
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APPOINTMENTS
The f ollowing questions ask whom y ou would like to serv e as Executor, Trustee, and
Guardian if necessary.
Executor
An Executor is the person or corporation named in y our will to administer the settlement of
y our estate. This appointment inv olv es signif icant responsibility and theref ore is
compensated as prov ided by the laws of the state where y our estate is administered.
APPOINTMENTS
The f ollowing questions ask whom y ou would like to serv e as Executor, Trustee, and Guardian if
necessary.
Executor
An Executor is the person or corporation named in y our will to administer the settlement of
y our estate. This appointment inv olv es signif icant responsibility and theref ore is
compensated as prov ided by the laws of the state where y our estate is administered.
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Trustee
The Trustee is the person/bank who would manage the asset held in trust when and if necessary. This
appointment also involves signification responsibility and therefore is compensated by the laws of the state
where the trust is held or by separate agreement. Please fill who you would like to serve as Trustee:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
If this person/bank predeceases you or fails to qualify, who would like to serve as successor Trustee?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
If this person/bank predeceases you or fails to qualify, who would like to serve as successor Trustee?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Trustee
The Trustee is the person/bank who would manage the asset held in trust when and if necessary. This
appointment also involves signification responsibility and therefore is compensated by the laws of the state
where the trust is held or by separate agreement. Please fill who you would like to serve as Trustee:
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
If this person/bank predeceases you or fails to qualify, who would like to serve as successor Trustee?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
If this person/bank predeceases you or fails to qualify, who would like to serve as successor Trustee?
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
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Guardian
Your guardian is the person who would raise y our minor children in the ev ent y our spouse
predeceases y ou. Please f ill in who y ou would like to serv e as guardian.
If this person/bank predeceases y ou or f ails to qualif y, who would like to serv e as guardian in
def ault?
________________________________ ______ ______ ______ ______ ______ ______ ______ _
________________________________ ______ ______ ______ ______ ______ ______ ______ __
________________________________ ______ ______ ______ ______ ______ ______ ______ __
If this person/bank predeceases y ou or f ails to qualif y, who would like to serv e as guardian in
def ault?
________________________________ ______ ______ ______ ______ ______ ______ ______ _
________________________________ ______ ______ ______ ______ ______ ______ ______ _
DISPOSITIVE PROVISIONS
Gifts:
Do you w ant to make a gift to a charity, foundation, religious or fraternal
organization? If so, please list the organization and the dollar amount?
Organization Amount
_______________________________ __________________________
_______________________________ __________________________
______________________________ __________________________
_______________________________ __________________________
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DISPOSITIVE PROVISIONS
LIVING WILLS
Are you considering executing a living will? Who would you appoint as
your agent to follow your directive?
___________________________________________________________
___________________________________________________________
___________________________________________________________
__________________________________
DISPOSITIVE PROVISIONS
POWER OF ATTORNEY
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Module 1
Exercises for Batch 11
a. 1,4,3,2
b. 4,3,2,1
c. 1,2,3,4
d. 3,1,4,2
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b. Jose Bonifacio wrote the will entirely, instead of accepting the offer
of his granddaughter to write the will for him since he cannot write
ver y legibly .
c. Jose Bonifacio had the will dated and duly signed by him.
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Benny was legally married to Patty with whom he had six children.
However, Benny met Emmy and fell in love with her. Eventua lly, Benny
started living with Emmy and had a son with her although he was
still lega lly married to Patty and had not legally separated from her.
While living in with Emmy, Benny obtained a life insurance policy in
which he d esignated Emmy as b eneficiary. A year later, Benny died
in a car accident. Emmy was disqua lified from b ecoming the
beneficiary of Benny. Why do you think so?
C. Both A and B.
D. Neither A nor B.
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CTEP ASSIGNMENTS
(13th Batch)
O A Couple in their 50’s
ABEL and RACHEL SANTOS are in their 50’s. They live in a gated subdivision in Quezon City. They
have two children, Isaiah and Rebecca. Isaiah is married and has two young children, one of
whom has a severe physical handicap. Rebecca, 18, is attending college.
Th e i r property: The Santoses share ownership of all their property. Their estate consists of a
house & lot in QC worth P 10,000,000.00, PLDT stocks worth P500,000.00 as of February 14,
2015 and savings worth P3,000,000, life insurance on each spouse which pays P2,000,000 on
death, and their one-third ownership of the R-S corporation, a family business. It’s hard to
determine exact value for their business interest. As a rough guess, they decide it’s worth
P5,000,000.
Th e i r estate planning goals: The Santoses want to plan now to avoid probate and reduce estate
taxes. They also realize that their net estate is worth more than P10,000,000, and that the estate
tax would eat a lot of money from their estate.
H er property: Mrs. Cruz’s estate consists of house that she and her
husband bought in 1957 for P5,000. It now has a market value of
P5,000,000 now solely under her name. Mrs. Cruz has household
furnishings worth P2,000,000, a car worth P1,000,000, and savings of
P4,000,000. She lives primarily on interest from her savings and pension.
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