Building/buying A House And Inheritance Laws...again

[strap]

I know inheritance laws have been discussed here before, and I've tried to read all the old posts I could find as well as other stuff on the web. But let me see if I've got this right:

 

I'm a US citizen, my wife is a filipina, but a naturalized US citizen, non-dual at the moment. We have one son, US citizen born in the US.

 

Basically I as foreigner can't own property in the Philippines. (I think I could actually own a house, but not the property it sits on.) So, apparently it's pretty common to buy the house/property in the filipina spouse's name. But...what happens if my filipina wife dies before I do. It seems to get very complicated.

 

My wife cannot just will the property to me. There's the concept of "compulsary heirs" in the Philippines. Under that concept, in our case our son would get 1/2 of her estate and I would get 1/4. This seems to apply regardless of whether we are foreigners or not. The remaining 1/4 she could will to whoever she wants...except me or my son, because you can't will property to foreigners. Kind of a mess!

 

So, assuming everything above is correct (big assumption) my question to those of you that have built/bought a house is how do you handle the possibility that your filipino spouse will die before you? It all just seems very risky.

[Guy F.]

Being sure the husband's (the non-Philippine-citizen's) name is on the building permit and other paperwork for the house is something I've done. I think that would make it difficult for her to kick me out on a whim. A lawyer told us children could inherit land even if they are US citizens. Couldn't I inherit it as a US citizen although I'd be given "a reasonable amount of time" to sell it?

[scott h]

Welcome Strap, good question. I seem to remember there being a topic eons ago about this, and it being mentioned that a forgien spouse of a Philippine citizen is given a dispensation to remain in the house upon the "owners" death. Some program or law or some such.

 

Having said that, my wife and I are the same age, so its 50/50 who goes first. She inherited our property from her mother, the house that we built is in her name.

 

I personally believe it will all depend on the relationships a person has with the wife's family. The inheritance laws here (IAW a news program I saw on solar news) are almost medieval and convoluted. If the relations are the greedy type, I believe they could tie a person up in court for ages trying to get control of the property. If relations are good, I believe (and this is just my opinion) a person could live there for ever. The government doesn't care, or even check, as long as the property taxes are paid and there are no civil complaints, they don't give a hoot.

 

I base this on my wife's inheritance. When she inherited the property. They had to jump through a few hoops because the property was still in the name of her grandmother (dead over 30 years) the house in the name of the mother, the water in the name of an aunt, (dead 20 years) and the electric in the name of her father (dead 12 years or so). The amount of leg work involved getting everything in her name was daunting lololol.

 

Again all above is just my opinion. (but do some research on the inheritance laws, they are quite amusing lolol)

[RBM]

I would certainly agree with the previous posts, especially it is complicated and all depends on the family of ones wife---- partner.

In many towns, cities it's acceptable to have the foreigners name on the title which would also strengthen ones rights. Personally I did not do this how ever it was suggested by the attorney and commonly done here. I chose a different form of protection which I plan to write about soon.

One issue is ask a dozen attorneys and receive a dozen different replies. Again I feel the family would play a prominent part in the unfortunate demise of ones partner.

[Jack Peterson]

 Hi guys, a little something we dug out before.

 

http://philfaqs.com/i-heard-a-foreigner-can-inherit-land-in-the-philippines/

 

Hope this will put some minds at ease a little.

 

JP :tiphat:

Morning all :morning1:

[fred]

And then there is estate tax!! 20% with 6 months to pay.. This includes cash in the bank and just about everything she owned.

No payment after 6 months and penalties apply..and so on.

[Thomas]

I'm a US citizen, my wife is a filipina, but a naturalized US citizen, non-dual at the moment. We have one son, US citizen born in the US.

I suppouse you mean she/they get dual citizenships so they can own land. 

My wife cannot just will the property to me. There's the concept of "compulsary heirs" in the Philippines. Under that concept, in our case our son would get 1/2 of her estate and I would get 1/4. This seems to apply regardless of whether we are foreigners or not.

Well. The spouse get "his half" first.  The REST the spouse can get max 1/4 of (without will) and max 1/2 of with will, if I remember the details corect. But foreigners aren't allowed to KEEP inherited land.

Anyway - better let the Filipinos have the LAND, and you LEASE it, with YOUR HOUSE on it.

 

And then there is estate tax!! 20% with 6 months to pay.. This includes cash in the bank and just about everything she owned.

No payment after 6 months and penalties apply..and so on.

I guess you talk about tax when inherit.  The yearly estate tax is much smaller.

[fred]

 

I'm a US citizen, my wife is a filipina, but a naturalized US citizen, non-dual at the moment. We have one son, US citizen born in the US.

I suppouse you mean she/they get dual citizenships so they can own land. 

 

My wife cannot just will the property to me. There's the concept of "compulsary heirs" in the Philippines. Under that concept, in our case our son would get 1/2 of her estate and I would get 1/4. This seems to apply regardless of whether we are foreigners or not.

Well. The spouse get "his half" first.  The REST the spouse can get max 1/4 of (without will) and max 1/2 of with will, if I remember the details corect. But foreigners aren't allowed to KEEP inherited land.

Anyway - better let the Filipinos have the LAND, and you LEASE it, with YOUR HOUSE on it.

 

And then there is estate tax!! 20% with 6 months to pay.. This includes cash in the bank and just about everything she owned.

No payment after 6 months and penalties apply..and so on.

I guess you talk about tax when inherit.  The yearly estate tax is much smaller.

 

 

Yeah..Thats what they call it over here..I should have said inheritance tax really.

If any thing should happen to my partner before I kick it (God forbid) I will be in a world of financial hurt..

Its a subject that needs to be addressed,specially if you dont want to leave the kids with a huge burden.. An appropriate life insurance policy to cover their 20% tax burden is a sensible idea if its affordable..

In my home country,inheritance tax is not a problem until the property is sold..At least the cash is available for payment.

Sadly its not the case here in P.I.

Edited June 18, 2015 by fred

[Jack Peterson]

Sadly its not the case here in P.I.

 

 

Sadly so, so maybe  timely to post this link on the issue so all may read and Try and digest it. 

 

http://www.bir.gov.ph/index.php/tax-information/estate-tax.html

 

JP :tiphat:

[Thomas]

If any thing should happen to my partner before I kick it (God forbid) I will be in a world of financial hurt.. Its a subject that needs to be addressed,specially if you dont want to leave the kids with a huge burden.. An appropriate life insurance policy to cover their 20% tax burden is a sensible idea if its affordable.. In my home country,inheritance tax is not a problem until the property is sold..At least the cash is available for payment.

Yes, that can be a big problem, although not as big as 20 %.

Edit:   The tablet became a mess.  You can see it through the link.

E g at 5 000 000 the tax is 465 000.

=even at 5 million worth, the tax is LESS than 10 %  (=the red.)

 

Plus I asume - but I can't be sure because it's Phils :mocking:   -   when it's between spouses, who own half each, the surviving spouse don't need to pay tax at his/her own half  :)

 

It took a while to find it, because they DON'T call it "Inheritance tax" even in the official information!!!  :mocking:   http://www.bir.gov.ph/index.php/tax-information/estate-tax.html

Edited June 18, 2015 by Thomas