Succession & Estate Law in the Philippines

[jrlee183]

15 hours ago, RBM said:

Interesting, if I am reading  this correctly even if the foreigner whom name does not appear on the title, how ever has a joint account. The account is frozen, surly not, how can this effect estate duties when all he is done, in most cases is pay for the house and support.

Unfortunately this is the case.  It is well documented that people struggle to pay estate taxes due to the frozen bank account issue.  If its not paid within 6 months of death, they may grant you a 30 day extension but after that then the penalties come into play.   

The BIR offer no flexibility or sympathy on this matter, and the banks just wont release any funds without a tax clearance certificate from the BIR.  This is why its so important to plan for this. 

[Jack Peterson]

34 minutes ago, jrlee183 said:

All bank accounts are frozen on death, regardless of whether Filipino or Foreigner.

Plan C(g) Then, Moves to have her put on one of my European Bank accounts Gibraltar I think best as it is Pound Sterling.

On the Child Thing, I have a Stepdaughter of 17 so just don't know about the Situation there should it be me that goes First, Should Azon goes First I believe there is something fairly new about us (Foreigners) for our Lifetime. Am I correct on this ?

[jrlee183]

4 minutes ago, Jack Peterson said:

Plan C(g) Then, Moves to have her put on one of my European Bank accounts Gibraltar I think best as it is Pound Sterling.

On the Child Thing, I have a Stepdaughter of 17 so just don't know about the Situation there should it be me that goes First, Should Azon goes First I believe there is something fairly new about us (Foreigners) for our Lifetime. Am I correct on this ?

Not that I am aware of.  Unless your stepdaughter is legally adopted by you, then she would be considered as a 'stranger' from a succession perspective.  You would only be able to include her in your will after your compulsory heirs have allocated their share. 

Of course from your wife's perspective then her daughter/your stepdaughter would be a compulsory heir on her estate and her entitlement would depend on whether she is a legitimate or illegitimate child (unfortunately this does make a difference). 

[Jack Peterson]

34 minutes ago, jrlee183 said:

Not that I am aware of. 

 This is what I was referring to from last year I believe

 ** I Heard A Foreigner Can Inherit Land In The Philippines**

Indeed, you heard right.  This is the “saving grace” for many foreigner/Filipino couples who want to buy property together here in the Philippines and have an assurance that the “foreigner ‘ half of the couple can continue living in the couple’s property.**

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

So is there any truth in this or more baloney?

 Just want to say Thank you for the time you spend on this, each day and new answers bring up new/re-emerging questions for us 

 

 

Jack 

Mr Lee and everyone, Morning All

[intrepid]

Frozen Bank Accounts until estate taxes are paid to BIR?  correct?  Is there a way to calculate about how much the estate taxes would be?  What would be an amount to have available to cover all the needed expenses upon death?

 

[jrlee183]

8 minutes ago, Jack Peterson said:

 This is what I was referring to from last year I believe

 ** I Heard A Foreigner Can Inherit Land In The Philippines**

Indeed, you heard right.  This is the “saving grace” for many foreigner/Filipino couples who want to buy property together here in the Philippines and have an assurance that the “foreigner ‘ half of the couple can continue living in the couple’s property.**

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

So is there any truth in this or more baloney?

 Just want to say Thank you for the time you spend on this, each day and new answers bring up new/re-emerging questions for us 

 

 

Jack 

Mr Lee and everyone, Morning All

 

It is true to an extent; Although Sections 3 and 8 of Article XII of the Constitution restrict the ownership of land by individuals to Filipinos and former Filipinos, Section 7 of the same Article allows foreign citizens to own land by way of legal inheritance.

Section 7: Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.

 

Basically, if your filipina wife dies before you without a Will then as her spouse you are a compulsory heir and entitled to your share of her estate.   HOWEVER, this is only good news if you are the only surviving compulsory heir.  If her parents are still alive then they will be entitled to their share too.  Likewise with children.   The end result is that the other heirs may want to 'cash in' their inheritance by way of selling the land/your home.   Whilst you can fight this it is an long and expensive process and something no one would want to experience.

Best solution for this is that you sign a long term renewable lease (25 or 50 years) that would legally entitle you to remain in the property even if it is sold. 

[jrlee183]

6 minutes ago, intrepid said:

Frozen Bank Accounts until estate taxes are paid to BIR?  correct?  Is there a way to calculate about how much the estate taxes would be?  What would be an amount to have available to cover all the needed expenses upon death?

 

 It depends on the size of your estate.  You can see the varying percentages on the link below:

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

I would say you should allow enough liquidity to cover at least six months living expenses, but if you want to be conservative then up to two years would be prudent as it can sometimes take this long to grant probate.

[Jollygoodfellow]

27 minutes ago, jrlee183 said:

Best solution for this is that you sign a long term renewable lease (25 or 50 years) that would legally entitle you to remain in the property even if it is sold. 

Are you referring to lease the family home from your spouse? 

Who are the persons disqualified to be lessees?

A husband and a wife cannot lease to each other their separate properties except if separation of property was agreed upon or if there has been judicial separation of property.
This is to prevent prejudice to creditors and to prevent the stronger spouse from influencing unduly the weaker spouse. 

http://realestatelawyer.com.ph/category/real-estate/law-on-lease/

[RBM]

45 minutes ago, intrepid said:

Frozen Bank Accounts until estate taxes are paid to BIR?  correct?  Is there a way to calculate about how much the estate taxes would be?  What would be an amount to have available to cover all the needed expenses upon death?

 

This is the point I was trying to make.

It is to me inconceivable if on paper your name is not connected to the property that estate duties would need to paid upon your passing.

yes joint accounts frozen, understandable how ever cannot grasp they can empower estate duties when the foreigner is not connected in any written way to said property.... 

[jrlee183]

13 minutes ago, Jollygoodfellow said:

Are you referring to lease the family home from your spouse? 

Who are the persons disqualified to be lessees?

A husband and a wife cannot lease to each other their separate properties except if separation of property was agreed upon or if there has been judicial separation of property.
This is to prevent prejudice to creditors and to prevent the stronger spouse from influencing unduly the weaker spouse. 

http://realestatelawyer.com.ph/category/real-estate/law-on-lease/

Correct, and this is where you would need to get a lawyer involved to ensure the correct structure.  One way would be to own the property through a corporation with a lease between the corporation and husband/wife.