What happen to your Bank Money /Investment when you Die

[marssie]

Morbid questions lang sissies. Just curious.

What will happen nga ba sa Bank Accounts, Mutual Funds, Stocks and other investment pag namatay ang tao at wala naman siyang Will na ginawa or naiwan.  Paano ang computation ng estate tax (yun ba ang tawag dun). 

[mameejhy]

All accounts will be frozen except Life Insurance proceeds. Yun frozen assets eh i-release lang kapag binayaran na ang estate tax. Everything, except Life Insurance benefits, will be part of the deceased's estate. Itong estate na ito ay mapupunta sa next of kin: asawa (legal), legitimate kids then sa illegitimate kids. Yun life insurance benefits direct mapupunta sa beneficiary/ ies. If irrevocable beneficiary, walang tax na kakaltasin; If revocable ay may tax.

Tax Rates - http://www.bir.gov.ph/taxinfo/tax_estate.htm#20138

[Ma.Jewel_1987]

Yan din iniisip ko,what if hindi nila alam na may savings ka and may stocks investment ka? Or lets say sabihin ko sa kanilang merun paanu yun makeclaim ng family ko?

[mameejhy]

Sunlife death claim: http://cdn.sunlife.com/static/philippines/How%20to%20file%20a%20claim/Static%20files/Checklist%20for%20Death%20Claim.pdf

[ikaela]

Here's a table of estate tax rates: http://www.bir.gov.ph/taxinfo/tax_estate.htm. In current rates, the BIR can take as much as 20% of the deceased person's properties and assets.

This is the Philippines -- maraming ways na makuha yung assets nung deceased person without having to pay taxes. This is the time to use utang-na-loob, corruption, and nepotism to your advantage, hehe. Time to get creative!

[marssie]

So for Bank Accounts advantage pala (kung good term kayo ng spouse mo ) na naka joint account para pwede niyang iwithdraw lahat ang pera ang transfer to other account without paying any taxes na? 

[PrincessC]

they will still freeze the account kahit joint.

[aquacharly]

So for Bank Accounts advantage pala (kung good term kayo ng spouse mo ) na naka joint account para pwede niyang iwithdraw lahat ang pera ang transfer to other account without paying any taxes na? 

Yes, or as I do with my secret accounts: I gave my most trusted sister & mom  pre-signed withdrawal slips.  They are also co-signatories to my SDBoxes, they hold the duplicate keys.

In the Phils, you must pay death taxes. Even those who leave no cash but one old house for all children to share -- are harassed. IMO.   So, you gotta throw something for the greedy to corrupt on.  That's what insurance is for. If I drop dead, the SunLife 5mio insurance should satisfy the howling for death taxes. Susko.  Just saying, but what do I know?

[mameejhy]

^Yes, that is the reason why investing in a life insurance is the best way for your money to reach your intended beneficiaries!

[marssie]

they will still freeze the account kahit joint.

But what you can do is since joint account naman, withdraw all the money and transfer to other accounts diba. To avoid paying for those taxes.

Yes, or as I do with my secret accounts: I gave my most trusted sister & mom  pre-signed withdrawal slips.  They are also co-signatories to my SDBoxes, they hold the duplicate keys.

Nice idea sis, pwede nga.

[london]

^ unahan na lang sa banko. if you have a good relationship with the bank/s, kahit alam na patay na e nawiwithdraw pa. but now medyo naghigpit na banks, siyempre hush hush sila dito. linabas na to sa newspaper last year lang ng bir and we asked banks pero wala pa naman daw ganun. but last month lang, a manager told us na yung tinatanong daw namin last time e enforced na. dati kasi sabihin lang ng bank na di nila alam na patay na e lusot na sila but now, malalagot na rin sila sa bir if nakuha ng patay yung pera kahit na may ka OR pa siya.

meron dito a Philippines na trusts accounts. kaso yun nga, you need to name those poperties/money to your beneficiary. not taxable kasi ang idea e wala na sa yo yung pera kundi nasa ibang tao na. same with insurance na irrevocable and beneficiary. BUT may mga cases din kasi na naaagrabyado ang may-ari talaga. so best na wag ipaalam sa taong yun na nasa kaya na nakapangalan yung mga yun. I know a few cases na kawawa ang magulang kasi nabigay na sa mga anak yung kayamanan, ayun yung magulang walag wala, as in dirt poor na ngayon. yung mga anak, ayun, nagpapakasasa sa yaman ng magulang.

good read yung THY WILL BE DONE na book. will give you some insights on estates.

nakalimutan ko pala itanong sa bank what if mas nauna pang namatay yung beneficiary mo sa trust account. what will happen to the money/properties. anyone knows?

[empire_maker16]

question?

what if kakamatay lang lets say wala pang death certficate etc etc.. tapos nakapirma na sa withdrawal slip para hindi na magbayad ng tax at kung ano ano pa pwede ba iwithdraw na yun agad? para wala ng tanong tanong din from the banks and kung kaclose mo naman para hindi sila mapahamak?

[ikaela]

^Pwede yan. Kaya iba sa atin dito meron nang pre-signed withdrawal slips that are entrusted to their next-of-kin. Basta in the event of that person's death, yun ang unang gagawin: kunin lahat ng withdrawable assets. First and foremost yan, bago pa asikasuhin yung death certificate and or even the corpse. LOL morbid joke.

@london: when someone dies, any money or property under his name will be considered part of his estate and will therefore be taxable. So in that situation, the dead person is not the beneficiary anymore, he is already the estate owner. That is one risk of putting assets under children's name while the parent is still living, but then again, what are the chances of the child dying before the parent.

Life insurance can help pay off estate taxes, but I want to reiterate what mameejhy and london said: the beneficiary you indicate on your insurance policy must be IRREVOCABLE, meaning you can't remove him/her from being a beneficiary without his/her consent and signature. If it's revocable, the law will still recognize those life insurance proceeds as your own and as part of your estate because you can change who gets the money to anyone anytime you like. Life insurance proceeds can still be taxable if people overlook this one seemingly tiny detail.

[j.adore]

My plan was also to give access to my accounts. So just to confirm, it has to be done right before the death certificate is filed?
Would banks know about deaths proactively? Or only if claim time na?

[empire_maker16]

ang hirap naman yan tho kaya naman natin bayaran estate tax kaso sayang naman kasi din yun.. so in short bago ma file ang death certificate kailangan mailipat na siguro pag kaclose mo sa bank wala na tanong tanong except lang pag landbank mausisa kasi yung mga yun..

[ikaela]

It has to be done before word gets out that the account holder is dead. 'Pag kumalat na and goody-goody law abider yung bank manager, eh 'di mahirap na asikasuhin yung accounts. Kahit na may signed withdrawal slips, baka magtanong pa yung bank employees and accuse you pa of tax evasion and fraud.

If the bank accounts have an online banking system, eh 'di much easier. Just link your accounts together and let your trustee know of the password. In case of death, he/she can just transfer the money with a mouse click, no questions asked, no withdrawal slips needed.

[j.adore]

Thanks! So annoying kasi na may tax pa din even in death

[empire_maker16]

Sis @ikaela, meaning pag my online banking ang bawat passbook at alam mo naman password... it means even after the death i mean yung hindi pa ngfile ng death certificate at hindi pa kalat sa mga bank manager... pwede i-transfer na lang ganun po ba ng isang click lang ng wala ng tanong tanong with the banker? so dapat pala ipaenroll ko din yung amin sa online banking para wala na usisa ng mga nasa banko and to avoid tax.. siguro magiiwan na lang onti para hindi isipin na inaavoid mo yung estate tax.. paano kaya kung more than 100M ang laman sa iba iba bank paano kaya ang estate tax nun? hindi ko magets yung formula or table ng BIR.

[ikaela]

^Yes, that is the gist of it, how you can use techology to your advantage.

The tax rates explained, and let's say the dead person's net estate is 100M:

The net estate is over 10M, so the base tax is already 1.215M (!). There is an excess 90M over the 10M, and that is also taxable by 20%. 20% x 90M = 18M (!!) in additional tax. Total death tax to be paid is 1.215M + 18M = 19.215M (!!!). That is how much blood the BIR can suck from you and your family.

If the estate is 200k and below, there is no tax.

As for how to legally escape paying estate taxes when the estate is already in the millions-billions, there are many ways. One is by setting up irrevocable living trusts. Another is through single-pay VULs through life insurance companies. Some also already transfer their assets while they are still living; these are still subject to donor's tax but not as big as the tax when dead.

[empire_maker16]

^^ oooohhhh  grabe naman talaga ang ating BIR ngayon.. imagine pinaghirapan yun ng tao for almost ilan years tapos ganun ganun lang nila makukuha agad? thanks for the info sa online banking but siyempre may mga instances kasi na biglaang namatay ganun.. kung medyo hindi madalian yun okay okay pa kasi maiaayos lahat.. pero pag biglaan? dapat my protection ang bank diyan kasi pinaghirapan ng depositor/client nila yun.. but sa online banking po ba pwede mag transfer lets say one transaction ng 50-100M agad without usisa pa sa may-ari (for the purpose na para hindi nila malaman na patay na agad at wala tax na mangyari)... kasi i think ang bank ayaw din nila mabawasan yung deposits nila sa banko nila pag kinuha ng BIR imagine mawawala ang 18-20M agad nila doon? so payag kaya sila maitransfer agad yun sa mga siblings or anak na my bank din sa kanila? para maintain din deposits na ganun sa bank nila... dapat ata dito close ng buong pamilya ang mga manager at kahera ng mga banko na meron sila big deposits