What happen to your Bank Money /Investment when you Die

[empire_maker16]

kaya ba sa bank dapat kung wealthy family ka or mapera ang advice sa amin since nagbusiness kami eh dapat sa company/holding nakalagay ang cash para daw wala na dapat ifreeze or what especially pag corporation kasi paiba iba naman ang holders nun lalo kung closed family corp daw yun.

sa real properties, my mga alam ako nagagawan nila paraan paano maililipat na hindi na nagbabayad ng estate tax yun nga lang capital gain tax ang binabayaran. hehe

[PetiksPinayInvestor]

^ ingat lang po sa ganyan. Gumagaling na ang BIR. Meron naman way to minimize taxes. Tax evasion is a criminal case. at meron na po nahuli.

[ikaela]

There are many ways to avoid -- not evade -- paying estate tax. I like this blog post for breaking it down: http://www.personalfinanceapprentice.com/2013/11/estate-planning-for-newbies-part2-6.html. Simplest, most straightforward way is to get life insurance. It has the most pros too: it gives the beneficiaries money to pay estate taxes, the estate owner retains full control of his assets until death, and it has the least amount of paperwork.

Creating a family corporation is listed there. We tried going this route for my own family, but OMG at the paperwork, legalities, and requirements. It might be worth going through all the trouble though if you are really a high net-worth family.

[sachism]

^ that's right

And if you want to make it tax-free, make it irrevocable. 

[empire_maker16]

sa mga properties yup pwede na isell sa mga heir or gawa will para sa mga heir.. but paano sa mga nasa cash on bank under sa personal name? since ayaw nga nila iexpose yung wealth nila sa mga corporation dahil naka lista but paano naman daw maprevent ang estate tax na malaki babayaran dahil malaki talaga if ever.. sa life insurance naman mostly ilan years bago pwede mo ilabas.. paano kung biglang maging need na..?

[ikaela]

^The same apply. I think cash is actually easier. You can:

1. Open accounts in your family's names. Devise a way where you'll still be the one handling the credits and debits -- maybe only you know the password or what. Your family members will essentially be only your dummies. If you die first, then the money is already in their names anyways. The problem is if they unexpectedly pass away before you do.

2. Set-up a living trust. See the blog post.

3. Divide the amounts among single-pay VULs. Again, utilizing insurance companies is the simplest and easiest way. And no, it won't take years. Ask insurance agents -- they love to crow about how they know someone who was a beneficiary who got the face amount/fund value within mere days or hours.

[crzysxycl]

Nice thread! Backread muna ako..

[rave21lala]

magkano ba magpagawa ng Extrajudicial Settlement of Estate? para lang sya sa money sa bank amounting to 300k. wala naman real estate property na naiwan.

[mameejhy]

sa mga properties yup pwede na isell sa mga heir or gawa will para sa mga heir.. but paano sa mga nasa cash on bank under sa personal name? since ayaw nga nila iexpose yung wealth nila sa mga corporation dahil naka lista but paano naman daw maprevent ang estate tax na malaki babayaran dahil malaki talaga if ever.. sa life insurance naman mostly ilan years bago pwede mo ilabas.. paano kung biglang maging need na..?

Sis, kapag gumawa ng last will and testament, magbabayad pa rin ng estate tax. Except kung ibibigay sa heir habang buhay pa si parent - pero "donation" yun at kailangan pa rin magbayad ng tax

Sis, sa life insurance pwede makuha ang proceeds within minimum of 3 days as long as you have the complete requirements to claim the money.

[happynlove]

I love this topic! ito yung most often naooverlook when building up our own saving accounts or investments, and on families where parehas employed ang parents and children.

With regard to living trust, https://www.bpiassetmanagement.com/pages/living-trusts/ nabasa ko sa BPI, looks like you have to put your money in an investment vehicle then you'll earn tax free income. does trust account have a minimum amount or value? say, minimum of 500k worth of assets?

[j.adore]

I asked the bank and they said that if the joint account is OR, there's nothing to worry in the event of death of one party.

[sachism]

Really sis? Akala ko before 50%. Thanks

[happynlove]

Kaya pala lola ko inadvice lang ng bank to make it a joint acoount

[waychraych]

I asked the bank and they said that if the joint account is OR, there's nothing to worry in the event of death of one party.

Not entirely true. Let's say you have a joint account with your spouse and you have  a savings account worth 500,000. Once you informed the bank that your spouse died, his/her half  (250k) will be on hold/you won't be able to withdraw unless you settle the estate tax. However, you can withdraw your share.

If you have a joint account and the other account holder died, better withdraw the funds WITHOUT telling the bank first that the other account holder already passed away. Honestly, it really depends on the bank. There are some people from the bank who will advise you to withdraw your money (under joint account) even if you already told them na deads na yung ka-joint. Others strict talaga, yung share mo lang makukuha mo.

It's always better to have a joint account (not just spouses, pwede rin siblings, parent/child) so in case someone happens to the other account holder, the other one can still retrieve the money without the estate tax.

One  thing I also suggest if ayaw niyo nang may kajoint, enroll your accounts to your bank's online facility. Almost lahat naman ng banks ngayon may online banking. Enroll a family member's account in your bank's online facility. Then list your bank details somewhere and let someone from your family know where it is so if ever someone happens to you, that person can transfer your money to his/her account and withdraw it for retrieval and avoid the taxes.

[lytblu]

namatay last 2014 dad ko pero yun pera nya sa bank until now di pa namin nakukuha dahil hindi namin alam kung ano pwede gawin. ang alam ko less than 200k lang naman yun pera naiwan. ano pinakamabilis at pinamura na paraan para makuha namin? may nagsabi kasi kasi kelangan idaan sa lawyer, pero kung malaki sisingilin samin eh baka yun pera sa pagbayad lang ng lawyer mapupunta. help naman. thanks.

[ikaela]

^Anong banko yan? Strikto kasi talaga mga banko pagdating sa mga ganyan, lalo na kapag big banks. Kailangan talaga idaan sa lawyer. Maraming papeles at matagal na hintayan sa mga signature, approval, and release.

Meron pa bang ibang assets (like land/real estate, cars, stocks, other bank accounts) na naiwan ang dad mo na nasa pangalan niya? Para isabay niyo na lahat pag-process. Nagaadjust naman ang mga lawyer ng fees nila depende sa kaso, kaya okay lang kahit maliit na amount lang ang i-c-claim niyo. At hindi rin naman maliit na amount yung less than 200k ha, six digits pa rin yun.

Ask your lawyer about the steps in settling estate taxes. Even if your dad left few assets and it won't be taxable, you will still need the clearance from BIR in claiming the <200k from the bank.

[scruffs]

General rule, it will become part of the decedent's estate. Strictly speaking, before you can get hold of it, need to pay estate taxes. Not sure kung need talaga ng lawyer to do this. But an accountant can do the estate tax returns and then basta cleared of any tax liabilities yung estate then puwede makuha ng mga heirs yung laman ng bank account.

Usually ang strategy nga is to not inform the bank muna na patay na yung may-ari ng deposit. But it depends. If it's in a savings account na may ATM card I think no problem yun, so long as alam niyo yung pin ng card. Medyo komplikado lang kapag thru passbook and need ng signatory.

Kung joint nga, and it's a OR or AND/OR, then puwede yung sinabi ni sis waychraych.

[ikaela]

Once the bank knows that a depositor has died, they become very strict with policies (especially if you don't know anyone from the inside). It's because they don't want it to be their asses on the line more than anything else, really.

Banks require the same general documents before releasing funds from a dead depositor's account, and these are:
1. Certified true copy of depositor's death certificate
2. Certified true copies of heir/s' birth certificates and/or marriage contracts
3. Letter from the heirs listing the details of the deceased depositor's account/s and stating that they are the legal claimants of the account/s
4. Proof of settlement of the estate, whether judicially or extra-judicially

Number 4 is where it gets bloody. If you settle judicially, the bank will then only require a court order, but that means that you have to file the whole settlement of estate with the court.

If you settle extra-judicially -- meaning the family can agree to divide the deceased's estate amongst themselves -- then that's good. But you are in for a lot of work. Filing the extrajudicial settlement is a monster in its own. You then have to provide original or certified true copies of:
A. The extrajudicial settlement itself
B. Affidavit of publication of the extrajudicial settlement and partition of the estate in a newspaper once a week for three consecutive weeks
C. BIR's certification of payment or clearance of estate tax -- expect to wait up to a year for this
D. Registration with Register of Deeds of extrajudicial settlement -- this adds another few months of waiting
E. Heir's bond -- you purchase this from a non-life insurance company. It's insurance for the bank in case there will be other claimants who come after the deceased's accounts after they've released the funds
F. Affidavit of quitclaim with indemnity undertaking -- the bank makes the heirs sign this form, which basically says that they're washing their hands clean in case claimants other than the legal heirs come out of the woodwork and go after the deceased's accounts

More problems and paperwork arise if any of the heirs are minors, if a few years have passed since the death of the depositor (bigger BIR penalties will apply), and, of course, if the heirs cannot agree on how the deceased's estate will be divided.

This is old, but I find this article to still be relevant today: What to Do When Somebody Dies POINT OF LAW By POINT OF LAW by Teresita J. Herbosa