Estate Planning


Are you aware that in the event of death, not everything you accumulated will be passed on to your heirs?

You work hard to provide a bright future for your family and of course, to accumulate assets such as a wonderful house, efficient car, wise investments, great business and other assets.
When something happens, I’m sure you would want SOLELY your loved ones to benefit from that hard-earned wealth.


However this is not always the case because when unprepared, not everything can be passed on to your rightful heirs. You have to go through the BIR first to pay proper Estate Taxes.


To prevent this from happening, the key is to consider and protect everything you care about. Would you like an orderly and cost-efficient transfer of your assets to your heirs?

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First and foremost, let me share with you what constitutes an estate or what can be transferred to your loved ones. As you can see, your estate may be in the form of a real or financial asset—it can be a real estate, property, business, vehicle, bank savings accounts. The bottom line is, EVERYTHING that you own forms part of your estate.

So why are we saying earlier that not everything can be passed on to your heirs? Well, the culprit is the ESTATE TAX or what is sometimes referred to as INHERITANCE TRANSFER FEE. That is, in the event of death, the family will need to pay the government up to 20% of the estate’s value before it can be transferred to their names.


To give you a better idea on how the government does its computation, let us assign some figures.

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This is the Estate Tax table used in computing estate tax or transfer fee.
Let’s say an individual has a total net estate of 30 Mil. By looking at the table, you will see that he belongs to the “10 Mil and over” bracket.


Upon death, bank accounts will automatically be frozen. The tax shall be 1,215,000 plus 4 Mil—which is 20% of the excess over 10M (30 Mil – 10 Mil = 20 Mil). Adding everything together will give us a total estate tax of 5,215,000—this is the amount that the family needs to settle to the government to transfer the ownership to their names.

Now you can clearly see how an estate tax diminishes the value that would go to the family. Instead of 30 Mil, they will only receive 24.8 Mil worth of estate (30 Mil – 5.2Mil).

Some Estate Tax problems and sad stories:

• Family failing to settle the estate tax because they don’t have ready or instant cash.
• Loved ones borrowing money from relatives/ downgrading their way of living.
• Shrinking the estate’s value because of penalties incurred due to delayed tax payment—until nothing is left.

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So how can one ensure an efficient transfer of wealth to his/ her loved ones? The bright choice is to create a liquid fund to settle your estate taxes. Let me explain how it works.

Illustration 1: No Life Insurance

We have here an individual who worked hard and was able to put up an estate equivalent to 30 Mil. In the event of untimely death, bank accounts will automatically be frozen and the family will need to settle an estate tax of 5,215,000 to the government. When there is no ready cash, the value will not only diminish from 30 Mil to 24.7 Mil but worse, this will place the family in enormous financial and emotional trauma.

When there is no ready cash, the following might take place:

  • family borrowing money from relatives and banks
  • losing control/ ownership over the properties
  • selling the property at a “loss”

Illustration 2: Planned ahead with Sun Life’s Insurance Plan for Estate Taxes

Now let’s look at the 2nd individual who made the bright choice of purchasing a life insurance policy. This person also worked hard and was able to accumulate an estate worth 30 Mil.

The big difference here is that he has foresight and created a liquid fund equivalent to the estate tax that his family will eventually need to make an orderly transfer. Such as, in the event of an untimely death, insurance proceeds of 5,215,000 will be readily available to the loved ones. Thus, they no longer need to worry about how they can generate the money for the transfer fee. With a life insurance plan, he is assured that EVERYTHING he has worked hard for will go to his rightful heirs. Imagine the peace of mind that it can bring!

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Perhaps you’re wondering how much insurance you really need. Or if you already have an existing coverage, would you like to know if it is actually enough?

Being a complex process, estate tax is best computed and handled by a team of experts, usually composed of a lawyer and accountant. But allow me to perform a simple calculation to give you an overview of how the “experts” determine the right amount for estate taxes.


I have here a client who owns 30 Mil worth of assets. With the use of estate tax table, we will derive a total transfer fee of 5,215,000– -this is the amount that will eventually be needed by the family to transfer the ownership of the properties to their names. After computing for the tax, we must also consider and deduct any existing insurance. In this example, there is still a shortfall of 3,215,000. This amount is now the “insurance gap” that we will try to address using any of our Sun Life Solutions.

Let me share with you some sample solutions that I’ve designed for my clients in closing this gap.

Solution #1: Term Insurance Plan

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This first plan here is best suited for clients who are looking for an affordable estate preservation plan. For an annual budget that starts at 34,559 and increases every 5 years, his family will get insurance proceeds of 3,215,000, money readily available in settling the estate tax should anything happen.

As you can see, by creating a liquid fund today and setting aside a total payment of 1,310,555, he has the security that all of his assets will be passed on to his rightful heirs. Which would you rather assume: planning today at a lower cost or failing to plan and burdening the family at a much higher cost?

Solution #2: Life Insurance + Investment Plan

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This next sample is a 2-in-1 plan since I’m able to offer my clients Estate Preservation + Fund Accumulation.

For an annual premium of 213,219 payable for 10 years, the family gets a death benefit of 3,215,000, which they could use to pay for the estate tax. On top of this, my client can potentially increase his estate through the projected “side fund” of 4.06 Mil by end of year 20/ age 75. Thus, instead of just 30 Mil, 34.06 Mil will go to his rightful heirs. This additional money can be used by the family for their life milestones, such as education, travel, business, etc.

Wouldn’t it be great to have security and at the same time, the opportunity to augment what you can pass on to your loved ones?

Solution #3: Mutual Funds Investment + Term Insurance Plan

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Lastly, we have here a solely investment vehicle bundled with a protection plan—similar to my second sample, this also offers my clients Estate Preservation + Fund Accumulation.

For an annual budget of 100,000 payable for 10 years, the family will get a ready cash of 3,215,000 in the form of the insurance proceeds for the estate tax and a projected side fund of 5.8 Mil for their other needs. As you can see by starting earlier (age 40 as opposed to 55), he can pass on a much bigger additional fund to his loved ones on top of his 30 Mil worth of assets.


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Curious how much estate tax is due given your current assets today? Wondering how much liquid funds you’d need to settle your inheritance tax? Do you know the market value of your real and financial assets? Do you have any existing insurance plans solely for estate planning?

We can calculate this for you very quickly.CONTACT US OR REQUEST FOR AN APPOINTMENT

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Secure budget:
So what’s a comfortable annual budget that you can set aside to
• protect everything that you care about?
• create a liquid fund to settle estate taxes?

Depending on your budget, we can compute how much is your estate tax due. We can compute how much assets you’d need to protect in order to ensure that you can transfer the amount 100% to your children and heirs. These are the steps that we will go through:


  • We will identify and prioritize your health protection needs and shortfall
  • We will compute how much those will cost in the future and adjust based on your financial situation
  • We will develop a financial plan customized to your goals and budget

IMPLEMENT– We will choose the appropriate product solutions for your life goals
REVIEW– We will track your progress in achieving your life goals

Money Monkeys can assist you:




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