Life Insurance as an Effective Tool
There are other tools for asset protection in the Philippines - sale, donations, wills, trusts, corporations, joint ownership and co-ownership, gifts, etc. But life insurance is the most effective. It provides cash to meet any expense in case of sudden death.
Life insurance proceeds pay for debts and liabilities, taxes, final expenses and other fees without selling assets or borrowing money. It helps provide for orderly and equitable distribution of assets to heirs based on beneficiary designation.
Life insurance creates guaranteed cash - cash bought at a discount through the premium deposits. Proceeds are tax-free when adult beneficiaries are designated as irrevocable.
Proceeds can pay for specific taxes and fees. Taxes and fees can wipe out a substantial portion of your assets or estate. These are fixed based on the total value of your assets - your estate upon death. Check what are the different types of life insurance policies here.
Do-It-Yourself Asset Inventory
For Asset Protection in the Philippines
This finds out the amount of insurance you need for estate and other taxes. This can be done by listing and giving value based on the four types of property - personal property, real estate, insurance and business interests.
Personal property includes bank deposits, stocks, bonds, mutual funds and money market placements. Jewelry, collections and other movables also fall under this type. Give each property an estimate value.
Real estate is your home, vacation houses and rental property. Include any additional properties such as parcels of land and buildings. How much is the market value of each property?
Insurance includes your life and accident insurance and health policies. What are the face amounts or how much are you covered for each plan? Are you paying for any policies for anyone else? Include them and their face amounts also.
Include your fringe benefits such as pension or profit sharing plans. How much would you give value to any of these?
Business interest is your share in your business. List what type of business it is and the type of ownership. Assess its fair market value and get your percent share. How much would you sell it? How much would you pay for it?
You may also get corporate asset protection in the Philippines. The same process applies - list and estimate the value of the corporate assets. The balance sheet for the assets gives the exact figures.
Get the total value of your assets or estate and see how much estate tax your family needs upon your death. You can get the amount of estate tax from the BIR through the Estate Tax Form.
You can then see how much more insurance cover you will need. Bear in mind that this insurance only pertains to estate tax. Other fees and expenses should be considered. It is better to ask for the services of a professional adviser to help you more with asset protection in the Philippines...
Planning for asset protection in the Philippines, previous page.
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