Estate Planning and Life Insurance, part 2By Randell Tiongson on January 27th, 2010
Christianity has modernized our mystic concept and infused it into our laws. “Birth determines [legal] personality. Death extinguishes it.” You, as the owner of the estate, may be about to leave this mundane world, but your legacy may be passed on to your heirs and for generations to come, and that’s what makes you immortal.
People have been looking at ways on how to distribute wealth to their heirs—hence, estate planning. This is a concept that is looked at as a design, a scheme, to help a person avoid the impact of heavy taxes on a person’s “privilege” of accumulating wealth and passing it on to his heirs.
Yes, the Tax Code will tell you that what you have is a mere privilege. Settling taxes first is the operative act before the family can acquire the properties left to them.
Is inheriting automatic? How automatic is “automatic”? my beloved professor so loves to ask.
Technically so, inheriting your parent’s or grandparent’s properties is not simply “automatic” even when the law says “by operation of law.”
Estate planning is much more than simply avoiding taxes. Tax is not always the main consideration when one looks at estate planning. This writer believes that estate planning is all about supervision, conservation and distribution. Tax avoidance is just an incident of what planning brings to him.
There are many tools for planning one’s estate in the aspect of conservation. Let us, however, focus on the most simple yet effective of them all—that is, life insurance.
Taxes are the lifeblood of the state. Its collection should not be in any way delayed. It cannot be overemphasized how important taxes are. The Supreme Court says in a myriad of cases that if there is doubt on whether or not to grant tax exemption, the doubt shall be resolved against the taxpayer. Avoiding taxes and grant of exemptions are frowned upon. Nonpayment of taxes even merits a criminal offense. The Tax Code also assesses the taxpayer, “whichever is higher.” … (to be continued)
Catch Part 3…