If you’re between 25 and 45 and expected to take over, your main risks aren’t just about having a will. The real challenges are control, continuity, liquidity, and meeting family expectations under Philippine succession rules.

TABLE OF CONTENTS

1. TL;DR

2. What estate planning is (for business owners and real estate families)

3. A simple numbers example

4. What estate planning is not

5. The successor’s first 30-day checklist

6. Quick consultation

TL;DR

Estate planning means taking steps while everyone is still alive, so that when someone passes away or becomes unable to manage their affairs, your family can transfer ownership and control smoothly, without delays, arguments, or forced asset sales.

If you’re a successor, focus on who can sign documents, what assets exist with a complete inventory, how to get cash for taxes and settlement costs, and how decisions are made for properties and businesses.

WHAT ESTATE PLANNING IS IN THE PHILIPPINES

Estate planning covers six key areas that need to work together. If any part is missing, the plan might look good on paper but fall apart when it matters most.

1. People and decision rights

   Who decides whether the main person is alive but can’t sign, attend meetings, or is medically unable to do so? This is why you need up-to-date corporate records, apparent board authority, and well-prepared powers of attorney.

2. A real inventory you can execute

   It’s not enough to say, “We have properties.” You need a detailed list with titles, locations, TCT numbers, tax declarations, mortgage details, leases, and who’s collecting rent now. Without this, heirs might spend months just proving what’s there.

3. Legal transfer rules that match reality

   The Philippines succession law includes rules about compulsory heirs and reserved shares. You need to plan within these limits and ensure your intentions, documents, and ownership structures align so the transfer is valid.

4. Tax and settlement mechanics

   As a baseline, the estate tax is 6% of the net estate, and the estate tax return is generally due within one year of death.

   For families with businesses or lots of real estate, the main risk isn’t just the 6 percent tax. The bigger problem is delays, penalties, and business disruptions if you can’t sell, refinance, or transfer properties because paperwork is incomplete.

5. Liquidity planning

   Estate taxes, professional fees, and settlement costs must be paid in cash. If there isn’t enough cash, heirs might have to sell a valuable property quickly or borrow money under pressure. Insurance can help, but it is one tool, not the whole plan.

6. Governance and conflict prevention

   Disputes usually happen when authority is unclear, effort and benefits aren’t equal, or promises are vague. Estate planning helps by setting clear roles, voting rules, dividend policies, buy-sell terms, and family agreements that match how your family works.

A SIMPLE NUMBERS EXAMPLE

(WHY SUCCESSORS GET FORCED INTO BAD DECISIONS)

Let’s say a parent passes away with a net estate of PHP 120,000,000. The 6 percent estate tax means PHP 7,200,000 is due, plus settlement costs.

Now imagine the family only has PHP 1,500,000 in cash because rent collection is informal, some accounts are frozen, and property titles are not organized.

In such a case, heirs often end up selling a property quickly, taking out a short-term loan with incomplete paperwork, or delaying and allowing issues to escalate.

A practical solution in this situation would be to create a comprehensive asset inventory and formalize rent collection processes well in advance.

This approach increases transparency and accessibility of funds, thereby reducing the likelihood of rushed sales or hasty borrowing during estate settlement.

Estate planning helps avoid these problems. It clarifies where cash will come from, who can sign documents, which assets can be sold if needed, and how to keep the process running smoothly.

WHAT ESTATE PLANNING IS NOT

1. Estate planning isn’t just about having a will. A will is only one document. For families with several companies and properties, what matters are the titles, share registries, corporate authority, paperwork, and how everything is carried out.

2. Estate planning is not about avoiding taxes at all costs. For example, if a family undervalues property to reduce estate taxes, the Bureau of Internal Revenue may later reassess the valuation, resulting in denied deductions, interest charges, and possible legal disputes among heirs.

3. Such shortcuts increase risks and often lead to delays, penalties, and potential conflicts during the estate settlement process.

4. Estate planning doesn’t mean you should automatically add your children to property titles. Doing this can lead to loss of control, creditor risks, problems if a child gets married, and conflicts if ownership is shared but contributions are not equal.

5. Estate planning isn’t about thinking life insurance solves everything. Insurance gives you cash, but it does not fix unclear ownership, missing titles, undocumented loans, or an outdated shareholder setup.

6. Estate planning isn’t just a one-time meeting with a lawyer. For successors, it is an ongoing process. Businesses grow, properties get mortgaged, family situations change, and the plan needs regular updates.

7. Estate planning isn’t just for when someone dies. Incapacity can be even more disruptive for a successor, since the founder might still be alive but unable to sign or manage things.

THE SUCCESSOR’S FIRST 30-DAY CHECKLIST

Week 1: Build the inventory

According to the Respicio Law Office, compiling an inventory should include all assets, such as property, business interests, bank accounts, loans receivable, insurance policies, and key contracts, and should ensure the location of the original documents is recorded.

Week 2: Map control and signing authority

A report from the Respicio Law Office recommends identifying, for each asset, who currently has signing authority and outlining procedures for when the primary signatory is unavailable.

Week 3: Identify the must-not-sell assets

Identify your flagship property, main operating company, and any land you plan to keep for the next ten years.

Week 4: Stress-test cash needs

Calculate the anticipated amounts required for estate taxes and settlement expenses, and then develop a clear liquidity plan that designates the specific sources of cash to cover these obligations within 30 to 90 days.

For instance, this may involve identifying which bank accounts, insurance proceeds, or pre-arranged credit facilities can be accessed promptly to ensure timely settlement and prevent forced asset sales.

Parallel track: Clarify family expectations early

Decide who will manage operations, who will get distributions, and what to do if an heir wants to leave.

QUICK CONSULTATION

If you’re a successor and want to handle this smoothly and discreetly, book a quick consultation with me.

In just 20 to 30 minutes, we will review your current situation, looking at your inventory, control, liquidity, and the main documentation gaps.

You will get a short action list you can use with your family’s lawyer, accountant, and corporate secretary.