Creating An Estate Plan
The attorney’s at FIL-AM LAWYERS have guided many U.S. and Philippine based clients with the creation of individual and family Wills and Trusts over the past 25 years.
Our attorneys offer a range of services from simple estate plans to sophisticated planning techniques for individuals, families and business owners. We will help you ensure that your assets go to your intended beneficiaries and that the maximum amount of wealth is preserved for your loved ones.
Creating a “Situs” (where the property is located) estate plan is often necessary when planning for assets located in a foreign country. It is imperative that the Plan is prepared by a licensed attorney in that jurisdiction in order to ensure that the courts of that country will not only recognize that estate plan but also allow the administration of the decedent’s estate according to his wishes.
One little deviation from the requirements of the Civil Code can cause the entire Will to fail. Therefore, many will resort to creating a “Holographic Will,” which does not require much formality other than it must entirely written, dated and signed by the testator. The problem with “Holographic Wills” is that most people who are writing their own Wills are not familiar with the “forced heirship” rules of the Philippines, referred to as Legitime. As such, if a handwritten Will violates the rights of any of the heirs under the Philippine law of Legitime, then the Holographic Will can also fail and will not be enforceable.
The use of a Will is the centerpiece of estate planning in the Philippines. Unfortunately, creating a formal Will (referred to as a “Notarial Will”) in the Philippines has it’s challenges due to the strict requirements of Philippine law in creating such document. Below is an excerpt from the Philippine Civil Code governing the creation of a Notarial Will:
Our attorneys can help guide you through this process to ensure your estate plan does not fail.
Art. 805. Every will, other than a holographic will, must be subscribed at the end thereof by the testator himself or by the testator’s name written by some other person in his presence, and by his express direction, and attested and subscribed by three or more credible witnesses in the presence of the testator and of one another. The testator or the person requested by him to write his name and the instrumental witnesses of the will, shall also sign, as aforesaid, each and every page thereof, except the last, on the left margin, and all the pages shall be numbered correlatively in letters placed on the upper part of each page. The attestation shall state the number of pages used upon which the will is written, and the fact that the testator signed the will and every page thereof, or caused some other person to write his name, under his express direction, in the presence of the instrumental witnesses, and that the latter witnessed and signed the will and all the pages thereof in the presence of the testator and of one another. If the attestation clause is in a language not known to the witnesses, it shall be interpreted to them.
Art. 806. Every will must be acknowledged before a notary public by the testator and the witnesses. The notary public shall not be required to retain a copy of the will, or file another with the office of the Clerk of court.
Revocable trusts in the Philippines, otherwise known as “living trusts," have, until very recently, only been utilized by banks and financial institutions for their clients. Philippine revocable trusts do not operate the same way as in the United States. For example, title to real property holdings are not transferred (also known as “funding”) in a traditional Philippine trust; so probate is not avoided on these real property holdings upon the death of the owner.
Many U.S. lawyers over the years have requested for help (from Fil-Am lawyers and its affiliate Law Firm in the Philippines) in “funding” their U.S. client’s Philippine based assets into a U.S. Living Trust. Unfortunately, due to the differences in the laws between the two countries, even if the Philippine assets are successfully “funded” in a U.S.
Trust, there is no guarantee that such Trusts will be recognized under Philippine laws.
Is trust, therefore, a useless legal instrument in the Philippines? No, it is not. Fortunately, our team has developed a trust document that conforms to Philippine law and jurisprudence, and qualifies as a method of “partition” that can avoid probate.