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Copernican solution to estate planning
(Article published in the April 30, 2001 issue of TODAY, Business Section)

I am prepared to shred now that small book entitled "An Introduction to Estate Planning in the Philippines" which I dedicated two decades and two years ago to "my legal wife, Carmelita",. Not that Carmelita had ceased to be my legal wife.

The marital knot tied by the Rev. Fr. Jose A. Cruz S.J., my Philosophy mentor and spiritual guide, outlived him and continues to be as sturdy as the wedding ring I purchased from my Ateneo schoolmate, Ronnie Velayo, more than thirty years ago.

And not that the principles I explained in that little volume, published by friend, Ben Ramos of National Book Store, have become outdated.

Human nature hasn’t changed much lately. While family law, tax tables, and value of property are no longer what they used to be, the hopes and fears, the good and greed, in estate planners are still the same.

It is just that Gemme Ambubuyog, father of Roselle, summa cum laude and Ateneo University Valedictorian of College Batch 2001, proved that I was wrong all along with this thesis that estate planning is not about planning by the owner. It is about planning for those who have need of the planner’s love.
 










Traditionally, the point of departure of estate planning is the property owner--the one who pays the fees of the bank, the lawyers, the accountants, the insurance underwriter, and everyone else in his so-called estate planning team.

He is asked to make an inventory of what he has and what he most likely will have. Everything goes into the pot: his residence, his business interest, his club shares, his personal effects. Plus what he expects to receive from his own parents by way of inheritance or gift, his retirement or separation benefit, the insurance proceeds upon the death of his dad, mother, or relative- everything that has of value.

Once the estate owner is sufficiently pleased with himself, he is ready for the scare treatment. He does not and cannot dispose of all that exactly in the way he wants to.

The government will get about 20 percent of what he leaves behind--that on top of what the government has taken through the years and every year as partner in building individual wealth, the yearly income tax and the transactional value added tax.

After the tax man come the creditors and service providers – a politically correct label for accountants, property administrators, executors and administrators, and lawyers. In the end, only a fraction will actually go to your children and chosen beneficiaries.

So what must an estate owner do?

    1. Plan now!
    2. Transfer estate and assets to your children during your lifetime so you can avoid (not evade) paying taxes.
    3. Write a will in order to alter the way the law wants to distribute your property upon your death.
    4. Establish corporations to hold your properties so that, when you die, your properties are not in your name.
    5. Set up asset management accounts so those professional bankers, who are presumably good at investing funds, can administer the money you entrust.
    6. Buy life insurance – that wonderful financial instrument that generates an instant estate the very instant you breath your last.

All that is the science and art of traditional estate planning. As the Earth, in the mind of Ptolemy, was the center of the universe, everything revolved around the estate owner and what he wants. Until 24 March 2001.

At past three in the afternoon, came the Copernican revolution in estate planning.

Gemme Ambubuyog guided his daughter Roselle up center stage and unto the audience assembled at the Ateneo University’s High School covered courts at Loyola Heights –and the rest of the country – presented his star witness.

Roselle testified: "Much of my life is a result of the great sacrifices my family has made and continues to make. My father left the job he held for 23 years just to concentrate on me when I lost my sight in 1986. He drives me to school, picks me up at the end of the day, accompanies me to competitions, and always gives me moral support in the various activities in which I participate, although most of the time, all this prevents him from going to Philvocs, where he is now a consultant."

She continues: "At home, my mother and brothers read to me textbooks and references, since they are not always available in Braille. Therefore, whenever I have to stay up late to study, the whole family is kept awake all night. In fact, I am not alone in graduating with honors, my family, especially my father, deserves even more the recognition I will receive, because my achievements are theirs as well."

Now that is what estate planning is and should be. The process of using one’s time, treasure, and talent in a manner that is beneficiary-centered and need-driven, as opposed to owner-designed and in accordance with his wishes.

True estate planning is focused first and last on putting one’s resources at the disposition of a loved one who needs them to overcome his or her impairment. This applies not only to loved ones who are physically impaired, but to all we love.

Our loved-ones, hard to admit, are all impaired. "Everyone experiences disabilities one way or another," said Roselle, "mine is just more obvious than yours."

Some of our loved ones have eyes but cannot see the values we have been trying to teach; a number have hands that cannot lift the burdens off their own backs; others have feet that walk in trembling steps and stumble even in the daylight. In ways more than one, all our loved-ones are sightless, armless, legless, and, as the very rich time and again realize, one or two or three of them can be heartless. Their need to be helped, and not our wish, is the proper starting point for estate planning.

Estate planning is nothing if it is not planning for, for a someone in need. Wills, trusts, family corporations, inter vivos gifts, insurance, all derive their significance not from the taxes they save for the estate owner nor from the efficiency by which they work towards the estate owner’s objectives.

They are worth the paper they are written on if and only if they make our beloved blind see, our beloved lame walk, our beloved deaf hear, and our beloved dumb speak.

All these we learn from Gemme Ambubuyog, doctor of estate planning, honoris causa, from the tough life ateneum.

 

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