Articles in TODAY
(Article published in the September 10, 2001 issue of TODAY, Business Section)Estate planning in the Philippines is not a major field of practice because not many people have estates large enough to need planning that costs money.
Of the few who do have large estates worth, the cost of paying for planning advice, a good number believe that the taxman and other threats to their wealth can, without fail, be fended off by the right amount of money landing in the pockets of the right people.
The few others do not know they can plan or, even if they know, couldnt care less. This is the only group from which the government is able to collect the right amount of taxes-both while they are still alive and upon their deaths.
The recourse, therefore, for foolish Filipino lawyers like me who insist on doing estate planning is to expand our services to the target market either by designing plans suited to those with no estate to speak of ("non-estate planning," in the words of Notre Dame Law School dean, Thomas L. Shaffer, in his book "The Planning and Drafting of Wills and Trusts") or helping the poor become rich.
Both alternatives are neither easy nor lucrative, and that is why we are called foolish.
There is, however, reason behind this madness.
The countrys middle class, though not growing as rapidly as we want, is in fact growing. Already, there is a burgeoning sector of people in their 40s and 50s whose cares center mostly on their children and the settlement of their debts - particularly credit cards as well as housing and appliance loans pushed by institutions of profit with neither face nor heart.
These people need help in providing for the support of their children and aging parents should they die before their time.
They also need help in maximizing their benefits from the compulsory insurance systems of the GSIS or the SSS, in safeguarding their vested benefits under retirement and profit-sharing plans voluntarily provided by their employers, or won for them by their labor unions, and in availing themselves of government programs often accessible only by plowing through bureaucratic sludge.
There is likewise merit in joining the effort to help the poor gain access to wealth. Hernando De Sotto, Peruvian economist and author of the best-selling book, The Other Path, holds that the problem of underdeveloped countries is not that their poor, which make up most of its population, have no estates. The poor have their little business and living spaces somewhere in our blighted land. Otherwise, they would long ago have all disappeared.
"The poor will always be with us" is more a tribute to their staying power than an assurance of a perennial venue ones donative charity. The real problem, according to De Sotto, is that the poor do not havel legally recognized rights to use what they actually have.
The poors assets, as correctly seen by De Sotto, are not formalized in the way a rich mans claim to his lot on Forbes Park is deeded or his interests in businesses are listed as shares of stock, bonds and other instruments of trade and commerce.
The poors claim to what they have is not embodied in universally obtainable, standardized instruments of exchange that are socially accepted and legally protected. Neither is it connected to the national economy beyond what is called the dynamics of the underground economy.
A formalized asset, like a house and lot in an exclusive subdivision, serves not only to provide shelter but also good collateral for a banking loan that may be plowed into business.
An informal asset, like a push cart used as sleeping quarters, is totally non-bankable. The residential house and lot are described as "live capital". The push cart is "dead capital".
Unlocking for the poor the value of what they actually now possess through a framework of property rights fashioned by the peculiar nature of their tenuous character is the challenge of development of our country.
De Sottos ideas, and the a number of thought-provoking proposals and on-stream programs on development, take center stage this week in a seminar organized by the Luis A. Yulo Foundation For Sustainable Development. It will be held for two days, September 12 and 13, 2001 at the Asian Institute of Management in Makati. Local and foreign speakers on the present designs of cities, their management and assembly into integral systems.
It is the objective of the foundation, named after a worthy son, Luis Yulo, of a worthy father, Chief Justice Jose Yulo, to act as a catalyst in bringing together ideas and experience, visions and projects, funders and doers in the global pursuit for elevating everyones quality of life. We wish the Seminar all the best.