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In my over 30 years in the financial services industry, I’ve encountered so many happy and sad stories on estate distribution and quite a number of these can be traced to wrong advice of simply “copying” what other family members or friends did with their properties or failing to make a wealth distribution plan.
Our values and goals as well as aspirations differ from others and as our circumstances change, some of these change too. Thus, it is important that we review our estate plan if we have started with it already or prioritise drafting it if we haven’t started yet. I am sure that the reason why we invest and accumulate assets is to live a quality life and ensure that our children as well as our children’s children live comfortably as well.
Many think that Estate Planning is only for the rich. No it is not! It’s for middle-class families like most of us who have started buying assets and the best time to think about what to do with these assets is while everything is going well with us. That way, a more thought-of and well-processed distribution may be carried out.
The following is a guide to start the process (credits to Martin Ledesma, a fellow veteran in the financial services sector who I consider an expert in this area having guided family corporations actually implement arrangements related to Estate Planning and Distribution):
Make an inventory of your Assets (indicate the estimate value of each)
Know which ones you own and which ones you co-own (by virtue of the property regime in place at the time of the celebration of your marriage which dictates the ownership of these assets).
Decide which ones you keep and which ones you will transfer now (depending on the purpose of the assets: is it to be used as your passive income when you retire or is it something you can transfer now to your child/children as something you want them to have or is it both of these?)
Devise a plan on what to do with the ones you keep (considering their function to you and your loved ones) and provide for payment of estate taxes (a life insurance policy enough to pay the estate taxes due is your best option; make sure you provide enough life insurance for the needs of your family too especially if your kids are still young).
Estate Planning is not only about reducing taxes but more importantly, it’s about keeping the family ties intact for what good are our riches if your family ends up not talking to each other anymore?
Prepare your estate while you’re around to give your family the wisdom that only comes from you and the life you lived.
For a more comprehensive reference on Estate Planning in the Philippine context, I highly endorse the book “Thy Will Be Done” by Atty. Angelo Cabrera, whose field of practice is Estate and Business Succession Planning. His book is written in a very interesting manner complete with real-life stories. (It is available at Amazon).
We oftentimes say, life begins at 40 and for some, it means it’s time to get serious with life but do we really start when we are already halfway though life?
“The day you plant the seed, is not the day you eat the fruit.”
Dr. Sanjay Tolani
With life expectancy of 80 years, 40 means we only have 20 more years or 7,300 days to make a difference in either being financially independent in our old age or being a burden to our children, who, by then, would have their own responsibilities to a carry.
Life begins at 40 should mean, we have done a pretty good job at preparing for the best phase in our lives by the time we are halfway through life. Then and only then, can we say, that indeed, life begins at 40.
Look back…have you done what you should have done? Your answer must give you the urgency to either do more or continue what you have started. As Tennessee Williams said, You can be young without money, but you can’t be old without it.
For more appreciation of this concept, watch Dr. Sanjay Tolani’s you tube video on 28,000. It will make you do a reality check just as it did to me. https://youtu.be/hV_rDPEpLEc
“Nanay” is the Filipino word for mother. Although, many use “Mommy”, “Mama”or “Mamang, there’s still a lot who call their moms “Nanay.”This article is part of a published book entitled Nanay Knows Best which is a compilation of 35 beautiful stories curated by Ms. Janice Senorin-Dela Cruz which I am privileged to be part of.
“Motherhood is a wonderful blessing. Imagine being able to impact the next generations by doing our role in the best way we can.”
When I got married at 35, I prayed to God to bless me with even just one child. He answered my prayer and gave me just one (we actually we wanted two; that’s why you have to be careful what you ask for!). I gave birth to my daughter, Venezia Ysabelle or Venice after 30 hours of labor! Yes, 30 hours! But the pain I felt during those long hours of labor was erased instantly when I heard her first cry and saw her in my husband’s arms, who was in the delivery room to witness this amazing sight!
It’s been said that children arrive without a manual or guide on what to do. So, with a firstborn child, it can be daunting. I asked myself, how can I make sure that my child turns out to be a good person? I bought a good number of books and read up on how to raise a child, but it was never enough. Then, I remembered what I learned from my parents: “Train a child in the way he should go; even when he is old, he will not depart from it.” (Proverbs 22:6) This was my parents’ way of bringing us up and I thought, I should do the same! Bringing her to Sunday School was such a big help in inculcating good values. Values Formation was one of our primary considerations in the choice of school for her early education.
I also remembered my pediatrician’s advice to observe my child closely to know what her interests are and then support these interests. With that in mind, I enrolled her in voice lessons, ballet classes and baking classes. I also supported her in her sports activities – never forcing her to do what she doesn’t want. Now, she is the Team Captain of her school’s Girl’s Basketball Varsity; she sings and dances very well and is a young entrepreneur baking cookies and earning quite well from it that she now has her own investment account.
I really believe that if we expose our kids to opportunities where they can develop their talents, we give them more choices in life. Venice also excels in academics as an honor student and I think, has a well-rounded personality. Looking at how she has turned out at 17 now, I feel blessed and grateful.
With my Psychology background, I know that modelling plays a key role in child development. As Venice was growing up, being a model to her was challenging but I did my best. I wanted her to learn proper time management as I believe that quality family time includes quantity as well. As a working mom, with a very hectic schedule and numerous targets to deliver, I needed to balance my day to ensure I get to spend quality time with my family. My work also required me to travel and be away a lot during the weekdays. I made a commitment that I will be at home during weekends and be present at her school activities. I will never compromise our family time.
“Me time” is also something I value, which I would like my child to learn. We also need to give time and attention to ourselves. We should know what recharges our energy. For me, reading a book at my favourite nook in the house, going to the salon on Sundays, and having a good massage are ways I recharge myself for another gruelling work week ahead. Taking care of ourselves lifts our spirits and when we feel good, it shows in how we relate with our family and other people.
I am a staunch advocate of healthy lifestyle that includes eating well and having regular exercise. I want to enjoy a quality retirement and I know that I cannot possibly have that if I do not keep myself healthy. I do yoga at home and I run long distances. I have also influenced my family to run so we would participate in runs both here and abroad like Singapore, Cambodia and Vietnam, which are good bonding times for us.
I find it amazing to have something that we enjoy doing together. When we travel every year, we explore the new place by running early in the morning when the neighbourhood is still quiet.
I was training to participate in the Boston Marathon this year, and though it got cancelled due to the pandemic, I am still looking forward to participating next year. I think what I find truly wonderful about running is the fact that it allows me to engage in social advocacies as well. For my participation in the Boston Marathon, for example, I was able to raise close to P800,000 Philippine Pesos (more than $17,000) for the construction of 15 houses for a homeless Muslim community in my hometown in Midsayap, Cotabato. (As of this writing, the village still needs 14 more houses and it is my prayer that these families in-waiting will have their homes soon.) https://m.facebook.com/glad1project/
My fundraising campaign for my supposed to-be participation in the Boston Marathon 2020 made possible the construction of 15 houses in Glad 1 Village located in Midsayap, North Cotabato.
As a parent, I fervently pray for Venice to learn the value of generosity. I always tell her that not everyone is given the comforts of life that we are enjoying. We should be a channel of blessings to others. When you are given the ability and opportunity to be generous, make sure you make the most out of it as not everyone has the chance to share their time and resources.
Financial Planning is also important to achieve a quality lifestyle. One of the best decisions we made as parents was to set-up a college education fund for Venice when she turned one year old . After 15 years, our policies have matured and provided available funds for her college education . It also gave us the ability to save and invest more for our retirement. I have been in the financial services sector for more than 30 years and I am a firm believer that financial literacy begins at home.
As a Filipino parent, I really hope that I am able to contribute to the plight of the Filipinos by helping improve the financial literacy of the next generations. I believe if we, as parents, teach money management at home, we will have future generations of families who are better prepared, more secure and can enjoy financial freedom.
Here are 5 tips that I would like to share to improve the money behaviour of our children:
1. Start them early – discuss investment or savings principles in simple terms; open a bank account with cash gifts they get during birthdays, etc.
2. Make them understand the difference between saving and investing.
3. Make them understand the difference between wants versus needs.
4. Make financial principles relevant – for example, take them to get groceries with you and make them compare prices to learn value of money; and
5. Lead by example – live the principles; discuss your plans and aspirations for the future and show them how you are saving up or investing to achieve them.
Motherhood is a wonderful blessing. Imagine being able to impact the next generations by doing our role in the best way we can. If we show and demonstrate to our children how much they are loved and how much they feel secure in our love, then they’ll grow up to be confident individuals ready to love and care for others.
“Let us remember always that the mother is a child’s first teacher and a mother’s heart is the child’s first classroom.”