The subject of dying is taboo in Philippine culture. So if you are still alive, you do not discuss about Last Will and Testament to relatives or friends. A classic example is my wife's aunt. She is a widow with no children. While her husband was still living, one of her nephews stayed with them. They sent him to medical school but there was no formal adoption. Just after the death of her husband( about 10 years ago) a niece from her husband side of the family claimed that all the antique furniture in the ancestral home is hers since she is the only niece of her late husband. Macrine's aunt was so mad she threatened to sue her and she stopped claiming. Macrine then advised her aunt with my urging that she should write a will so when she dies there will be peace among all the nephews and nieces. Macrine's aunt has several real estate properties besides the ancestral home and it valuable contents. Macrine's aunt has several coconut plantations, a beach resort, a ranch and several other rental properties. When Macrine mentioned about the will, her aunt gave us a dirty look and change the subject. We have never mentioned the subject of wills to her since then. Macrine's aunt is 87 years old.
Here in US this subject is commonly discussed, just like taxes, or politics. About 7 years ago, Macrine and I consulted a local attorney and set up our Last will and Testament and Trust-called Revocable Living Trust (LWTT). The main purpose is to insure that when we die our heirs know exactly what we want and also for tax purposes. Here are details of Last Will and Testament and Living Trust from the Web. I hope you find it informative.
"A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his/her estate and provides for the transfer of his/her property at death. For the devolution of property not disposed of by will, see inheritance and intestacy.
In the strictest sense, a "will" has historically been limited to real property while "testament" applies only to dispositions of personal property (thus giving rise to the popular title of the document as "Last Will and Testament"), though this distinction is seldom observed today. A will may also create a testamentary trust that is effective only after the death of the testator.
Common purposes for trusts include:
Privacy.
Trusts may be created purely for privacy. The terms of a will are public and the terms of a trust are not. In some families this alone makes use of trusts ideal.
Spendthrift Protection.
Trusts may be used to protect beneficiaries (for example, one's children) against their own inability to handle money. It is not unusual for an individual to create an inter vivos trust with a corporate trustee who may then disburse funds only for causes articulated in the trust document. These are especially attractive for spendthrifts. In many cases a family member or friend has prevailed upon the spendthrift/settlor to enter into such a relationship. However, over time, courts were asked to determine the efficacy of spendthrift clauses as against the trust beneficiaries seeking to engage in such assignments, and the creditors of those beneficiaries seeking to reach trust assets. A case law doctrine developed whereby courts may generally recognize the efficacy of spendthrift clauses as against trust beneficiaries and their creditors, but not against creditors of a settlor.
Wills and Estate Planning.
Trusts frequently appear in wills (indeed, technically, the administration of every deceased estate is a form of trust). A fairly conventional will, even for a comparatively poor person, often leaves assets to the deceased spouse (if any), and then to the children equally. If the children are under 18, or under some other age mentioned in the will (21 and 25 are common), a trust must come into existence until the contingency age is reached. The executor of the will is (usually) the trustee, and the children are the beneficiaries. The trustee will have powers to assist the beneficiaries during their minority.
Pension Plans.
Pension plans are typically set up as a trust, with the employer as settlor, and the employees and their dependents as beneficiaries.
Asset Protection.
The principle of "asset protection" is for a person to divorce himself or herself personally from the assets he or she would otherwise own, with the intention that future creditors will not be able to attack that money, even though they may be able to bankrupt him or her personally. One method of asset protection is the creation of a discretionary trust, of which the settlor may be the protector and a beneficiary, but not the trustee and not the sole beneficiary. In such an arrangement the settlor may be in a position to benefit from the trust assets, without owning them, and therefore without them being available to his creditors. Such a trust will usually preserve anonymity with a completely unconnected name (e.g. "The Teddy Bear Trust"). The above is a considerable simplification of the scope of asset protection. It is a subject which straddles ethical boundaries. Some asset protection is legal and (arguably) moral, while some asset protection is illegal and/or (arguably) immoral.
Tax Planning.
The tax consequences of doing anything using a trust are usually different from the tax consequences of achieving the same effect by another route (if, indeed, it would be possible to do so). In many cases the tax consequences of using the trust are better than the alternative, and trusts are therefore frequently used for legal tax avoidance. For an example see the "nil-band discretionary trust", explained at Inheritance Tax.
Co-ownership.
Ownership of property by more than one person is facilitated by a trust. In particular, ownership of a matrimonial home is commonly effected by a trust with both partners as beneficiaries and one, or both, owning the legal title as trustee".
I suggest that if you are over 40 and owned a home to have a LWTT. You could do it yourself, but if you are not comfortable of the "Do it Yourself LWTT", consult a lawyer/financial adviser for a reasonable fee. Trust is recommended if you have resources/assets exceeding $200,000 or more, I believe. It is never too early to have a LWTT.
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