A will I’ll make, a will tonight

Question: Wow, being on de facto lockdown has left me with a lot of time on my hands. I can hardly go to the bank as many of the branches close to me are shuttered. That has also limited my ability to do online investing. Can you suggest other productive things to do as far as personal finance is concerned? Asked at “Ask a Friend, Ask Efren” FREE service at www.personalfinance.ph, SMS, Viber, LinkedIn, WhatsApp, Instagram and Facebook.

Answer: With things currently at a standstill, it would be a lot easier to write your last will and testament.

A last will and testament allows for the legal and equitable distribution of your estate when you depart for your ultimate destination, so to speak. Such orderly transfer of your estate will minimize potential conflicts among your heirs, help minimize the transfer taxes and even work toward preserving your estate.A few definitions are in order. Firstly, your estate is the entirety of your properties whether real, monetary or intangible wherever they are located. So, even your properties located outside of the Philippines will form part of your estate.There are two types of estate transfers or succession, either via a last will and testament (testate) or by operation of law (intestate) should you depart from this life without a will. When the succession is via a will, you as the testator must be of sound mind.

It is only with a last will and testament that you can exercise your “free will” because sharing formulas automatically provide a free portion that you as the testator can will to be given to anyone who is not legally disqualified from receiving a portion of the estate. It is also through wills that you can disinherit a compulsory heir. But please note that there are very tough requirements for disinheriting compulsory heirs.

With intestate succession, all of your estate is distributed according to legally set out sharing formulas.

Under a last will and testament, that portion of your estate that is reserved for your compulsory heirs is called legitime. Your legitimate children (including legally adopted children) and descendants are your primary compulsory heirs. Your surviving spouse and recognized illegitimate children are your concurrent compulsory heirs. Your surviving parents and ascendants are your secondary compulsory heirs and will receive their share, as if they were primary compulsory heirs, but only if there are no primary compulsory heirs.

There are two types of wills. A holographic will is one where you as the testator prepare a signed, fully handwritten will. A notarial will is more strict in that it needs to follow a certain format, must be signed by witnesses and, you guessed it, must be notarized.

A natural prerequisite to writing a last will and testament is that your papers must be in order. You will need to know the location of the transfer certificates of titles for your real property, life insurance policies, preneed policies (e.g. funeral service and burial/cremation plans), investment contracts or statements of accounts, trust agreements and many more.

Wills will need to be updated as frequent as once a year to take into account additions or reductions in the number of heirs, additions or deletions to your list of properties, and changes in asset market values, among others.There is more to writing wills than what has been discussed. In fact, there are other estate planning devices out there aside from wills. To be sure you cover all ground, talk to an estate planning lawyer or experienced financial planner.

Still, a will is one of the most effective tools in estate planning. So, why not write one today. Make your enhanced community quarantine a more productive one. INQ

Efren Ll. Cruz is a registered financial planner of RFP Philippines, seasoned investment adviser, bestselling author of personal finance books in the Philippines. Be a tools-based YAMAN coach. Details at www.personalfinance.ph/coach.html. To learn more about personal financial planning, attend the 82nd RFP program this May 2020. To inquire, email [email protected] or text at 0917-9689774.)