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What if I died tomorrow?

Discussion in 'Off-Topic Forum' started by john boy, Jul 12, 2022.

  1. PatO

    PatO DI Forum Luminary Highly Rated Poster Showcase Reviewer Veteran Marines

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    Here, my BDO bank manager suggested I have notarized last will and testament so my wife can have access to our bank accounts so the country doesn't freeze our accounts while they do their procedure.
     
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  2. Dutchie

    Dutchie DI Senior Member Showcase Reviewer Veteran Army

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    No, Dutch bank accounts don't have a "payable on death benificiary" option. Besides, I doubt that this process is as straightforward as you describe, because that would make it very easy to put borrowed money in such a bank account with a payable on death benificiary, thus cheating the creditors of the estate.
     
  3. Dutchie

    Dutchie DI Senior Member Showcase Reviewer Veteran Army

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    I think that depends on the law in the country (countries) involved. In my brother's case I doubt it would have made any difference. If there would have been a last will made in the Netherlands that would have been easy to trace (because there's a central depository for testaments in the Netherlands), but Madagaskar (where he lived and died) would probably still insist on verifying that there wasn't a later one made there. Moreover in both countries the law doesn't allow to completely disinherit certain heirs (children in particular), hence the investigation into a theoretical child in the country of residence.
    Again, in the Netherlands it is easy to verify whether a person has any children, because there's a centralized registration of every live birth and death in the country.
    However, in Madagaskar it's not that easy. As an aside, that entire investigation was pointless from the start, since my brother moved to the country a mere 6 months before he died.
     
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  4. SkipJack

    SkipJack DI Senior Member

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    I don't know.
    I have been through this with my parents and yes it is as straightforward as I described.

    You make a very good point about the borrowed money. Not sure how this would be resolved. Most loans in the US are against collateral like a house or automobile. In most states within the US, the lender is limited to repossessing the house or automobile only. I am not sure how a personal loan or credit card debt would work out.
     
  5. Notmyrealname

    Notmyrealname DI Forum Luminary Highly Rated Poster Showcase Reviewer

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    I am not fully aware of the systems here, but they are 100% certain to be over-complicated and SLOW. I assume they have some form of Probate and, if so, that can lock a Will until Probate is obtained. Would separate bank accounts for both spouses (as well as retaining any joint accounts) be an answer - only for small amounts of cash to tie one over until Probate is granted. I have a joint UK bank account with my wife and this has 'rights of survivorship' (different banks, different countries will use different terminology) which means that when one account holder dies the other account holder will have full access to all the cash as a sole account holder (it may require presentation of a death certificate only). But small funds in separate accounts would be a short-term solution.

    The point about Wills for expats (this is mostly from memory and is mostly based on UK tax laws) is that usually expats require one for their home country (UK or not) if they have assets there and another one for the country where they are resident if they also hold assets there. There are other forms of International Wills but sound advice would be required to further explore that (I would go for separate Wills if necessary). There are so many issues involved (in the UK, 'domicile' is a major factor (for both spouses, as IHT applies only to UK-held assets if the deceased is non-domiciled and the threshold for taxation is different if the surviving spouse is non-domiciled), as is double taxation treaties (the UK has one with the Philippines)) and those concerned really do need to check the situation in both countries.

    The issue of domicile can be very complex (as there are different definitions in different circumstances) but, to give an example, a surviving foreign spouse can elect to become domiciled in the UK after the partner's death and so inherit all the Estate (people have done this and saved millions in IHT). I am not aware if the surviving foreign spouse needed to have any other connection to the UK, such as joint houses, bank accounts or what is the effect of dual citizenship. So many complexities that tax law runs into thousands of volumes.

    I suppose if all assets are held by the wife in this country - based on the expected situation of the older husband pre-deceasing her - then access to those assets and IHT are not issues. However, governments are ruthless over taxes (someone has to pay for their subsidised bars) and might track assets from the home country to the new one and assess them as gifts. Two separate countries are more than happy to 'conspire' (perhaps not a fair word to use!) to squeeze death taxes from an individual who has links to both and may have moved assets between them.

    In short (!), the situation at the time depends on many factors and advice from the home country and this country would need to be sought. For me, I just look to see if I can find ways around it all. As it happens, I have no bank accounts here, no properties ... zero! I have some clothes and the UK can have them in lieu of taxes (in the same way that the wealthy give Rembrandts) - I hope they enjoy them. All the money I once remitted here I spend on essential family living costs and then on myself (so they are not what I would term 'gifts'). I don't remit anything now.
     
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  6. PatO

    PatO DI Forum Luminary Highly Rated Poster Showcase Reviewer Veteran Marines

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    BDO manager told me a will here will prevent a probate or whatever. A forum member's wife (10 yrs ago) could not access their joint bank account for about a year when he passed (they were building a small resort at that time) which is why he suggested I get a LWAT and to give him a copy. I had the Dumaguete legal office create the will and notarize it.
     
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  7. SkipJack

    SkipJack DI Senior Member

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    I don't know.
    I believe the issue is that the government was using the banks to enforce inheritance tax payments.
    My understanding is that the accounts will be frozen until taxes are paid but there is a new law that may change this.

    A joint account will be frozen until taxes are paid on the half. (Assuming there are only two account owners.)

    The will may help her getting access to your accounts that she is not signatory to after a probate process.

    The heirs, thus, had to seek assistance from the Bangko Sentral ng Pilipinas (BSP), pointing out that under the Tax Reform for Acceleration and Inclusion Law, the estate tax return is no longer a prerequisite to withdraw funds from the bank account of the deceased.

    “Thus, clearly if the account is in the name of two or more depositors, the six percent withholding tax shall only be imposed on the share of the deceased in the joint bank account, should the heirs decide to withdraw it,” the complaint said. As such, the heirs added that the other half, or 50 percent of the “or” account, was supposed to be clean and there is no compelling and valid reason for the bank to disallow the withdrawal by the codepositor.

    It is true that in a joint deposit account, it is presumed that the joint depositors equally own the deposit account absent any contrary agreement. Nonetheless, the bank cannot simply allow any withdrawal from an account maintained with a codepositor who died already without clearly determining the proper share or claim of the estate of the deceased depositor in the account, and the best evidence for this is the extrajudicial settlement of the decedent’s estate specifically stating the share of the deceased depositor in the subject bank accounts,” the bank said.

    Wow how complex. My experience in the US, an "or" account is the property of the other account holders when one passes away and the banks do not enforce tax payments..

    https://business.inquirer.net/324101/joint-deposit-woes

    https://www.pwc.com/ph/en/as-easy-as-abc/column/bank-account-of-the-living-dead.html
     
    Last edited: Jul 19, 2022
  8. PatO

    PatO DI Forum Luminary Highly Rated Poster Showcase Reviewer Veteran Marines

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    In our case, the houses, vehicles, etc are all in her name; hence; perhaps not a tax issue.
     
  9. Dutchie

    Dutchie DI Senior Member Showcase Reviewer Veteran Army

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    Perhaps Pat, and if there's no heirs outside the Philippines then there shouldn't be much of a problem with the estate if you would be the first to go. However, if there are heirs outside your direct family here, then the "in her name" thingy might not mean "outside the estate" per se.
    It might be different here, but normally marital assets consist of everything not covered by a prenuptial agreement if any. Which is to say that an asset "in the name of one partner" doesn't mean that it isn't half owned by each partner.
     
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