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A Bajillionaire’s Guide to Simple Estate Planning August 7, 2007

Posted by Janjan in All, Idiocy, Legally Opinionated and Jurisprudent.

Dear Magnificent Atty. Perez,

My name is Scrooge McDuck, a bonnie Scot mallard of the clan McDucks from Glasgow, Scotland. It pleases me to note that you are a quite learned and enthusiastic human lawyer for one your age (not to mention the fact that you give FREE legal advice), and though you have taken a penchant for educating the poor and underprivileged of society, may I inquire as to whether you would render your expert legal opinion on one such as myself…. eccentric bajillionaires that are absurdly wealthy beyond all measure. (And dear sir, I ask that you render me the same FREE legal advice as you would the likes of Maritess and Ging-ging.)

Now sir, I have acquired an estate over at Sagay in the Province of Negros Occidental. It is a wonderful hacienda, as you Filipinos would say, one overlooking a vast sugarfield with a thousand and five slaves, errr, I mean laborers, toiling in my sugar fields. The estate includes a horse farm, a banana plantation, a free lot where I shall be growing Jatropha (known in your native parlance as tuba-tuba) for bio-diesel, as well as a 5-hectare beach front that I intend to develop into a beach resort.In the interests of providing my three grand-nephews Huey, Dewey and Louie with employment, I also intend to acquire two franchises: Sunburst Fried Chicken and Jo’s Chicken Inato, two very well-respected establishments in your native Cebu.

Lately, I have considered acquiring a salt-mine in Bukidnon, which will not only provide my grand-nephews with free salt for their restaurant business, but shall likewise provide me with the pleasure of cracking my whip and ordering, “Work my peons!! Work!!! MWAHAHAHAHAHAHAHAHA!!!”

However, I am getting quite advanced in my years. Having first appeared in Disney’s “Christmas in Bear Mountain” on the year 1947, I am now more or less in the respectable age of 60 years old. (Which makes my nephew Donald, who first appeared on June 9, 1934, thirteen years older than I. Absurd, is it not?)

Nevertheless, such being the case, I am asking for your esteemed legal advise on this matter: I plan to bequeath my properties in favor of my nephew Donald, and my grandnephews Huey, Dewey and Louie. I have already made arrangements for all my properties around the world but none for my properties in the Philippines. I may or may not engage your services as my lawyer in the matter, depending on the advise given.

So, my dear Magnificent Atty. Perez, how can you help me with this endeavor?

Ad quack dei memoriam,

Scrooge McDuck

Dear Uncle Scrooge (Please please please… Can I call you Uncle Scrooge????):

I write in reply to your query dated August 8, 2007 on the matter of how to dispose your Philippine assets with the view of the same being transmitted in favor of your nephew Donald Duck and your grandnephews Huey Duck, Dewey Duck and Louie Duck.

But before I do, I just want to say that I AM SUCH A BIG FAN OF YOUR CARTOON SERIES, DUCKTALES!!! I think I may have skipped a few classes just to see your adventures on GMA-7, and my childhood consists of singing our your theme song, “Duck Tales!! Woohoo!!!” I wish YOU were my real uncle.

That being said, let me now go to the matter on hand. What you ask for, dear Uncle Scrooge, is a matter called Estate Planning, which is a legal program of planning the disposition of one’s existing and future assets in a way that minimizes one’s taxes, as well as reduces the headaches of litigation on inheritance matters.

Considering the glut of your assets here in the Philippines, my recommendation is that you form a corporation and transfer all your assets under the name of this corporation. Considering likewise that you will need a corporation to manage and run your businesses in the Philippines, I wholly recommend the formation of one such corporation. We can call the business “McDuck Enterprises, Inc.” We can reserve the name now, if you want. If the name has been taken, may I suggest we call the corporation “Itlog Maalat Corporation” instead? In Filipino, that loosely means, “Good Fortune, Good Venture, Good TASTE!”

Now, there are three ways that we can transfer the assets to your corporation. The first way is through a “sale” of assets by you to your corporation. The advantage of this option is that it is the fastest and easiest method to transfer the assets to your corporation, involving only the execution of a Deed of Absolute Sale and the registration of the same with the Registry of Deeds and voila! Your assets are transferred to your corporation! The drawback? This method also involves the payment of a greater rate of taxes (a Capital Gains Tax of 10% of either the fair market value of the property or its selling price, whichever is higher), hence, not recommended if we are dealing with vast tracks of land and numerous properties. Imagine transferring property worth P800 million… we’re talking about taxes at the rate of P80 million!

The second option is to “donate” the properties to your corporation. This option has the same expediency as the first method, which may or may not have a higher tax rate than the first, depending on the value of the property donated. However, I do not favor this method since in terms of succession planning, this is the least secure method of transfer, in the sense that properties validly donated may still be collated by the other heirs under the estate of the decedent. As you know, families have been destroyed all because of squabbles over inheritance. Thus, if your purpose in transferring the properties is for the sake of buying peace within the family, then I recommend that you don’t resort to a donation.

The third option is to have an equity swap, meaning that you will “invest” these properties under the name of your corporation in exchange for shares of stock of the same. Of all the three methods, this option involves the most bureaucracy and red-tape, but nonetheless, it is also the one that involves the least amount of taxes. Technically, no taxes are involved other than documentary stamp taxes (1% of the book value of the original issuance of shares of stock), but you will be paying for certain fees.

The third option essentially involves the Bureau of Internal Revenue which will issue a tax ruling declaring the transfer in exchange for capital stock as a tax-free transfer. The tax ruling is to be issued by the Commissioner of Internal Revenue, who is based in Manila, hence, you will need to have your lawyer periodically follow up the matter over at BIR head office in Manila.

As to transferring these properties under the name of your nephew and grandnephews, it merely involves the issuance of stock certificates under their name, or the execution of a Deed of Assignment, as the case may be.

There are many more ways I can help you legally minimize taxes and form your corporation in a manner that best serves your needs, but that advice is no longer free, I’m sorry to say. Might I entice you to visit me here in Cebu and employ the services of both my law firm and my bookkeeping corporation? Let’s have lunch, my treat. There’s this delightful Chinese restaurant called Grand Majestic that serves the best Peking Duck in Cebu!

Errrrrrr….. on second thought, how would you like some Sunburst Fried Chicken? 8)

Truly yours,

the Magnificent Atty. Perez


1. tinuod nga botbot - August 7, 2007

Giatay oi.. hapit ko mahayang og kinatawa diri dah..

Grand Uncle Scrooge, how about me? Why didn’t you mention my name? I tell you, you and you’re attorney will be in a big trouble in the midst of transferring your assets to the said itlog maalat boys coz i’m gonna rip your balls…este eggs… hehehehehe

Atty, unaha lang sa og ilis akong apilyedo before nimo asikasohon ning kasoha.. himo-ang Duck akong family name, yawat nalang bisan usa lang ka puno-an sa tubo, og usa ka kantiner nga tuba.. aw tuba-tuba man diay to…… ah basta atty.. ikaw na ang bahala nako….

2. northwolf - August 7, 2007

Idol… uhmm… no problem, I can change your name to Duck… but I have to ask you a question…. do you look like one?

In case you didn’t notice, the Duck family is not fond of wearing pants, shorts or even underwear….

3. bisdakinnaconcretejungle - August 7, 2007

don’t worry atty.. i am who you are.. as i can see, you are on your knees upon begging Grand Uncle Scrooge to be your uncle as well.. so, if the Duck family are not fond of wearing pants or any undies, i believe we’re one of them…

am i right atty? heheheheheheeh

4. northwolf - August 7, 2007

Hahaha… I just want to call him Unca Scrooge, just like Huey, Dewey and Louie. I don’t want to dress up like Winnie the Pooh…

…unless there’s a good reason to. ; )

5. bisdakinnaconcretejungle - August 7, 2007

if you didn’t notice atty, winnie was tagged as the pooh coz he always had his poopooh in his pants.. and it would be inappropriate to call him winnie the shit coz shit is a swear word.. i knew it since my mom kicked the living shit out of me when i used that word…

and there’s always a good reason to dress like winnie the shit este the pooh (sorry for the swear word atty! 😦 ) coz my balls are suffocated and they’re getting darker and darker… hav u checked urs atty?

hahahahahaha….. mabuang ko yadz oi.. shodi abas..

6. northwolf - August 7, 2007

HALAAAAAAA vayot, padung nang mahulog imong log-etch kay nahinog na. : ) Padung na kang ma gurlash bru. Shodi oy…

7. bisdakinnaconcretejungle - August 7, 2007

simbako ka yadz oi.. wala pa gani ni katanom sa iyang similya.. hehehehe

lawgawa aning etryha torney oi.. sige lang jud tawn ko’g ngisi diri.. mura na ko’g tambaloslos..

8. northwolf - August 7, 2007

wahahaha… i’m glad to hear that : ) i aim to please

9. tinuod nga botbot - August 7, 2007

well, you did make me laugh.. hehehehe

10. Singha Beer - August 7, 2007

This sort of writing rarely lands in your X.
It really sounds The Office – like. So coherent; the legalese and the humour.

11. northwolf - August 7, 2007

Thank you, Mr. Singha Beer : ) I like drinking you too!

Seriously, when I wrote this, it was a different kind of vibe from when I was writing Maritess and Ging-ging… none of the crazy manic humor… more restrained and informative. I guess my head was more wrapped up in work.

I just hope the ordinary reader can understand the legalese though.

12. Singha Beer - August 7, 2007

Do not worry, my dear Atty Magnificent. Any ordinary reader with a great need of free legal advise regarding Estate Planning are bound to force themselves to understand the legalese you’ve essayed here. However, I am of the opinion that no ordinary person would have problems on Estate Planning and Management due to the mere fact that they don’t have huge tracts of land to worry with.

13. Gewinne - May 16, 2010

i’m so happy that i saw this website. that posting was so nice. thanks again i saved this blog.
are you going to post similar posts?

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