20/08/2026
A decision made to simplify the future may unintentionally create a situation the family never expected.
Dear Friends,
One of the most common estate planning instincts is this: "Why not transfer the property to the children now to save on estate taxes later?"
It sounds practical. But like many decisions involving family wealth, the answer is not always as simple as it appears.
Under the TRAIN Law, both donor's tax and estate tax are imposed at 6%. But estate tax comes with important deductions, including the ₱5 million standard deduction and the deduction available for the family home. Donor's tax does not provide the same benefits.
So the expected tax savings from donating property during one's lifetime may not always be there.
But the bigger concern is not only the tax.
Imagine parents transfer their home to their only child who is already married. Years later, the child passes away before the parents.
That property is no longer the parents' property. It becomes part of the child's estate and may pass to the child's compulsory heirs — the spouse and children, if any — not back to the parents who originally built and owned it.
A decision made to simplify the future may unintentionally create a situation the family never expected.
Instead of transferring the property prematurely, families may consider using life insurance as a source of liquidity to help settle estate taxes when they become due. The property can remain with the family, the available deductions can still apply, and the parents retain control of what they worked hard to build during their lifetime.
Keep these in mind when making decisions about family wealth transfer.
Rolly Robles
Chair, Wealth Management Center
