12 Nov 2018, 14:42 — 5 min read
After years of working hard, investing in businesses, and accumulating wealth to secure your family’s future, you surely do not want that family to collapse and tear itself to pieces because you failed to plan your legacy and the inheritance you’ll leave behind.
Inheritance is undeniably an important legal subject, but it is rarely a center of discussion. While it is a topic Filipinos generally avoid because of how controversial it seems, discussing inheritance is crucial for the family’s future, particularly in preparation for any eventuality. Discussion about inheritance especially becomes more vital when it involves handing down the family business.
Here are some tips that will help you and your family plan for business succession and ensure that the future stays bright for them:
1. What’s there to give?
You cannot give what you don’t have. Thus, the first step in any inheritance-related matter is determining one’s estate. An estate is basically everything you own and owe as seen from the eyes of the law—this includes your own business and/or stakes in other enterprises.
While you don’t have much to worry about family business succession if you’re its sole owner, there’s a difference when you only own part of a business as a partner or shareholder.
In these cases, it is best to determine the exact amount of your stake sans other obligations. This will enable you to ascertain how much of that stake could be included in your distributable estate. Getting an accountant to sort all these will help greatly.
2. Make a will
A lot of Filipino families encounter teleserye like scenarios when dealing with inheritance. These involve scenes where relatives fight over their inheritance depicted in the Filipino film Tanging Yaman. Most of the time, the problem is that there is simply no will to clear the clout for everyone.
Wills outline how a decedent wants his estate to be distributed among his or her heirs. It shows details of the estate and all its contents, including the kind of benefit the family and its individual members are set to receive as inheritance.
Writing a will to your heirs detailing what they will inherit will help keep harmony and peace in the family and avoid any misunderstanding among kin. Writing a will that involves passing down ownership of your businesses and ventures is also vital, both for your family and the businesses’ future.
3. Consider estate taxes
Estate taxes are taxes paid by heirs of a decedent to receive any assets set as inheritance. These taxes are inevitable in matters involving inheritance. This includes handing down your business to the family.
Properties and business stakes set to be handed down as inheritance will have corresponding estate taxes before any heir is able to claim them. The taxes will highly depend on the worth of the asset.
Most heirs are surprised at the taxes they need to pay after receiving their inheritance and some even view it as a burden. Managing the expectations of your heirs beforehand will help you ensure that what you’ve worked hard for in the past decades will not go to waste.
4. Talk to your family about inheritance
Prevention is better than cure. Speaking with your family about your plans will help you identify issues they’re worried about. Having inheritance issues known beforehand will help you resolve them quicker, ease transition, and stop any brewing before it blows out of proportion.
If your family members are living away from home or are abroad, the best way to connect and keep in touch with them is technology. With the internet and communication apps currently in full blow, everyone you love is now only a click away.
Getting a strong Internet connection, be it through Globe myBusiness ThePLAN postpaid to Globe myBusiness Fiber, is a sure-fire way to bridge the distance and improve your relationship with your family from afar.
Truth be told, there are families that are forcibly torn apart by the constant bickering on what they will get from estates. Families of business owners of SMEs and conglomerates alike are faced with the same fears that internal family issues will spur from misunderstandings on inheritance.
Luckily, there are simple ways to avoid conflict. Careful planning and an optimistic vision for the family are necessary to dodge possible conflict from inheritance disputes.
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