What is Estate Tax and How it can hurt you even After Death? Part 1 of Estate Planning 101

What-is-Estate-Tax---myfinancemd-WordPressRemember, Paul Walker? Who starred in “The Fast and the Furious” and died last 2013 due to a car accident? He died with total net assets of $25M (or PHP 1.1 B). His total estate tax that is needed to be settled by his only daughter who is only a 16-year-old minor is 35% of that, which is $8M (or PHP 360M).


So, if you ask me? What the hell if Estate Tax?

Isn’t the same with Income tax? Is monthly, quarterly and yearly filing of ITR not enough?


Here is the answer:

During one’s lifetime, we work to provide for our family’s needs and we work even harder to provide the things we are proud to say we can pass on to our children. From there, we have accumulated houses, cars, business properties, stocks, back accounts, jewelry etc. All are called assets when we are alive. But when suddenly, something happens to us, all that assets we have accumulated will now be called, ESTATE.

That is where “Estate Tax” will come into the picture.

So, What is an Estate Tax?

Estate tax – A tax on the transfer of the net estate of the decedent. (Tax Reform Act of 1997, Sec. 84)

Meaning, you will be taxed from the meer transfer of your wealth and properties from you to your family.

In simple illustration:


Picture from: itfp.com

In the above illustration, it clearly indicates what will happen to your assets in case of death. Everything you own, will be added together, minus some tax exemptions, equals total assets to be taxed.

If you wonder how much is taxed? Look at the estate table below: this is taken from www.bir.gov.ph


If you have a Net Estate of, for example, PHP 20,000,000. How much is the estate tax?
First 10M = 1,215,000
Excess of 10M = 10M (20%) = Php 2,000,000
Total Estate Tax = 1,215,000 + 2,000,000 = PHP 3,215,000

Wow, that is a big amount of money by just the transferring of your wealth to your beneficiaries.

The trouble is, what if, that 20M pesos is not in the form of Cash? But in a form of properties, like, your house, cars, stocks and your business? What will your heirs do? Sell the properties you carefully put up just to pay for the transfer of your estates to their names?

Take note, equally burdensome are these facts:

1. Estate tax is payable only in Cash.
2. The estate tax should be filed within six (6) months from decedent’s death or else a 25% charge will be imposed.
3. Estate tax not filed and settled within the prescribed period will be charged 20% yearly until it is settled.
4. Willful neglect and fraud in filing the estate tax will give surcharge of 50%.
5. Your money in banks cannot be used in paying your estate tax dues because of this tax law:


This only means, even if you have enough money in the bank to pay for the estate tax dues, it cannot be used in paying for your estate tax dues because all your bank accounts or even your money in all your investments (mutual funds, stock market, time deposit) will all be frozen in the time of death.
What will unfreeze it?

The Answer is still: Your payment of your estate tax dues.

More estate tax tragic incidents are as follows:

Illustration from: walterreyna.com

If you could take a look, John D. Rockefeller Jr, has the most estate, but paid the least estate tax? How is that possible?

Proper Estate planning is essential knowledge while building your wealth. It is making sure the wealth you are building will go to your family and not to the estate tax.

Once you have accumulated your wealth, it’s time to protect it and make sure it stays with you and your family.


Part 2 of this post will be about the different ways on how to properly plan your Estate and making sure will not make you wake from your grave.

“Steps in Making Sure, your Wealth stays with your Family, even after you are gone.”


Seeking some help in Estate Planning?  Ask me.  Click here.


Gentle reminder from your Estate Planner,

Dr. Pinky Intal





More good reads:



If you have any questions: take your time to email me of your queries, here.






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Pinky De Leon-Intal, MD, RFC
Doc Pinky is a licensed Medical Physician, Internationally Registered Financial Consultant, Certified Investment Solicitor and Associate Wealth Planner and Estate Planner of the Philippines. She loves to educate and spread financial literacy. She is a Lactation Consultant. She loves to travel. She is a devoted wife and mother.
Pinky De Leon-Intal, MD, RFC

Latest posts by Pinky De Leon-Intal, MD, RFC (see all)

19 thoughts on “What is Estate Tax and How it can hurt you even After Death? Part 1 of Estate Planning 101

  1. Roberto dela Cruz

    Thank you doctor Intal.
    Well said, very informative.
    God bless

    • Thanks for reading too. Kindly share to help me educate more people. 🙂

    • joy alonzo

      Hi Dra..
      I’m so glad I accidentally found your wonderful site, I love to read all about financial blogs and your’s a perfect one with all the information that I’m looking for in a website..very informative and in detailed…I am an employee an ofw, an investor and hoping to be an entrepreneur in the future and soon to retire too…

      more power …we need you to be more wise, to plan and be successful,
      god bless, your fan,


  2. Wow! What an informative thing in here about estate tax. my hairs raised while reading this. this is really a good information. thank you very much doctor Pinky. Keep this up.

  3. Ivan Biolango

    This is really great for me to be able to know the importance of Estate Tax. I am so much thankful for having this great idea you have shared. Contains a lot of lessons and knowledge to learn.

  4. amy jean

    Thanks for the info…

  5. Ebony Bonifacio

    This article is a very good read. I can’t wait for part 2 to be released! Thank you for sharing this kind of information.

  6. Rona Quillo

    This is a very informative and helpful article Doc Pinky. I have shared this on my timeline. Thank you.

  7. Albert Valdez

    You help me a lot!

  8. Mark

    If we follow the chart, there is no way, John Jr. will just be paying $25M.

    He has 160M, 20% of 150M of that is already 30M…
    He should be paying 31,334,716.8

  9. Mary Ann

    Thank you Dr.Pinky. Very informative. I shared your article. I have experienced this myself…….parent’s worked hard & accumulate wealth for their family esp their children. Lack of financial literacy leaves consequences for those who are left behind. It’s a lesson I learned. Now, my husband & I are well prepared for our own family.

  10. M

    Thanks for the info… it’s just sad that after all our hardwork to make our kids life better they are still not able enjoy all our hardwork because our government is their to take every oppurtunity they can to take a piece if not the whole of it.

  11. Chit San Juan

    This is very informative Dra. Pinky, this is what I’m experiencing right now. I inherited a small piece of lot from my auntie & until now we have not transfered the titie to our names. I wonder how much will it cost since it’s been 32 years since she passed away.

    • wow, that’s 32 years, I hope the fines will not be too much. Depends on how much the land is too. Things to consider is the location.

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