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Life Philippines

When That Time Comes

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No death is without its share of drama and when that time comes for you and I, we have a moral responsibility to ensure that those we leave behind do not have their grief overlaid by the fear and anxiety that comes with having no means or no known means of paying for funeral and burial expenses.

I have highlighted two scenarios in the previous paragraph, and we will look at them in detail and look for ways we can make the financial aspect as painless as possible.

However there is a situation that is occurring with increasing frequency, and can take place whatever the financial position of the deceased and which we will discuss first.

Who Assists The Bereaved

Often the bereaved is young, financially naive, and with family who are not in a position to offer wise financial guidance, in steps a helpful foreigner, someone known to the bereaved and the deceased, who offers to assist.
Isn’t that a frequent scenario with many expat deaths, and it’s great that old friends are willing to help in such a time of need. However a word to the wise, these situations can quickly deteriorate into a financial hemorrhage to the bereaved, if you don’t put some plans into place while you are able.

Its a great idea to have some support planned for your loved one apart from the love and nurture they will get from family and friends, and if among your friends there are two or three people who could be that wise counsel financially, maybe you could consider asking them if they would fill that role.

Give your request the respect it deserves and don’t ask when you have had a few beers, or other alcohol, or if that’s the only time you have the courage to talk openly, follow up on their response at a time when you can both nail down what your request means and exactly the part you see them playing. You also need to tell them you have asked two other people and who they are, and why you chose this many.

I have suggested three friends for the following reasons:

    On any given day it is sometimes difficult to get people together, people can be out of the country, traveling, sick themselves, or any other number of reasons. So you have more chance of getting two out of three than two out of two
    My observation is that when things go wrong usually the advisor is acting on their own, with little or no constraints. Usually with no ill intent they succumb to the pressures of getting the best for their friend and doing the best they can for those left behind, and they start to take over. Sadly it is also in this area that “low lifes”, opportunists and crooks also take advantage of the situation. On one occasion a “crooked” so called “friend” encouraging the purchase of costly caskets and burial plots by the bereaved was caught because a Filipino friend overheard the negotiations for commission, and asked the bereaved if she was aware of this. On another the “friend” has refused to be accountable for money entrusted to his care, as far as has been able to be calculated, there is a shortfall of several thousand AU dollars.
    Sometimes the bereaved is left out of the loop entirely and although a sad time; the funeral and burial arrangements are things they should be encouraged to be actively involved in and with as they feel able. Given that the stages of grief are not linear, commitments made yesterday may be forgotten or not a priority today and vice versa. Monitoring this to ensure optimum involvement of the bereaved and their family is important, so that when the bereaved looks back, they feel they were part of those proceedings.
    So having two or three trusted friends involved can help to make sure that no one gets overwhelmed, that a balance between the need to “get it done” and the need of the bereaved to be as involved as possible is maintained.
    It adds a level of financial security to the situation by passing financial arrangements through more sets of eyes.

I am not for one minute suggesting that this is a regular occurrence, just pointing out that it happens and prevention is the best cure.

Now onto those two things that I mentioned earlier and that appear to be happening with increasing frequency.

The Bereaved Has No Means To Pay The Funeral and or Burial Expenses

Nearly 50 years of knowing people who have settled in this country, has given me the understanding that many expats live from pension check to pension check, especially as they reside here longer. So it is important that when you decide to live in the Philippines that you make provision for paying for your funeral.
The infographic below gives the December 2013 costs of a funeral for a Filipino in the Philippines. As you can see these costs can range from 40.000php ($1,000USD approx) to 1.5 million php (35,000 USD approx) depending on your requirements.
Click on the image to enlarge, you should be able to enlarge two times.

Cost-of-dying-infographics

You can do this in a number of ways. This is not really a discussion of the best, because I am sure people have got all kinds of schemes to pay those expenses, whilst making money etc, it is more one of the simplest that will get the job done. If you have another simple way, comment on the post and I will add it to the article with an acknowledgement.

Life Insurance

For those of us young enough to get cover or those who are already covered, this offers the best alternative as payout comes in cash and providing you have an adequate level of cover it can be used to pay for all expenses, from the wake, to the embalming, the casket, the cremation, the burial or memorial plot, the remembrance (40 days) or supplement shortfalls in any other plans you may have. The table below lists the top 29 life insurance companies operating in the Philippines licensed for 2013/14 by the Insurance Commission of the Philippines.
Check out each company to see if they will provide you with cover given your particular circumstances. If you are over 40 and you get cover expect your premiums to be higher than if you were twenty.
Make sure that the payout is made in such a way that the bereaved will be able to access it quickly, you can instruct some insurance companies to authorise payments to undertakers, memorial parks stonemasons etc.
One tip worth considering is paying the period for which cover is not provided, sometimes the first two or three years, in advance, so that is anything happens during that period you are still entitled to a payout.

Pre-Pay

You can pay for your funeral costs and the cost of your burial plot, either in a combined plan from one of a growing number of memorial parks or by buying prepaid plans for Funeral Services and Burial plots separately.
One important factor to consider is making sure that the company you choose to buy your plan from is approved by The Insurance Commission which is the official regulator of all pre-need companies in the Philippines. Memorial plans, also called life plans, are one type of plan sold by pre-need companies. The other types are education and pension plans.

There were 20 companies licensed to sell pre-need plans in 2012, and only 10 of these 20 were licensed to sell life or memorial plans. Check out the list of companies approved here

To get an idea of the range of packages Google “Memorial Plans in Philippines” about 2 million hits.
The beauty of these plans is that they can be paid monthly over 12 months or five years. Also the price is locked and cannot be increased for the package you have purchased, even if your demise is in twenty years, when prices in general would have risen considerably.
Always read the terms and conditions associated with the plans you are interested in. As you would with any major decision try to ensure that both you and those who will be administering the plan are fully aware of all benefits and limitations.

Summary

    The purpose is to have the means to allow your loved ones to grieve your passing with dignity. It is not about having the biggest and best funeral.
    It is wisdom not the macabre that makes implementing this a priority, once your normal travel insurance expires.
    Two major ways of acquiring cover are through life insurance and memorial or life plans.
    Your insurer should be a licensed by the Insurance Commission of the Philippines.
    Your memorial or life plan seller should be approved by the Insurance Commission of the Philippines.
    Check the terms and conditions of any plan you enter into.
    Very adequate cover for funeral and burial expenses is available for around 1000php per month.
    My plan is to invite those I respect and love to join me for nine days of one more for the road before they take me on my last drive so I will need to have put aside maybe 10,000php for food and drink.
    We also belong to a co-op that will provide some basics such as rice, tinned food and wood to help out. Such an organisation may exist where you live, if so check the benefits and the contributions you are required to make, either when there is a death or monthly, or sometimes both. They are great places to be involved in your community without lots of expense.

The Bereaved Has No Known Means Of Paying For Funeral And Burial Expenses

This scenario occurs with even more frequency than having no means at all.
There are a number of situations where this happens:

There Is No Legal Or Recognised Common Law Relationship

These circumstances are frequently the cause of the inability to release funds. A girl friend has no standing in Philippine law, so it is necessary to make contingencies to cover expenses surrounding your death. One way is to have an account for example “John Doe OR Jane Gazelle”. You could ask an attorney or a friend to hold the card or passbook (the attorney will charge a fee, pay it in advance) Talk with you partner and the person holding the account, together about how they access the money an your demise.

Ignorance

Most Filipino’s have never been in a situation where a death will have huge financial impact possibly both positive and negative on their lives.
In addition their avoidance mechanisms are in full flight when it comes to the reality of our mortality.
Unlike the west it would be the exception rather than the rule that a Filipino spouse would be insisting on the knowledge and tools to access funds in the event of the expats demise.
Therefore it is even more important that the expat educates and facilitates the Filipinos access to that knowledge and those tools.
Involve your spouse in all aspects of your finances, let her know where money she can access is (maybe a separate account in her name). Tell her who you have asked to assist her when you die, talk about it but more importantly write it down for when she will need it.

Complicated Financial Issues

These can range from inheritance issues with children from previous marriages, to distrust of the current spouse or her financial aptitude.
Whatever issues bring you to the place where you choose not to involve your spouse in your financial affairs, you need to ensure that there is a mechanism in place for the timely payment of funeral and burial expenses. Once again you should write down how you have made that provision and leave it with someone you trust or with your personal papers so it is easy to find.

Other Considerations

Pre-Nuptual Agreements don’t count once you have passed, given pre-nuptuals are about protecting the assets you brought to the marriage in the event of it breaking down, then that time didn’t happen. If you lasted that long no matter what your agreement says it won’t be honored in the Philippines.
Following your death, unless you have no assets at all the assets will be subject to probate, this is a period when the court works out how your assets will be distributed. Jointly owned property will be probated on the portion you own.
If you have a will this process is simplified and the time probate takes can be reduced to six months, but if you die intestate, that is with no will; there are assets in other countries; or there are challenges to your will, then the process could take years.
So believing your spouse can survive by selling assets may be a major misconception. What can destroy a comfortable estate, is when illegal loans are arranged to pay for funeral, burial and ongoing expenses using assets as collateral. With interest rates as high as 40% on such loans, interest can eat up the estate very quickly.
Avoid this by developing an ongoing relationship with with a Filipino family attorney, where trust can be built up over a number of years. This puts the attorney in the best position to provide a plan that will meet your needs and comply with Philippines law.
There are services that provide free legal advice in the Philippines. I did a Google search on “where to get free legal advice in the Philippines” and got 16,700,000 results.
Also most foreign nationals can access a list of Filipino attorneys from their embassy.
U.S. Citizens. You can download the list of those who have indicated their availability to American Clients here
Australians can get information on legal advice from the Australian Embassy
Canadians can seek help here
The New Zealand Embassy does not have a publicly available list but these contact details will get you the help you require.
UK Citizens can access a list of English Speaking Filipino Lawyers
South Africans can get a list of lawyers willing to work with South African citizens here
As there are nationals from over 100 countries living in the Philippines it is impossible to list all of the embassies for lists of lawyers, but if you have verifiable contact details, let me know and I will add to this post.
The value of this service has depreciated over the years as the embassies add a list of disclaimers to each of their lists, reducing them to names not recommendations.

I hope this article resonates with you and you will start promoting it among your expat friends and acquaintances even if you have it covered yourself. Then we can all celebrate the memory of those who leave us, without the shadow of financial mismanagement coloring those memories.

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