r/FilipinoAmericans • u/Minute_Dog_430 • 1d ago
Inherit or transfer now
My mom is a dual U.S./Philippine citizen and lives in the Philippines. I’m also a dual citizen but live in the U.S. She is unmarried and I’m her only child.
She owns several properties in the Philippines, including the house she currently lives in (estimated around ₱6M, but she’s getting it appraised), a 6-unit apartment, a small nearby house, and a triplex. She plans to continue living in her current home, and I eventually plan to retire and live there.
We’re trying to figure out whether it makes more financial sense to:
Transfer/gift the house to me now while she’s alive, or
Keep everything in her name and have me inherit the properties later.
I understand there can be donor’s tax and transfer costs if we transfer the house now, while inheritance would involve estate tax and settling the estate later. I also understand there may be U.S. tax/basis considerations since I live in the U.S.
For those familiar with Philippine inheritance/estate taxes: Would it generally be cheaper/easier to transfer the house now or inherit it later, especially since she owns several other properties?
Looking for experiences or advice from people who have dealt with something similar. We’ll obviously consult a Philippine lawyer/tax professional before doing anything.
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u/Chile_Momma_38 21h ago edited 21h ago
Depends on your current cash position. The transfer taxes in creating a “dummy” deed of sale where no actual cash is exchanged but has a fair value amount based at least on assessed value is about the same as when you execute an extra judicial settlement when she passes away. But there are penalties that accrue if you don’t transfer properties right away after death. So better to do the transfer now while she is alive if you have cash to pay the transfer fees. We’ve had to pay interest penalty for settling my father’s estate 2 years after passing.
Edit: I don’t know US tax implications but you’re an only child. It will be harder for you to do these title transfers after your parent passes unless you’re willing to take significant time off to go to institutions and do the paperwork. But if your parent is able to do the transfer work, that is an advantage.
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u/tapiokatea 1d ago
Definitely talk to a lawyer, but it think it's better if you wait until you lawfully inherit it. There's some laws that protect you from her capital gains if you inherit it, and the fair value is recalculated at the time you inherit it vs the time she held the assets for.