"A kiss on the hand may be quite continental, but diamonds are a girl’s best friend," warbled Marilyn Monroe as the gold digger Lorelei Lee in the 1950s movie Gentlemen Prefer Blondes. So iconic has the song become that it enjoyed a resurrection in the film Moulin Rouge, where it was sung by Nicole Kidman as Satine.
Because, beyond the witty lyrics, the sentiment has durability. It resonates, to a greater or lesser degree, in the hearts of a whole lot of women,
Hopefully, though, our young, hip and savvy 21st-century Filipinas realize that, as friends, diamonds have limitations. They don’t offer you a shoulder to cry on and they can’t give you good advice. Although come to think of it, advice from your Best Friend Forever from high school might not be so hot, either, if she doesn’t know what she’s talking about. Like a good investment portfolio, friendships should be diversified.
So, aside from your BFF, who are the people that one should cultivate to get through life’s vicissitudes?
Well, in college you might have scorned them as boring bean-counters, but life has a way of making us take a second look at people. A good accountant is the first must-have in the life of an upwardly mobile—or already arrived—Filipina. The second is a lawyer. The situations in which a woman will need an accountant AND a lawyer can fill a book, but for now, we will cover only a few.
Increasingly, a significant number of women—top management executives, entrepreneurs, physicians and other professionals, entertainers—now earn and spend their own money. These are people who have acquired properties and made investments and may also have taken out loans. Only a very small percentage in this category of achievers, however, are knowledgeable enough to manage their financial affairs without professional assistance and advice.
This is where the accountant comes in. For women not engaged in business, the most common—and usually the only—reason for retaining an accountant is for the preparation of the income tax return or ITR. For affluent individuals, the optional standard deduction for income tax purposes is no option at all; the tax bite would be enormous. On the other hand, non-payment of taxes through accounting legerdemain can land one on the front pages of the newspapers and possibly result in the garnishment of one’s Lamborghini, in addition to having to pay penalties and surcharges. The accountant has to ensure that the client pays, not too much, not too little, but the right amount of taxes.
If you limit an accountant’s role in the preparation of the ITR, however, you will fail to maximize his or her usefulness in the management of your financial affairs. Sitting down with the accountant to assess your current situation and discuss short-term and long-term financial goals will enable him or her to help you attain those goals.
A good accountant will keep a tally of what the client owns and owes to make sure that she has enough property and cash to meet her obligations, sustain herself and her family in the present, and provide for the future, especially medical needs in her old age.
Hopefully, the accountant can prevent the client from making unwise financial decisions: s/he has to ensure that the client does not lose her money either through fraud, natural deterioration of the assets or through government action, i.e. for non-payment of taxes, for example.
After having carefully nurtured and grown their worldly goods, the affluent are not ordinarily inclined to turn a substantial portion of these assets over to the government in terms of estate taxes when the time comes to depart this world. In the Philippines, no woman of means is without family, and that may mean dependents—minor children, elderly parents or siblings who, through disability, are unable to provide for themselves. She will want to pass on her estate to her heirs in as intact a condition as possible. She may even want to make provisions for loyal household staff and favorite charities. At this point, not just an accountant but also a lawyer will be necessary to inventory assets, check tax liabilities, arrange for obligations and taxes to be paid, and ensure that the heirs receive their rightful share both under the law and according to the wishes of the deceased. Incidentally, the will should be updated periodically to take into account important changes in the lives of the client and the beneficiaries.
Monetary transactions are a fact of life; at one point or another, you will have to sign a contract outlining the terms and conditions under which an exchange of goods and services is to take place.
It’s amazing how many women sign contracts lightheartedly, under the impression that it’s just a piece of paper, and then come to grief later.
All contracts should be reviewed carefully; once signed, a contract becomes binding on the signatories and compliance is a must if one is to avoid costly and time-consuming litigation. A notarized contract becomes a public document and affects parties other than the signatories. Take the case of a notarized deed of sale, where the buyer dies and the property is willed to his heir. If there had been some instance of fraud or encumbrance on the property which was unknown to the buyer at the time of the sale, then the heir, having taken the place of the buyer, can sue the seller.
Unclear terms and conditions should be clarified and, if necessary, passed on to a lawyer for review. Better a smaller expense at the outset than a larger expense and aggravation later.
A very common situation is one where two or more friends decide to go into business together without any formal agreement as to who does what or who is entitled to what, because they trust that the glue of friendship will hold the business relationship together. Well, the glue dries up and things fall apart, and so do business-cum-friendship relationships. As the saying goes, good fences make good neighbors, and a legal agreement defining boundaries will do more for mutual understanding than sentiment.
For most women, however, the overarching concerns involve personal relationships—familial and romantic, often intertwined. Single women may find themselves embroiled in inheritance disputes, further complicated by corporate issues in the case of family corporations. Parents may be alarmed that their starry-eyed daughter’s beloved is a bum interested only in marrying her for her money. A wife may want out from an abusive relationship. A woman may enter into a liaison with a married man, and have children.
It is important for a woman to know what her and her children’s rights are under the law.
Unfortunately, except for prenuptial agreements insisted upon by hard-nosed parents, women’s hearts often overrule their heads and they seek a lawyer’s advice only when a relationship has gone sour. Ideally, a woman should seek legal counsel prior to entering into a relationship, but (sigh) this is like asking for the moon.
Nowhere is it mentioned, because it is so taken for granted, but having professionals handle your affairs will spare you some ulcer-inducing moments. If you are the nervous type, your accountant can represent you at the Bureau of Internal Revenue when your ITR comes up for examination. And, unless you are unusually feisty and confrontational, it will be kinder on your nerves if you let your lawyer deal with hostile parties (besides, you might say or do the wrong thing!).
That situation may not necessarily involve formal litigation. A friend of mine who is engaged in real estate rental had to deal with an obnoxious, spoiled brat of a young man who was her
A jewelry-loving woman with some knowledge of accounting might argue, defensively, that diamonds are assets but the money paid to accountants and lawyers is classified as expenses. That is certainly true, and in fact, diamonds have an advantage over cars as assets in that they appreciate in value over time. On the other hand, money spent on accountants and lawyers result in peace of mind, and THAT, too, is definitely an asset worth having.
This story was originally published in the October 2010 issue of Town&Country.