“Estate planning is usually not difficult it's often just common sense.”
Estate planning is the process of anticipating and arranging for the disposal of your estate on death.
Estate planning typically attempts to eliminate uncertainties in the administration of your estate and maximise the value of the estate by reducing the impact of taxes and other imposts.
Estate planning involve review of your Will, establishment or amendment of trusts (including testamentary or revocable rusts and the review of beneficiary designations and powers of appointment), reviewing property ownership (including the consideration of the effect of joint tenancies with right of survivorship or tenancies in common), gifts and the effect of them, and powers of attorney, specifically the enduring financial powers of attorney and the enduring medical powers of attorney or guardianship appointments.
You should be aware that the establishment of trusts either during one’s lifetime or by Will is not permitted under Thai law.
Top 10 Estate Planning Tips for Expats Living in Thailand
1. Review your existing estate planning strategies in light of advice from qualified lawyers and accountants in your home country before acquiring assets or entering into a relationship or marriage in Thailand.
2. Seek professional legal advice as to the possibility of entering into a binding prenuptial agreement or other binding financial agreement prior to entering into a marriage or relationship in Thailand. The protection available under prenuptial agreements in Thailand is limited but can be useful. Also it may be more appropriate to enter into an agreement under the law in your home company and excluding jurisdiction of the courts in Thailand. Each case is different and specialist advice is crucial.
3. Review your Will in your home country upon the moving to Thailand and prior to entering into any relationship or marriage in Thailand. Your Will should also be reviewed regularly on any significant change in your circumstances. Ensure that any new will made in your home country does not revoke your Thai will and vice versa.
4. If you acquire assets in Thailand, even bank accounts or personal property, make a Will in Thailand dealing with your Thai assets only and which accurately reflects your testamentary wishes in respect of those assets. You should ensure that your Thai Will does not revoke any will made in your home country and you should review your Thai Will on any significant change in your circumstances in Thailand.
5. Put in place a Power of Attorney so as to allow both your Thai assets and your foreign assets to be dealt with on your behalf in the event of illness, incapacity or unavailability. Usually this would involve separate Powers of Attorney in each country. Where possible the Powers of Attorney should be enduring Powers of Attorney so as to permit your assets to be dealt with in the event of your incapacity and, if possible, deal with the power to make decisions concerning medical treatment decisions. Under the laws of some countries an enduring Guardianship Appointment or in Thailand a Living Will may be more appropriate.
6. If you propose to acquire assets, typically real estate, in the name of your Thai wife or partner take steps to ensure that you were are adequately protected by use of a Thai limited company, usufruct interest, registered mortgage, registered lease or other appropriate asset protection strategy. Seek professional legal advice as to an appropriate strategy.
7. If assets in Thailand, typically real estate, are to be held in the name of your Thai wife or partner you should ensure that she has in place a valid Will which protects your position. In any event make sure that you are fully aware of your entitlement, if any, under the laws of inheritance in Thailand.
8. Obtain professional advice in respect of any relevant Family Provision legislation which is applicable in your home country and take any appropriate steps to protect your estate against a claim which is not in accordance with your testamentary wishes.
9. Ensure that your relatives in Thailand are aware of your wishes as to burial, cremation and funeral arrangements and ensure that adequate funds are available to meet expenses.
10. Make sure that copies of all relevant financial documents including your Will are in the possession or control of those who should have access to them in the event of your death.
Intestacy in Thailand
What happens if the deceased has no Will?
Under Section 1629 of the Thai Civil and Commercial Code there is said to be only six classes of statutory heirs (in fact there are 7) and subject to the provisions of Section 1630(2) each class is entitled to inherit in the following order:
1) Descendants;
2) Parents;
3) Brothers and sisters of full blood;
4) Brothers and sisters of half-blood;
5) Grandparents;
6) Uncles and aunts.
A surviving spouse is also a statutory heir, subject to the special provisions of Section 1635.
Where a person dies intestate Thailand, that is without having made a Will, then those entitled to the estate are as follows:
1. The surviving spouse inherits the whole estate in the absence of any other statutory heir (Section 1635(4) Section Thai Civil and Commercial Code “TCCC”)
2. If the deceased is survived by a spouse, the spouse is entitled to 50% of the common or marital property of the deceased and the remaining estate passes as set out below (Sections 1625, 1629 and 1635 TCCC)
3. If the deceased is survived by a spouse and children, the surviving spouse and children are entitled for the remaining estate which shall be equally distributed amongst them. (Sections 1629 and 1635(1) TCCC)
4. If the deceased is survived by a spouse and a parent or parents but no children, the surviving spouse is entitled to 50% of the estate and the spouse and deceased’s parent or parents to the other 50% of the estate; (Sections 1629 and 1635(2) TCCC)
5. If the deceased is survived by a spouse and brothers and sisters of full blood, but with no surviving children or parents, then the surviving spouse is entitled to 50% of the estate and the spouse and the deceased’s siblings of the full blood are entitled to the other remaining 50% (Sections 1629 and 1635(2) TCCC);
6. If the deceased is survived by a spouse and otherwise only by heirs in classes 4, 5, 6 specified in the TCCC brothers and sisters of half-blood, grandparents, uncles and aunts, then the spouse will inherit two thirds of the g estate and the heirs the highest class will be entitled to the other 1/3 of the estate which will be divided in equal shares amongst them (Sections 1629 and 1635(3) TCCC);
7. The surviving spouse inherits the whole estate in the absence of any other statutory heir (Section 1635(4) TCCC)
8. If the deceased has no surviving spouse, then the statutory heirs in the highest class are entitled to the whole of the estate and if more than one in equal shares (Section 1620 and 1620 TCCC).
9. Under the Thai law where a deceased dies intestate leaving no statutory heirs, including a spouse, as specified above, the estate of the passes to the State, subject to the rights of the deceased’s creditors. Entitlement on intestacy is a complex area of the law in Thailand. There are exceptions where some legatees or statutory heirs may be excluded from entitlement. The above is a good guide but is in no way a substitution for expert professional legal advice.
IF you have not made a Will think about it now!!!
Making a Will in Thailand
“Where there’s a Will there’s a way”
The law concerning making of wills in Thailand is contained in the Thai Civil and Commercial Code in sections 1646 through to 1672.
If you have assets in Thailand, even bank accounts or personal property, it is important that you make a Will setting out who is to receive your assets in the event of your death. In the case of foreigners is usually desirable to have a separate Will dealing with assets in the kingdom of Thailand only and another Will dealing with assets in the Willmaker's home country. Care should be taken to ensure that neither Will revokes the other. If in doubt seek legal advice.
The failure to have a valid Will or Wills in place is likely to result in your estate being distributed in accordance with the laws of intestacy in either or both Thailand and your home country. Under Thai law the relevant provisions as to statutory heirs are somewhat arbitrary and, in most cases, in the absence of a will, your lawful wife is unlikely to receive all of your estate. In the absence of a will your de facto wife will receive none of your estate. For details as to the identity of statutory heirs refer to our article Intestacy in Thailand
Caution: if you have property, typically real estate, in the name of your Thai wife or partner and there is no adequate asset protection strategy in place that you may not be entitled to that asset in the event of her or his death. You should ensure that she/he makes a will reflecting any agreement between you and her as to what is to happen in the event of her death or have an appropriate asset protection strategy in place or, preferably, both.
Validity of Wills in Thailand
Generally speaking, three types of Wills are permitted in Thailand. These are:
1. A holograph Will (see section 1657 of the Thai Civil and Commercial Code)
2. A Will made in the presence of witnesses (see section 1656)
3. A Will made before a public official (see section 1658)
Two additional types of Wills are permitted but are rarely used. These are the “secret Will” section 1660 and the “oral Will” section 1663.
A Holograph Will is one made by a holograph document, that is to say, the Willmaker writes it with his/her own hand the whole text of the document, the date and signature. No erasure, addition or other alteration in such a Will is valid unless made in the Willmaker’s own hand and signed by him.
A Will in the presence of witnesses may be made in writing, dated at the time of making of will and signed by the Willmaker before at least two witnesses present at the same time who then sign their names as witnesses of the signature of the Willmaker. No erasure, addition or other alternation to such will is valid unless made in the same form as prescribed by this section 1656.
A Will made before a public official, must comply with the following:
(1) The Willmaker must declare to the Kromakarn Amphur (According to Section 40 of the Act on the Administrative Organization of the State, B.E. 2495, all powers and duties relating to the official service are determined by law to belong to Kromakarn Amphur are vested in Nai Amphur) before at least two other persons as witness present at the same time what dispositions he wishes to be included in this will;
(2) The Kromakarn Amphur must note down such declaration of the Willmaker and read it to the latter and to the witnesses;
(3) The Willmaker and the witnesses must sign their names after having ascertained that the statement noted down by the Kromakarn Amphur corresponds with the declaration made by the Willmaker;
(4) The statement noted down by the Kromakarn Amphur shall be dated and signed by such official who shall certify under his hand and seal that the will has been made in compliance with the foregoing Sub- Sections 1 to 3.
No erasure, addition or other alternation in such will is valid unless signed by the Willmaker, the witness and the Kromakarn Amphur.
In order to make a will in Thailand the Willmaker must be over the age of 15 years (see section 1703).
Other Requirements
There are a number of other important provisions contained in the Thai Civil and Commercial Code relating to Wills which should be borne in mind.
Section 1667 provides that “In the event of a Thai subject making his will in a foreign territory, such Will may be made either according to the form prescribed by the law of the country where it is made or according to the form prescribed by Thai law.
When the will is made according to the form prescribed by Thai law, the powers and duties of the Kromakarn Amphur under Section 1658, Section 1660, Section 1661, Section 1662 and Section 1663 shall be exercised by:
(1) The Thai Diplomatic or Consular Officer acting within the scope of his authority, or
(2) Any authority competent under foreign law for making authentic record of a statement.
Section 1668 provides that “Unless otherwise provided by law, the Willmaker need not disclose to the witness the contents of his will.”
Section 1653 provides that “the writer of the will or a witness thereof cannot be a legatee under such will. The forgoing paragraph shall also apply to the spouse of such writer of witness. The competent official recording the statement made by witnesses under Section 1663 is deemed to be a writer within the meaning of this Section.”
Section 1671 provides that “Where a person other than the Willmaker is the writer of a will, such persons must sign his name thereon and add the statement that he is the writer. If such person is also a witness, a statement that he is a witness must be written down after his signature in the same manner as is done by any other witness.”
Whilst trusts are not permitted under Thai law whether created by Will or otherwise the Thai Civil and Commercial Code permits the appointment of a “controller of property” who is permitted to hold property on behalf of a minor until the minor reaches majority at the age of 20 years (see sections 1686 and following).
Generally speaking a Will made in Thailand should be made in the Thai language. There is no formal requirement that the Will be made in the Thai language however the administrator may experience some problems if it is made in English only. Most professional law firms are able to prepare bilingual Wills in both the Thai and English languages generally they contain a provision that if there is any conflict between the two the English version shall prevail. Translation expenses usually amount to about 500 baht per page but may be more expensive where other languages are involved. Generally speaking, foreigners are not permitted to own land in Thailand. An exception to this is contained in sections 93 to 96 of the Land Code pursuant to which foreigners are permitted to inherit land provided that the land is transferred to a Thai national within one year.
By Joe Lynch