As I travel around the world, I research each country’s business and estate planning laws. An increasing number of people have assets, businesses and families outside the US. They need to understand foreign law in order to avoid confusion and undesirable outcomes, like losing property, or going through multiple probates.
Estate Planning in Thailand
I have lived in Thailand for the past few months. The country has a lot to offer expatriates, with its rich culture, beautiful natural environment, and flavorful cuisine. Thailand is a popular destination for retirees and digital nomads, given that it is easy to enjoy a comfortable standard of living with a small budget.
A lot of different people build a new life here. Thailand has an interesting mix of influences from other cultures. Thai laws are also unique. They have both civil law and common law characteristics, historically influenced by countries such as France, Germany, Switzerland, England, Japan and India.
The following are common questions regarding estate planning in Thailand for US citizens. I was assisted in my research for these topics by local professionals. Keep in mind that US properties owned by expatriates still have to go through a probate in the state where the property resides, unless its legal value is below a given amount, which varies in different states.
- Is a US will legally binding in Thailand?
- What makes a will valid in Thailand?
- How is Thai probate administered?
- Is there a way to avoid a probate?
- Is estate or transfer tax levied on properties before distributions?
- What happens to a child if something happens to parents?
- Is it legal to create a Power of Attorney to name an agent to administer matters in the event of incapacity?
- Are Living Wills or Advanced Healthcare Directives utilized in Thailand?
Is a US will legally binding in Thailand?
Thailand has a civil law system different from the common law system in the US. In many civil law countries, freedom of disposition of properties by will is an exception from the rule. In civil law countries, they often put restrictions on how to dispose of assets after death. France, Spain, Singapore, and Japan are examples of countries which require an estate to be distributed in certain ways. However, Thailand has a feature of common law allowing the disposition by will, and even disinheritance, if clarified in said will.
A foreign will drafted according to the law of the previous country or according to the Thai law will be acceptable in Thai courts. However, the document must be translated into Thai and authorized by the Ministry of Foreign Affairs of Thailand, and the procedure can take a long time. So, it is advisable to have a Thai will in order to dispose properties in Thailand.
A situs will or supplemental will in Thailand, which only applies to properties in Thailand, should be carefully drafted so that a US will is not inadvertently revoked, and so that jurisdiction for all properties is not given to an unintended country. The best way to draft multiple wills in different countries is to develop all of them simultaneously, so that one will doesn’t supersede another. Also, both the US will and situs will can reference each other in order to avoid confusion.
What makes a will valid in Thailand?
Any person 15 years or older is permitted to draft a valid will in Thailand, which uses several types of wills.
- Holograph wills are valid if hand-written (not typed or printed out), dated and signed. Witnesses are not required.
- A will made in the presence of witnesses must be signed by the testator and two witnesses. The writer of the will (whether the testator or someone else) must be also specified under Thai law.
- A will drafted at a local Amphur office with a public officer is considered authentic, and is the most difficult will to contest.
Interestingly, Thai law allows a will to be made as a secret document with certain requirements, and an oral will is also valid for a month, if made under exceptional circumstances, such as imminent death.
How is Thai probate administered?
A probate process usually takes 3-4 months in Thailand (much shorter than in the US). Upon death of a US citizen, the Consulate will reach out to all relatives of the deceased, both in Thailand and abroad. There is a very short statute of limitations to file an objection to an existing estate case, therefore it is important that all parties are notified in a timely manner.
If a US citizen in Thailand dies without a will, the probate court will transfer Thai properties through the list of statutory heirs in intestacy laws. The heirs have the burden of proof in the Thai probate court to show that they are next of kin, and they might have to travel to Thailand to present their arguments.
There are six classes of heirs in order of priority: descendants, parents, brothers and sisters of full blood, brothers and sisters of half-blood, grandparents, then uncles and aunts. So long as there is an heir surviving in one of the classes, the heir of the lower of those classes is not entitled to any share of assets. The surviving spouse is an heir subject to the special rules, and inherits half of the estate, known as Sin Somros, before any distribution of the estate to relatives.
Is there a way to avoid a probate?
Properties do not have to be transferred through a probate if they are held in joint ownership. Those properties automatically pass to the surviving joint owner(s) at the death of one of the owners.
Another popular way to own real estate in Thailand for a foreigner is usufruct. Similar to the concept of a life estate, it is a temporary ownership right for use and enjoyment of the property during a given life period. Upon the death of the usufructuary (the person possessing the usufruct interest), the usufruct interest expires, and the original property owner will regain all the rights of ownership.
Payable at Death or Transfer at Death designations, which can transfer properties outside of probate, are not available in Thailand. Thailand’s civil law does not recognize ownership by a trustee, which is an element of a common law system.
Is estate or transfer tax levied on properties before distributions?
Currently, there is no inheritance tax in Thailand. However, the Thai government has been considering inheritance tax for some time, and recently passed a law requiring inheritors of assets valued at more than 100 million bahts (US $3 million) to pay tax above that amount.
What happens to a child if something happens to parents?
If US citizen parents with minor children pass away in Thailand, the Consulate will try to locate next-of-kin in the absence of any guardianship nomination document.
While it is a good idea for expat parents to have a local temporary guardian who can take care of the children until a permanent guardian is located, be aware that Thai law does not allow written a guardianship arrangement. A guardian should be appointed through a court process, which takes the best interest of children into consideration.
For children who are US citizens, not dual citizens of US and Thailand, written guardianship nomination will most likely be honored according to US laws. As a precaution, it is a good idea to have a temporary guardianship nomination both in Thai and English, with notaries.
Is it legal to create a Power of Attorney to name an agent to administer matters in the event of incapacity?
The US consulate provides the power of attorney. However, there is no general power of attorney in Thailand like in the US, where the power of attorney (POA) gives several powers to an agent. There are different forms of limited power of attorneys for various receiving parties in Thailand. For example, each government agency requires its power of attorney. Therefore, a US citizen should prepare a power of attorney appropriate for each property in Thailand.
Are Living Wills or Advanced Healthcare Directives utilized in Thailand?
Thailand recognized the use of a Living Will in Section 12 of the National Health Act, adopted in 2007. A Living Will is a document that provides guidelines for when to stop life-prolonging procedures, and authorizes a representative to make a healthcare decision when one is incapacitated.
In Thailand, it is important to consider a Living Will because of a tendency to continue treatment until the patient dies, and it might include extreme lifesaving measures. A Living Will can be incorporated in the Last Will and Testament, then submitted to healthcare facilities, to be on record in case of tragic circumstance.
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This blog post is written for educational and general information purposes only and does not constitute specific legal advice. You understand that there is no attorney-client relationship between you and the blog publisher. This blog should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.