For many people, estate planning and the preparation of a Last Will and Testament (LW&T) is a dreaded thought and something that is avoided if at all possible. However, it is certainly advisable to make such provisions sooner rather than later and this holds true, in particular, if you have property in Thailand.
If you do not prepare a LW&T, the law decides how the estate is distributed. Succession in Thailand is governed by Sections 1599 & 1600 of the Thai Civil and Commercial Code (CCC). Rules related to international issues are governed by Sections 37 of the Thai Act on Conflict of Laws.
There are six classes of statutory heir and each class is entitled to inherit in the following order (Section 1629 CCC):
1) Descendants
2) Parents
3) Brothers and sisters of full blood
4) Brothers and sisters of half blood
5) Grandfathers and grandmothers
6) Uncles and aunts
Note that so long as there is any heir surviving or represented in a class as specified above as the case may be, the heir of the lower class has no right at all to the estate of the deceased (Section 1630 CCC).
The surviving spouse is also a statutory heir. His/her share of the inheritance depends on how many and which type of statutory heirs there are altogether as specified in section 1635 CCC.
Thai inheritance law does not recognise the idea of a statutory share. Any heir can be fully disinherited.
If there are no living relatives and no will, the estate devolves to the state.
Why a Will is recommended
It is highly recommended to have a Last Will and Testament naming all your assets, such as property, bank accounts, vehicle, and personal items as well as naming your heirs.
If there is no LW&T, the statutory heirs have the burden of proof that they are next of kin. With Thai courts this can take many months or even years. This means that your loved ones will not be able to access what you have left them.
They will, in practice, have to hire a Thai lawyer to represent them during the court probate proceedings in Thailand. They may even have to travel to Thailand. This is avoidable by preparing a LW&T.
In a Will, an administrator of the estate or executor may also be appointed, such as a lawyer in Thailand.
Thailand now has enacted laws that govern issues related to the so-called “living will”, which means your instructions as to what to do if you are seriously injured and left in a vegetative state, at least, taken into account.
Such instructions may be included in your Last Will and Testament.
Also, funeral arrangements may be set forth in your Will.
If the deceased had a Thai spouse or partner who owns common assets in his/her own name, in particular if they have been paid for by the deceased, the spouse or partner also should have a Will.
Formalities of a Thai will
In Thailand, the most common type of LW&T is required to be in writing, dated at the time of making the will, and signed by the testator before at least two witnesses of the testator’s signature (Sections 1656 CCC). It does not have to be drafted in Thai language but it is advisable to do so as it will cost to translate it when it is presented in court and this could be expensive – dependent on the lawyer who has been hired.
The text of the LW&T may be printed or handwritten. In addition to this common type of will, there are certain other kinds with different formalities, such as a public will, which are less relevant in practice.
We strongly recommend preparing a separate Thai will for assets in Thailand in addition to the Will in your home country.
This is necessary because different jurisdictions usually require different formalities for Wills.
Furthermore, having a Will drafted in the home country to cover assets in Thailand may be problematic and burdensome to the family as documentation may need to be translated, notarised and approved by a government body.
Conflict of law
If assets include a house and/or a leasehold right in Thailand, Thai courts will be competent for the probate and Thai law will always govern the succession.
If assets include movable property in Thailand, including shares in a Thai company, Thai courts will be competent as well. However, according to Thai conflict law, the law of the domicile of the deceased at the time of his death will be applied.
A Thai LW&T should be prepared and signed on Thai territory, as in this case it is ensured that the aforementioned Thai rules regarding the form of the will apply.
Probate in Thailand
In order to obtain a probate in Thailand, probate proceedings at the Thai courts will need to be initiated by the heirs. A probate will, in most cases, be required to execute the estate orderly, even if the deceased has provided for a LW&T because we have to appoint the executor for distributing the assets.
If the deceased has named an executor in his/her will, the probate court will appoint this person. Most importantly, the court will not require a signed letter of consent from all the potential heirs to appoint an executor. This is vital if all of them do not live in the country as it will save time, money and further anguish.
One of the heirs, but also a third party, such as a lawyer, may act as executor. Otherwise the court will seek to appoint one of the heirs as administrator of the estate.
The executor will be appointed by the court if none of the heirs object.
The executor is obligated to appear personally at the court hearing in Thailand.
If heirs consent to the appointment of the executor in writing, they will usually not be required to appear during the hearing of the probate court in Thailand.
This means that in a normal probate procedure without complications, the heirs can avoid travelling to Thailand by using a Will and a professional administrator such as a lawyer.
Inheritance of Thai property
Please note that a leasehold right regarding property in principle ends upon the demise of the lessee.
However, standard land lease agreements usually state that the leasehold right should be passed on to the heirs by way of inheritance.
This issue needs to be dealt with at the time of preparing and entering into the land lease agreement, and it is advisable to have your legal adviser check any such agreements again as part of the inheritance arrangements.
A building owned by a foreigner may be passed on to the heirs according to general rules.
If shares in a Thai company are passed on by way of inheritance, e.g. in the case of shareholding in a Thai company that holds land, it should be noted that rather complicated legal issues with regards to corporate law may arise.
A Will provides for clarity here and avoids legal disputes between heirs and/or shareholders.
Inheritance Tax
It might be interesting to note that Inheritance Tax (IHT) is not levied in Thailand. However, please remember for certain people, e.g. British, IHT is levied on all worldwide assets.
| The above data and research was compiled from sources believed to be reliable. However, neither MBMG International Ltd nor its officers can accept any liability for any errors or omissions in the above article nor bear any responsibility for any losses achieved as a result of any actions taken or not taken as a consequence of reading the above article. For more information please contact Graham Macdonald on [email protected] |
