A foreigner’s brief guide to will and succession planning in Thailand

Home » A foreigner’s brief guide to will and succession planning in Thailand

Thailand’s aging population presents a significant demographic shift with profound implications for various industries. As the number of elderly individuals continues to rise, there is a growing demand for specialized services in health and wellness, long-term care, wills and succession planning, and financial services tailored to senior citizens’ needs.

Against this backdrop, estate and succession planning takes on heightened significance, serving as crucial tools for ensuring the orderly transfer of assets and the preservation of wealth for future generations. As Thailand’s demographic landscape evolves, proactive engagement with estate planning becomes very important, emphasizing the importance of informed decision-making and legal preparedness in safeguarding one’s legacy.

Estate planning is a critical aspect of financial management often overlooked until it’s too late. The absence of a well-drafted will can lead to significant legal challenges and disputes, particularly in jurisdictions like Thailand where intestacy laws govern asset distribution in the absence of a testamentary directive. Join us on May 8, 2024, at TICC Connect, as we delve into the intricacies of will and succession planning, exploring the importance of proactive estate management and the legal frameworks that underpin it.

Understanding Thai Inheritance Laws

Having a will or testament is not just a matter of personal preference; it’s a legal imperative that ensures your assets are distributed according to your wishes. Without a will, the distribution of assets falls under the jurisdiction of intestacy laws, which may not align with your intentions or the needs of your beneficiaries. Regularly updating your will is crucial to accommodate changes in family dynamics and asset accumulation over time.

In Thailand, the definition of statutory heirs outlined in Section 1629 of the Civil and Commercial Code serves as the foundation for inheritance distribution. This legal framework prioritizes immediate family members and relatives in a hierarchical order, where children and spouses hold primary entitlements to the deceased’s estate, followed by parents, siblings, and more distant relatives such as grandparents, uncles, and aunts. Section 1629 also specifies that half of the deceased’s estate shall first be given to the surviving spouse and then proportionately among the remaining heirs. The rest of the estate is divided among the heirs in succession. If a higher-priority heir is still alive, the next level of heirs is not entitled to inherit, except for children and parents, whose right to inherit is protected by law without disqualification.

However, the entitlements of surviving spouses can vary significantly depending on the presence of other relatives and specific circumstances. For instance, if the deceased has children from a previous marriage or other legal dependents, the share allocated to the surviving spouse may be adjusted accordingly, potentially diminishing their entitlement.

For foreigners in Thailand, it is important to consider Sections 39 and 40 of the Conflict of Laws Act. These sections stipulate that a foreigner’s will is subject to the laws of their home country at the time it is written. Additionally, the will must be composed per the legal requirements of both Thailand and the foreigner’s home country.

Making a Will in Thailand

Making a will in Thailand can be a relatively straightforward process, though enlisting legal counsel is highly recommended to ensure all requirements are met. In Thailand, any individual over fifteen years old or a legal professional can draft a will. However, adherence to specific legal requirements is essential for validity; the will can be written in either Thai or a foreign language, but it must be signed by the testator in the presence of two qualified witnesses, each at least 20 years old, mentally competent, and not under undue influence. The content of the will should also include key provisions such as the identification of the testator, appointment of an executor, asset distribution instructions, guardianship for minors, funeral arrangements, and delineation of the executor’s powers.

On the other hand, the legal process for foreign wills in Thailand is more complex and must abide by specific requirements. While foreign wills are recognized in Thailand as long as they comply with the laws of the country where they were made and do not contradict Thai legal principles, they must undergo translation and authentication to ensure clarity and validity within the Thai judicial system.

The process of having foreign wills recognized may involve multiple court visits over a lengthy period, which is highly daunting for grieving families. To avoid wasting time and money going through this difficult process, many foreign residents opt to draft a separate Thai will for their assets in Thailand and another for assets in other countries. This way, individuals and their beneficiaries would not have to endure difficulties navigating cross-border probate regulations when the time comes.

Succession for Foreign Property Owners

Foreigners inheriting land in Thailand face strict legal conditions detailed in Section 93 of the Land Code Act. According to this legislation, foreigners can only inherit land with special ministerial permission if they are recognized as lawful heirs. Additionally, the Land Code imposes restrictions on the amount of land foreigners can own based on its designated use. For instance, residential and commercial land is limited to one rai, while industrial land is capped at 10 rais. Section 94 adds that all land unlawfully acquired by a foreigner will be disposed of within a time specified by regulators, typically a year.

The inheritance of condominiums, on the other hand, follows the Condominium Act. As with land inheritance, foreigners are allowed to inherit condominiums if they are considered statutory heirs or named in a will. According to Section 19/7, the heir must notify the Competent Official in writing within sixty days from the date of acquiring ownership of the apartment. However, foreigners may collectively hold ownership in the units not exceeding forty-nine percent of the total space of all units in such a condominium, as stated in Section 19/2. Foreigners who fail to meet these requirements must dispose of the unit within a year.

What if you’re no longer capable of handling your affairs?

Those who find themselves unable to handle their affairs due to medical emergencies or other debilitating issues may opt to use a Power of Attorney (POA), which allows the principal to appoint an agent to manage affairs on their behalf. The scope of authority granted to the agent can vary, ranging from broad powers to specific tasks, depending on the type of POA.

There are two main types of POA: non-durable and durable. A non-durable POA is typically used for specific transactions and expires if you become incapacitated. In contrast, a durable POA remains effective even if you lose the ability to make decisions, providing continuity of management, especially during unforeseen health crises or incapacity.

Thai Powers of Attorney are subject to specific regulations and practices unique to the country’s legal system. Firstly, it’s important to note that government agencies in Thailand commonly demand the use of standard Thai script POA forms, such as the widely recognized “Tor Dor 21” document, particularly for transactions involving the sale or registration of property. These standardized forms ensure conformity with local legal standards and facilitate administrative processes.

However, there are limitations on the acceptance of custom POAs prepared by lawyers, despite being properly witnessed. While these custom POAs may be legally valid, certain government transactions may not recognize them, compelling individuals to utilize the specified standard forms mandated by authorities.

Moreover, it’s crucial to understand that POAs in Thailand are typically granted for specific transactions or properties and do not extend beyond those predefined actions. Therefore, individuals engaging in significant transactions, especially property sales, should prioritize adherence to local requirements by employing the prescribed POA forms to mitigate any potential legal complications that may arise.

Conclusion on will and succession planning

A comprehensive estate plan encompasses not only the drafting of wills and succession planning but also the inclusion of powers of attorney and advanced directives. These components play pivotal roles in managing personal, financial, and medical affairs, ensuring that one’s wishes are honored even in unforeseen circumstances or incapacitation.

With considerable experience navigating Thai laws, we are well-equipped to provide tailored advice for families on various matters, including real estatemarriage, wills and probate, and corporate issues. Reach out to us at [email protected] to schedule a consultation.

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