Estate Planning and Succession in Thailand

I have property in Thailand. Under what circumstances do I need a will drafted in accordance with Thai law?

Our general recommendation to our clients who own property in Thailand is to draft and execute a will that accords with Thai law specifically in relation to that property. Any property held abroad can be excluded from the Thai will and dealt with in a separate will that accords with the law of the jurisdiction in which the foreign property is located. This ensures simplicity and compliance when dealing with the Thai court (a necessary step when distributing an estate) and obviates any conflict of laws issues. If a will does not conform to the requirements of Thai law and is held invalid, the estate is likely to be distributed in accordance with the rules of intestacy to the statutory heirs, an outcome which may well be contrary to the wishes of the testator.

Does Thai law allow for property to be held in trust?

There are no provisions in Thai law that support or regulate trusts and this is a common issue when attempting to enforce the provisions of wills drafted in accordance with the laws of a foreign jurisdiction.

Does my will need to be in the Thai language?

A valid will may be written in either Thai or English, but, if written in English only, will need to be translated to Thai before presentation to any relevant authority. When we draft wills for our clients, they are drafted and executed simultaneously in both languages with this requirement in mind.

Do I need to nominate an executor in my Thai will?

An executor is a critical figure in the distribution of an estate in Thailand. They should ideally reside in Thailand since they will be required to attend the Thai court. Their identity and role should be made fully explicit in the will and it is best to ensure they understand and are willing and able to meet their obligations in advance. The naming of a substitute executor in the will is also a prudent measure.

I am the executor/beneficiary of a Thai will. How long does it usually take for an executor to be appointed?

The appointment of an executor can only be made by an order of the Thai court. Following an initial application to the court, there will usually be a hearing approximately 60 - 120 days later to appoint the executor. It should be noted that the executor needs to be physically present at this hearing to provide evidence to the court. Usually within 30 – 60 days of this hearing, and on the basis there has been no appeals by any other interested party, the court will grant a final order.

I have a relative who died intestate (without a will) in Thailand and I believe I am a beneficiary of the estate. I am outside Thailand. Can you help with this?

Yes, we deal with matters like this on a regular basis. It is likely the intestate rules will be invoked and you will need to prove that either you are the sole statutory heir or among a class of statutory heirs and that the rest of the heirs consent to your appointment as executor. Please note that you will need to physically attend the Thai court.

Is there any inheritance tax in Thailand?

Following the introduction of the Inheritance Tax Act in 2016, inheritance tax is now applied to inherited assets which exceed 100 million THB in value at a rate of 5% of the tax base for ascendants or descendants and 10% of the tax base for non ascendants or descendants. The tax is calculated with respect to the amount which exceeds 100 million THB.

The tax is levied on both Thai individuals and corporate entities and foreign individuals and corporate entities resident in Thailand and applies to inherited property located in Thailand and located outside the country. Foreign individuals and corporate entities who are resident outside Thailand, but who inherit assets located in Thailand are also subject to the tax. Spouses of testators are exempt from the tax and the value of assets can also be offset by liabilities of the estate.

It should be noted that there may be other separate tax issues, particularly with respect to the sale of assets and the transfer of funds out of Thailand.

Summary

Estate planning and succession in Thailand can be a difficult and complex area, particularly when there are multiple legal jurisdictions and foreign persons or entities involved. Our firm has a great deal of legal expertise and years of practical experience in helping our clients navigate this landscape. We can deal with a full range of succession issues. Please contact us if you need assistance with any of the following:

• Advice on estate planning and the draft and execution of wills in accordance with Thai law
• Help with the estate of a relative who has passed away in Thailand
• Court checks on the existence of any pending applications to distribute an estate
• Applications to the Thai court for the appointment of an executor (sometimes called ‘probate applications’ in other jurisdictions)
• The conduct of hearings in the Thai court, including the preparation of the applicant to give evidence to the court
• Contested wills and challenges to the distribution of an estate
• Estate administration and distribution, including assistance with dealing with banks, other institutions and the land office, preparing estate accounts and assisting with the distribution of the estate to the heirs
• Advice on inheritance tax issues and other tax issues relating to the sale or distribution of an estate and the transfer of proceeds outside Thailand