Thailand has an intricate law relating to Inheritance and Succession. Substantive knowledge of Thai law and court procedures is essential to protect the interests of the client. Under certain circumstances a foreigner might need a will in Thailand. Their Thai will then covers their assets in Thailand, like investments, bank accounts, vehicles, and personal property.
In this article we will discuss the following topics for your further information:
Statutory Heirs in Thailand
Will and Testament
Appointment of the Estate Administrator
Grounds for Discharging an Estate Administrator
1) Statutory Heirs in Thailand
When a foreigner dies in Thailand, the courts must be provided with a copy of their will. The family or attorney of the deceased person may provide the court with the will. Property and assets are divided according to the will, if there is no will, the the same is divided according to the law on intestate succession.
Regardless of the circumstances, the court will need to approve legal aspects of the will and appoint an administrator who can manage the will. When a person dies without a valid will (intestate) the entire estate is divided up among the heirs.
In accordance with Thailand's Civil and Commercial Code (Section 1629), There are six classes under which the statutory heir of a deceased person can fall. There is a specific order in which these heirs can inherit:
Full-blood brothers and sisters
Half-blood brothers and sisters
Aunts and uncles
Section 1635 of the same code also specified how the estate assets of the deceased person need to be distributed to their surviving spouse in addition to the six classes of legal heirs listed above.
The aforementioned statutory heirs can be appointed as Estate Administrators themselves, or they can appoint someone else who is not part of the legal heirs to be the Estate Administrator through consent and order from the Court. In Thailand, the purpose of this process is to protect the last wishes of the deceased person and is therefore supervised by the court. By extension this services to ensure that heirs comply with Thai laws.
2) Will and Testament
Estate administration and planning generally involve an attorney and client working together to structure the client's assets and plan for the distribution of the assets in the event of the client's death. This typically involves drafting a Will that meets a client's wishes and complies with all relevant laws. This could involve the establishment of trusts or other legal structures as well.
In accordance with the Civil and Commercial Code of Thailand, Section 1646.
"Any person may, in contemplation of death, make a declaration of intention by will concerning dispositions as to his property or other matters which shall take effect according to the law after his death."
There are different types of Wills in Thailand under the Civil and Commercial Code:
Under Thai law, a holographic testament may also be made, which includes the signature of the testator and the date of writing. (Section 1657)
Thai law allows for a valid will to be made only through word-of-mouth in certain circumstances - if death is imminent and the individual cannot make their will in any of the other forms described. (Sections 1655 - 1672)
A last will can take the form of a secret document at the Amphur, where the testator closes the documents themselves, signs it, and submits it to the official. Two witness signatures are required on the closed document. The official is expected to seal the last will and testament once handed over. (Section 1660)
A last will can take the form of a public document at the Amphur/Khet via a declaration to the appropriate public officer. The testator's wishes are declared in Thai, and the official writes it down in the last will (also in the Thai language) (Section 1658)
Most commonly, a last will and testament is done in writing in the presence of a minimum of two witnesses, signed by the testator, dated accordingly, and finally signed by the witnesses. This kind of will does not need to be registered or notarized to be considered legally binding. (Section 1656)
Witnesses for the Wills in Thailand:
A Thai Citizen or Foreigner can be witness to a will.
Individuals Not Eligible to Witness Wills in Thailand:‍
A beneficiary of the last will and testament or their spouse
A quasi-incompetent person as declared by court order
A person who is not of sound mind
When someone passes away, their assets are inherited by their heirs. Before any statutory heir can inherit, there are processes and details that must be managed. Inheritance law (Thailand) stipulated that an estate administrator must protect, distribute, and handle these properties. This estate administrator needs to be appointed either by court order or in the will of the decedent.
The following are the duties of an estate administrator:
Upon the death of the testator, the administrator will have one month in which to prepare the estate list. Alternatively, the date of when the administrator first became aware of their appointment as administrator or the date upon which they accept their role as administrator.
The administrator will need to keep the legal heir updated on the progress of the asset distribution.
The administrator will be required to manage the process and perform actions accordingly, including the submission of answers in Court.
All reasonable steps to collect estate debts as quickly as possible shall be taken.
Once creditors have been satisfied, the estate can be divided by the administrator.
The Court shall consider if there is a will expressing the intention of appointing someone as an estate administrator; the Court has to order it in compliance with such conditions. However, if a person dies Intestate or has no will and testament, then the heirs or legatees can file for an application to appoint someone as the Estate Administrator and manage all of the estates of the deceased person.
The Civil and Commercial Code of Thailand, Section 1711 to 1733, determines the ways to appoint an estate administrator. There are two ways for an estate administrator to be determined:
Through a will of the deceased appointing such estate administrator or also called estate manager; and
By an order from the Court proposed by the heir(s) or the public prosecutor. In addition to the appointment by a will, the heir or public prosecutor can appoint an estate administrator in case;
When the testator dies and their statutory heir is a minor, is abroad, or cannot be located;
If the estate administrator or heir is not willing to manage the estate assets, or is impeded in their duty to the estate distribution or administration;
If the condition of a will in appointing an estate administrator is ineffective.
The Civil and Commercial Code of Thailand stipulates the discharge of an estate administrator under Section 1727, which states, "Any interested person may, prior to the completion of the distribution of the estate, apply to the Court for the discharge of an administrator for the reason of neglect of his duties or any other reasonable cause. Even after having assumed his functions, the administrator may resign for any reasonable cause subject, however, to the permission of the Court."
‍This section of the Code also stipulates that any interested person may apply to the Court for the discharge of an administrator for the reason of neglect of his duties or any other reasonable cause prior to the completion of the distribution of the estate.
Furthermore, the Supreme Court mentions that if an estate administrator is likely to be dishonest in managing and distributing the estate, a person of interest can discharge him or her as well, for instance, if the estate administrator prepares a false list of an estate or declare the false outline of family members to conceal the true amount of members then they can remove the said administrator as well.
Inheritance Law on Specific Assets in Thailand
Thai Inheritance law in case of controlling shares in company assets
This is a complicated situation in terms of Thai Inheritance Laws. These shares belonging to a foreign director cannot automatically pass on to heir surviving. Such other person inheriting, on proper evidence produced, be registered as a shareholder by the company. Heis cannot just claim ownership of the shares. For more information, contact Juslaws today so that we can provide legal services in terms of the Commercial and Civil Code in Thailand.
Inheritance of a lease contract or tenancy
‍This is also a difficult subject in Thailand as a lease agreement is a personal contract and is terminated upon the death of the tenant. If a lease is well structured, then it can be inherited but only if pre-approved by the land owner. In the case of inheritance, the heirs must start a new lease agreement from scratch; the remaining term is not inherited.
IInheritance of Land
‍According to the Land Code Act, a foreigner cannot own land; this includes willed land. A foreigner may only inherit land as a legal heir when they receive permission from the Minister of the Interior. Specifically, the law speaks about foreign ownership under a treaty (special permission for foreign heirs), but at this time, there are no treaties for foreign ownership.
When a statutory heir exists as a foreigner who inherits land (like a Thai spouse) will have one year in which to get rid of the land they inherited. If the foreigner does not get rid of the land in time, the Land Department may do so on their behalf and retain 5% of the sales price as a fee.
Inheritance of Apartment
Inheritance of apartments not covered in the condominium act is not permitted by Thai courts. For more information, contact our Property Lawyers at Juslaws.
Inheriting a Condominium in Thailand
‍Inheritance of such a property does not automatically qualify the heir to register foreign ownership of the unit. They will have to individually qualify for such a registration. If they do not qualify as per the condominium act, then they must get rid of the unit within one year. If they fail to do this, the Land Department can sell on the foreigner's behalf.
Do I have to make a Thai will?
Generally speaking, in its simplest sense, foreigners do not need a separate will in Thailand as long as they have a legal foreign will elsewhere. However, there are some circumstances in which a foreign will is not sufficient. If the surviving spouse is a Thai national, for example, or there are specific real estate assets in Thailand, it might be better to involve a Thai law firm in the creation of a Thai will.
A limited jurisdiction clause can be included in a last will according to Thai laws. In such a case, your valid last will in another country must not include assets based in Thailand so that disputes can be avoided.
Inheritance tax in Thailand
‍At this point in time, inheritance tax is not levied in Thailand. Inheritance tax constitutes tax that is paid on assets you receive when someone has died. There were some plans to introduce inheritance tax at one point, but at present, it is not considered a priority any longer.
Some Basic Advice From Legal Services About Foreign Assets
A company should have more than one director, of which the majority are Thai. This will make it much easier to manage the death of a director and will cause the least amount of difficulty for the company.
If a foreigner fails to address Thai-specific affairs in their will, the Thai government can distribute assets in Thailand according to Thai law.
If a foreign national acquires land through inheritance, they must still meet the special requirements as per normal foreign affairs (for example, registering the land under a Thai company, etc.). If they do not meet the requirements, as per the Civil Code, the land will be sold on their behalf, and a 5% fee of the earnings will be retained.
More than one heir must adhere to the order of succession or the regulations stipulated in the will.
When a deceased foreigner is married to a Thai national but does not have a Thai will, assets are divided according to Thai law.
Half-blood sisters, half-blood brothers, Full blood brothers or sisters, grandparents, aunts and uncles, and surviving children, etc., fall within a specific order according to Thai Inheritance law. It can be helpful to know this law when drawing up your last will and testament in Thailand.
Juslaws & Consult counsels clients in all areas of Thai family law including providing services related to wills in Thailand and estate administration in the event of death or incapacity We have competent individuals in our company who can prepare the required documents and represent a client in the Court for the appointment of an estate administrator which is one of our family law services. Filing this motion to the Court requires several important documents such as a letter of consent from the heir having the right to the deceased's assets with a relationship outline to be contemplated by the Court. We can also provide legal consultations to foreigners who wish to appoint an administrator in Thailand or to draft a Will in Thailand. The lawyers at Juslaws & Consult have extensive experience in drafting Wills in Thailand and ensuring that the documents meet the requirements of both Thai law and the laws of the client's home country. It is strongly recommended that you contact a Thai lawyer if you want to create a will in Thailand or for estate administration. Please don't hesitate to contact us for more information.