Retirement investment managed fund for my Thai partner...?

[GrandPapillon]

6 hours ago, LomSak27 said:

 

I assumed they would study to determine which funds to invest in.  

 

Secondly, not considering thai funds at all. BTW I set up an investment for my G, in a Vanguard index fund. She likes it a lot. 

they don't really study what's best for you, but what's best for them, that is selecting funds that have the highest "kickback" fees attached to them

[GrandPapillon]

7 hours ago, mikey88 said:

That’s essentially what I’m after. I don’t want it in my name I want it in their name. I don’t want any complications with estates and wills.

 

Essentially I want a balanced managed share fund that can run for a long time...maybe 30 years...

 

I’m Australian ....there’s a multitude to choose from in Australia.....but I was looking for ideas or recommendations for Thai ones...

You can open a brokerage account with KGI securities, it's cheap, very low commissions, no annual maintenance fee, and pay an annual "interest" on cash balance. For Thai nationals, you will have to report any realized gains and you can receive dividend cheques directly at your home address.

 

KGI securities might "sell" you speculative investment because they make money in that, and that might not be a good fit for your partner, and she might lose money.

 

Do your own research for high dividend stocks if you want to be sure there is "no conflict of interest"

 

a real wealth professional would ask an upfront fee on an annual basis to do the research for you, and since small accounts (10M THB and below) don't like to pay anything, they get charged "hidden fees" from distributors or brokers.

 

Send me a PM if you want to know more what to do,

[GrandPapillon]

5 hours ago, NancyL said:

 

This is good advice for a U.S.-based partner, but not necessarily for one based in Thailand who will remain in Thailand.  I've seen too many Thai surviving partners who end up basically scammed out of their money because they don't understand how to access their U.S. based inheritance.  Remember, he's looking for advice relevant to Thailand, where the rules regarding trusts are very, very different.

yep, seen that myself, with friends "helping" and just took all the money by making them sign off some "dodgy" paper, what a shame

[GrandPapillon]

3 hours ago, Mayhem11 said:

As a former legal practitioner, I urge you not to attempt a self managed fund. Most financial advisors are under educated snake oil salesman more interested in run off commissions than providing prudent financial advice. You are much better served by putting up with smaller returns and guaranteed protection of capital of a managed fund.

good point, unless you pay fees upfront and everything is disclosed, and the advisor is registered under a strong regulatory body

[GrandPapillon]

2 hours ago, NancyL said:

I would definitely agree.  Most of the "independent financial advisors" I've known in Thailand are not to be trusted.

a lot of scam artists in Thailand selling "expat" retirement package, full of high fees and poor performance, as high 10% per year in "hidden" rules

 

I won't name names but we know them ????

[Saltire]

Just for information, last year I had to seek advice for a new private pension offer, called my UK Financial Advisor of 20+ years to be told that now, no UK FA can give advice to a non-UK resident.

 

I cold-called a few others who all told me the same story. In the end I didn't need one as my preferred option was a no-brainer.

 

 

[StraightTalk]

My two cents in addition to the most sensible advice from Thomas J.

If the proceedings of a revocable trust is too daunting but the Thai partner is willing to learn the basics of banking and investing consider this.

• Open a foreign currency (US$) account and fund it appropriately.
• Go to <https://brokerchooser.com/broker-reviews> and look for a suitable broker an d compare with others. Ensure that the broker permits you to open an account if you live in Thailand; no charges when the account becomes inactive; no minimum account deposit etc.. Some trade in US only - but this isn't too bad (imho).
• Do some reading <https://taxsummaries.pwc.com/thailand/individual/foreign-tax-relief-and-tax-treaties> and <https://www.irs.gov/forms-pubs/about-form-w-8-ben>

Although dated but still current imho - for investment products you could take Buffett’s Advice:
<https://markets.businessinsider.com/news/stocks/5-vanguard-funds-warren-buffett-1028264974>
<https://investorplace.com/2020/11/5-vanguard-funds-warren-buffett/>

 

Never ever sell the investment products and at the beginning re-invest distributions/dividends to the respective fund(s). Eventually, when you retire you will be glad you did so (imho).

Good luck.

[NancyL]

9 hours ago, GrandPapillon said:

good point, unless you pay fees upfront and everything is disclosed, and the advisor is registered under a strong regulatory body

A strong regulatory body overseas isn't going to care about a client in Thailand who was scammed out of money.

[NancyL]

1 hour ago, Saltire said:

Just for information, last year I had to seek advice for a new private pension offer, called my UK Financial Advisor of 20+ years to be told that now, no UK FA can give advice to a non-UK resident.

 

I cold-called a few others who all told me the same story. In the end I didn't need one as my preferred option was a no-brainer.

 

 

This is true in the U.S. now, too.  We worked around this with our long-time financial advisor by granting power-of-attorney to our long-time U.S. attorney who "sits-in" on all calls we have with our FA.  Technically, he is managing our finances while we are out of the U.S.

 

I'm surprised your U.K. FA didn't give you a heads-up on the rule change and offer a solution.

[GrandPapillon]

3 hours ago, NancyL said:

A strong regulatory body overseas isn't going to care about a client in Thailand who was scammed out of money.

I was referring this as a general rule for us farangs, obviously living in third world is a different story

[GrandPapillon]

5 hours ago, Saltire said:

Just for information, last year I had to seek advice for a new private pension offer, called my UK Financial Advisor of 20+ years to be told that now, no UK FA can give advice to a non-UK resident.

 

I cold-called a few others who all told me the same story. In the end I didn't need one as my preferred option was a no-brainer.

 

 

yes, thanks to Brexit ????

[MRtommyR]

On 1/25/2021 at 3:45 PM, Surelynot said:

True...he can open the account in his name (if he is British) and put what is considered to be her money into it..........of course you do have currency conversions and the problem of trust.....probably not worth the hassle at the end of the day......just a shame to miss out on ISA allowances which are amazing.

 

Maybe one of the reasons for me saying don't listen to anyone on here....especially me!!!!

At the risk of going off topic here, eligibility for an ISA is based on residency, not nationality. If a Brit based in Thailand opens one he has to sign the declaration that he is a tax resident of the UK which is passed to HMRC. They will find this very interesting if you are claiming non-residency on the other hand in order to avoid paying UK tax on your worldwide earnings. Proceed with extreme caution!

[MRtommyR]

On 1/25/2021 at 4:33 PM, welovesundaysatspace said:

An exception might be tax benefits, which currently exist for RMF and those new LTF replacements (forgot the name, SPF I think they are called). Even if you want to take those, I wouldn’t put all my money there, as they are only investing in Thai equities, and you don’t want to put all your money into one tiny market (they only give you tax benefits up to a certain amount anyway). 
 

The super savings fund (SSF), replacement for the LTF allows investment in international equities. I have one from SCB with tracks the S&P500 (albeit with SCB adding their own extra layer of fees over the underlying fund)

[Mike Teavee]

On 1/25/2021 at 3:35 PM, KannikaP said:

Every IFA I speak to tells me this. You get maybe 1.5% pa on GBP 10,000 TAXFREE. That's GBP 150 @ 20% = 3 QUID.

Do it regularly for 50 years and you may have something to talk about.

Your IFA should be telling you that if you're Non-UK Resident for Tax Purposes, then you cannot add funds to an ISA (Cash or Stocks & Shares)....

 

You can maintain any funds that were in it (or buy & sell shares) before becoming Non-Resident but you cannot add new funds.... 

 

 

OP I'm thinking of doing exactly the same with my GF & planning on her putting in 5K pm from her Salary & I will match it as not only does that build up a pot for her, but it also encourages her to think about regular saving.

 

I've had cursory looks at the fund products from Bangkok Bank but need to look into them a lot deeper so would appreciate any experiences/findings you can share. 

[Mike Teavee]

10 hours ago, Saltire said:

Just for information, last year I had to seek advice for a new private pension offer, called my UK Financial Advisor of 20+ years to be told that now, no UK FA can give advice to a non-UK resident.

 

I cold-called a few others who all told me the same story. In the end I didn't need one as my preferred option was a no-brainer.

 

 

That's alarming news to me as I turn 55 in a couple of weeks & wanted to start to look at options for my 2 pensions which kick in when I'm 60 but for me to do anything at all with them, I first have to take independent advice (They've sent me the forms that I need to get completed by the IFA)...  

 

[beau thai]

1 hour ago, Mike Teavee said:

Your IFA should be telling you that if you're Non-UK Resident for Tax Purposes, then you cannot add funds to an ISA (Cash or Stocks & Shares)....

 

You can maintain any funds that were in it (or buy & sell shares) before becoming Non-Resident but you cannot add new funds.... 

 

 

OP I'm thinking of doing exactly the same with my GF & planning on her putting in 5K pm from her Salary & I will match it as not only does that build up a pot for her, but it also encourages her to think about regular saving.

 

I've had cursory looks at the fund products from Bangkok Bank but need to look into them a lot deeper so would appreciate any experiences/findings you can share. 

We selected 2 funds from Bangkok Bank stable: Fidelity Global Technology and Wellington Global health, a few years back. If you check out the Fact sheets with Fidelity and Wellington (directly or via Morning Star) you will see that in 5 years one has doubled and one has trebled.

[Thomas J]

23 hours ago, Bill97 said:

I think you are guessing and know several lawyers who would disagree.

If the Trust was established in the USA it would have a tax identification number and file an annual return.  Any money distributed to the beneficiary would receive a K-1.  The trust in the USA would be liable for income taxes on any USA based investments.  The beneficiary would also file a USA tax return and be liable to pay USA income taxes on any income distributed to her but that would be a deduction for the trust.  I was not in the personal trust side of the business so though I am familiar with grantor trusts (living trusts) and their adminstration a person contemplating setting one up, should consult with a US estate planning attorney.  

With respect to making payments abroad that is something I can tell you unequivocally we did in the Trust Department all the time. Our single largest client was Ford Motor company and we made payments to their retirees, all over the world.  Additionally, the bank was headquartered in Detroit which is just across the river from Canada.  A very large number of Canadians worked in the USA were not U.S. Citizens but received payments from the bank from trusts established for them, or more typically retirement benefits they received from the US company they worked for.  




 

 

 

[dingdongrb]

I must be naïve and not up to the modern times but I thought the only form of retirement savings for Thais was to have a large family and send them off to work in the city where they would send money back home monthly?

[OneZero]

1 hour ago, dingdongrb said:

I must be naïve and not up to the modern times but I thought the only form of retirement savings for Thais was to have a large family and send them off to work in the city where they would send money back home monthly?

...or marry a farang.

 

[Dante99]

11 hours ago, Thomas J said:

If the Trust was established in the USA it would have a tax identification number and file an annual return. 

This is not true for Revocable Trusts set up by individuals.  I know for a fact that no tax identification number or tax return is normally required while the grantor is alive and the trustee.

   

[Saltire]

13 hours ago, Mike Teavee said:

That's alarming news to me as I turn 55 in a couple of weeks & wanted to start to look at options for my 2 pensions which kick in when I'm 60 but for me to do anything at all with them, I first have to take independent advice (They've sent me the forms that I need to get completed by the IFA)...  

 

Yes my pension provider asked the same, then I found out my FA couldn't advise me. In my case I neeed papers from a IFA for just one of many options. It was the least favourable option so I did not actually need them.

 

While looking around I found a few based in Singapore who offered to help but only if the pension pot was a very large number, which mine wasn't.

 

There are specialist companies but they do not come cheap.

[Thomas J]

3 hours ago, Dante99 said:

This is not true for Revocable Trusts set up by individuals.  I know for a fact that no tax identification number or tax return is normally required while the grantor is alive and the trustee.

The trust is not even funded until the death of the grantor.  In the persons will, they instruct that all of their assets are sent to the trust.  Until then, there is no money in the trust and hence no income to file a tax return on.  However, my point was that once the trust was funded and it had income, it would have to have a tax ID number file a tax return and distribute K-1's to any beneficiary receiving monies from it. 

[Dante99]

 

 

Oh Thomas, please no more

31 minutes ago, Thomas J said:

The trust is not even funded until the death of the grantor.  In the persons will, they instruct that all of their assets are sent to the trust.  Until then, there is no money in the trust and hence no income to file a tax return on. 

Many people put assets into the trust before death, infact most do.  It is the easy way.  The assets are in the name of the trust.  This is done to avoid probate which is one of the major benefits of the trust.  Lawyers writing the trusts instruct grantors to put assets into the trust before death for this reason.  If too much asset value is outside the trust at time of death then probate may be required.

 

 

The law says that income earned by those assets held by the trust before death of grantor can be taxed as normal on the grantors personal return.  No Trust tax return is required.

[Thomas J]

1 hour ago, Dante99 said:

Many people put assets into the trust before death, infact most do

You are correct, that is an option.  It is advisable but not required to fund the trust prior to death.  Many do it and it is a prudent thing to do. Others like bank and investment account have beneficiary designations and you can name the trust as the beneficiary. 

  Some assets like real estate get complicated after the death of the grantor.  Probate and Trusts are two different things.  If you die without a will, then the estate must be probated.  If you die and have no will it is called dying intestate. 
In any event, for the original OP I would suggest he contact an estate planning attorney.  If his primary concern is her lack of investment expertise and money management, a trust is the best way to make sure she is taken care of in the future and not fleeced.  I don't know what country the OP is from but I would certainly trust the financial institutions in the USA/Canada/Switzerland/UK/Germany etc far more than I would trust the Thai Banks.  Lets face it, Thailand in recent years went through a coup.  There is no telling what "might" occur if there was political or financial instability in the country. 

 

[silverhawk_usa]

On 1/25/2021 at 9:19 PM, NancyL said:

They are told to hire a U.S. lawyer and that lawyer charges them a high rate.  They run into issues with not having an ITIN.  Having to file U.S. tax returns, etc.  

 

I think the Thai banks are set up to do this better for Thai people.  

 

If the partner has lived and especially worked overseas in the same country as their foreign partner, then it's a different matter, but nothing beats being able to go to the local SBC or Bangkok Bank branch where the investment fund was established and talking with the people there for the Thai partner.

This is the only post I have seen that really mentions an ITIN (Individual Tax Identification Number). I am not as knowledgeable as many posting here, but if you plan receipt of any U.S. funds for your spouse or other, if they qualify, get them an ITIN as soon as you can.  It is not that difficult. Just follow the instructions on the IRS website.  It would be difficult for them to follow all the steps if you were gone.  My wife is a beneficiary on a U.S. Mutual Fund and will need the ITIN when the time comes.  Also, I am able to file U.S. taxes as Married filing jointly with her ITIN which made a big difference in tax owed.

[Bill97]

1 hour ago, Thomas J said:

Some assets like real estate get complicated after the death of the grantor.

Real estate can easily be put into a revocable trust prior to death then is easy to handle after death.  I have done it.

[Thomas J]

1 hour ago, Bill97 said:

Real estate can easily be put into a revocable trust prior to death then is easy to handle after death.  I have done it

Yes it is easier prior to death than afterwards and I have done it also.  You just go and change the deed to the name of the trust and have it filed at the County Register of Deeds.  After death a bit more complicated.  You have to have the death certificates, papers listing you as the executor of the estate, signature guarantees. copy of the trust, death certificate.  The easy ones are the bank and investment accounts.  Just put the name of the Trust on the beneficiary designation.  When you file the death certificate the financial institution changes the name.  If the person does not mind, it is just as easy to change those prior to death also.  It just means that the title of the account is in the name of the trust and you execute any action as the trustee.  After death whoever is the contingent trustee assumes power. 

 

[Thomas J]

2 hours ago, silverhawk_usa said:

ust follow the instructions on the IRS website.  It would be difficult for them to follow all the steps if you were gone.  My wife is a beneficiary on a U.S. Mutual Fund and will need the ITIN when the time comes.  Also, I am able to file U.S. taxes as Married filing jointly with her ITIN which made a big difference in tax owed.

Biggest problem right now is that to get an ITIN you need to mail it hard copy snail mail.  With Covid mail service between Thailand and the USA was suspended.  I have not checked recently but the last time I went to Thai Post they said letters to the USA were strictly UPS and DHL and neither of those will deliver to a post office box number which is what the IRS uses to collect mail. 

[Dante99]

1 hour ago, Thomas J said:

Biggest problem right now is that to get an ITIN you need to mail it hard copy snail mail.  With Covid mail service between Thailand and the USA was suspended. 

Mail service to the USA is now working, maybe a bit slow but working.

 

1 hour ago, Thomas J said:

neither of those will deliver to a post office box number which is what the IRS uses to collect mail. 

You can get a non po box address for the IRS that will accept DHL or Fedex if you try.

 

So your problems were imaginary not real.

[CMBob]

7 hours ago, Thomas J said:

The trust is not even funded until the death of the grantor.  In the persons will, they instruct that all of their assets are sent to the trust.  Until then, there is no money in the trust and hence no income to file a tax return on.  However, my point was that once the trust was funded and it had income, it would have to have a tax ID number file a tax return and distribute K-1's to any beneficiary receiving monies from it. 

For clarification:

1)  One of the major reasons a person creates a living trust in the US is to avoid all probate proceedings.  To accomplish that, one creates a living trust AND transfers all assets (with some exception for accounts that have direct beneficiaries in most cases).  If one doesn't transfers all assets (with noted exceptions) to one's living trust, then a probate of the assets is required to get the assets into the trust.  

2)  Almost always, the person who sets up the trust is the trustee.....and he/she continues as usual during lifetime to file normal income tax returns, etc. (the trust doesn't file anything during that time period and has no need to obtain any tax identification number during that time period).  The IRS considers that one's assets in a revocable living trust (where the person setting up the trust is the trustee.....which is almost always the case) still belong to the trustee personally and he/she continues tax-wise as he/she has done before.

3)  After death, the successor trustee(s) then follow the terms of the trust (paying any leftover debts and distributing trust assets according to the terms of the trust).  If (typical) the trust provides for immediate distribution of assets, then that's done and the successor trustees will likely have to obtain a tax identification number for the trust and file tax returns for one year.  If the trust provides for management of the assets (and, for example, periodic distribution of funds to named beneficiaries) over a period of years, then the successor trustees would be filing tax returns for that time period.

One the biggest errors in the whole living trust process is not properly funding one's trust (or, for example, obtaining a new bank account or investment account in one's own name versus the trust's name) as that leads to the hassle, expense, and time to probate assets to the trust.  So creating a living trust and counting on your pour-over will to transfer assets to your trust is exactly the wrong thing to do in almost all cases.