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

[Thomas J]

1 hour ago, CMBob said:

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.

I don't disagree.  However if you have a will it avoids probate so the trust has nothing to do with avoiding probate.  I would advise people setting up trusts to fund them (placing assets in the name of the trust)

 in advance.  If you recall the OP wanted to know about setting up an investment fund for his Thai wife.  In the vast majority of instances assets that you have in banks, and investment companies offer the opportunity to name a beneficiary.  That beneficiary can be the trust.  There is nothing wrong with putting the bank accounts and investment accounts in the name of the trust.  I did so myself.  However, I also don't find much danger in having accounts at brokerage houses or banks with the trust named as beneficiary and worrying that the pour over will not take place.  Since she is Thai any real estate here will automatically be in her name anyway.

[Bill97]

1 hour ago, Thomas J said:

However if you have a will it avoids probate so the trust has nothing to do with avoiding probate. 

Oh Thomas you are wrong again.  Having a will does not avoid probate.  The trust can help avoid probate if it is correctly funded without the use of a will.

You have posted so much incorrect information please please stop.

 

[NancyL]

10 hours ago, Bill97 said:

Oh Thomas you are wrong again.  Having a will does not avoid probate.  The trust can help avoid probate if it is correctly funded without the use of a will.

You have posted so much incorrect information please please stop.

 

And given that the OP is an Aussie all this chatter about U.S. trust regulations is of little help to him.

[mikey88]

On 1/25/2021 at 7:33 PM, welovesundaysatspace said:

Most active funds and their fund managers regularly underperform the major indices. In order to find those that outperform, you would need something that your Thai partner and you (and most people) don’t seem to have: time and knowledge. Otherwise you’ll be just handing over your money to someone who gets you less return than a passive fund but charges you a ridiculous fee for it.
 

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). 
 

Unfortunately, in Thailand you don’t have access to cost-efficient passively managed ETFs. Try to open an account in your home country (if possible and if you can invest in those funds there) and then regularly transfer money there (for example, earn money for 6 months before making one big transfer to justify the transfer fees). Some people use an online broker like Interactive Brokers (the transfer issue is the same). 
 

 

 

Thanks....yes I don’t want Thai equities exclusively....

That.wouldn’t be wise.

I would want a balanced investment with domestic and international shares, property trusts, bonds etc...

What we would call in Australia a balanced ‘superannuation’ fund for workers to contribute into their whole working lives..

It seems odd that the product seems alien here in Thailand...??

[Bill97]

DBS in Singapore can do what you want.  Probably have to go there open an account.

[GrandPapillon]

2 hours ago, mikey88 said:

Thanks....yes I don’t want Thai equities exclusively....

That.wouldn’t be wise.

I would want a balanced investment with domestic and international shares, property trusts, bonds etc...

What we would call in Australia a balanced ‘superannuation’ fund for workers to contribute into their whole working lives..

It seems odd that the product seems alien here in Thailand...??

they do have it, it's called "Life Insurance" plans, with the funds available tax free to your family if anything happened to you

 

the Aussie Superannuation is what we call a variable annuity plan, it's controversial because it never delivers on its promises, funding shortfall can happen at the end of the plan, so forcing you to add capital before you can enjoy the annuities at retirement

 

all those instruments are really "castle in the sky" and "marketing spin" to a simple investment account or self-retirement account, just to grab more fees out of you ????

[mikey88]

On 1/30/2021 at 11:39 PM, GrandPapillon said:

they do have it, it's called "Life Insurance" plans, with the funds available tax free to your family if anything happened to you

 

the Aussie Superannuation is what we call a variable annuity plan, it's controversial because it never delivers on its promises, funding shortfall can happen at the end of the plan, so forcing you to add capital before you can enjoy the annuities at retirement

 

all those instruments are really "castle in the sky" and "marketing spin" to a simple investment account or self-retirement account, just to grab more fees out of you ????

Thanks for that...sorry for the delay....I hear what you’re saying..

Can you give your opinion on the ‘Life Insurance’ option......do you this is safe..?

Ideally I’m looking for Something I can pay into monthly maybe for a long period of time and whereby my partner gets a pay out at a specific age.

It would have to be safe of course and have some growth ....

 

 

[mahjongguy]

Regarding ITIN:  I have a will for all my U.S. assets. They will go into probate, stocks and bonds will be liquidated, taxes paid, and the remainder will be transferred to my partner's Thai bank account. Probate closed.

 

Where in that process would my partner need to have an ITIN?

[GrandPapillon]

17 hours ago, mahjongguy said:

Regarding ITIN:  I have a will for all my U.S. assets. They will go into probate, stocks and bonds will be liquidated, taxes paid, and the remainder will be transferred to my partner's Thai bank account. Probate closed.

 

Where in that process would my partner need to have an ITIN?

because they become a beneficiary owner of US assets, and the US Tax code system wants to identify every individuals receiving US assets, no matter where they live. It's a reporting issue mainly, and a way to stop tax evasion.

[GrandPapillon]

18 hours ago, mikey88 said:

Thanks for that...sorry for the delay....I hear what you’re saying..

Can you give your opinion on the ‘Life Insurance’ option......do you this is safe..?

Ideally I’m looking for Something I can pay into monthly maybe for a long period of time and whereby my partner gets a pay out at a specific age.

It would have to be safe of course and have some growth ....

 

 

you have to ask Insurance companies or banks like SCB, and look at the footprints and conditions, it will be full of "exceptions" so you have to be careful.

 

at the end, they will put money into Mutual Funds listed on stock exchange, usually not the best one, they will get commissions kickbacks, and expect performance to be poor. Also check the fees carefully.

 

Here in Europe, we have better deals for "Life Insurance". What I have seen in Thailand didn't look great, but Thais are not too smart so they don't really know they are on the short end of the deal. As for expats, Offshore Life insurance, won't name names but we know the usual suspects, G...I, N....A, etc...  they are mostly "money traps", hot fees (as much as 15% to 25% over 7 or 8 years) and very poor performance. You are basically paying the marketing guy that introduce you to those wonderful offshore products ????

[mahjongguy]

4 hours ago, GrandPapillon said:

because they become a beneficiary owner of US assets, and the US Tax code system wants to identify every individuals receiving US assets, no matter where they live. It's a reporting issue mainly, and a way to stop tax evasion.

Darn. Now I'm going to have to put this question to my attorney.

 

My estate will be converted to cash and transferred to Thailand. All taxes will have been paid prior to closing probate. My heir will have no financial connection to the USA. 

 

[Bill97]

On 2/24/2021 at 8:19 AM, mahjongguy said:

Regarding ITIN:  I have a will for all my U.S. assets. They will go into probate, stocks and bonds will be liquidated, taxes paid, and the remainder will be transferred to my partner's Thai bank account. Probate closed.

 

Usually people can avoid the big costs and delays of probate by setting up a revocable trust.  Having a non citizen non resident alien spouse complicates it but not too much.

[GrandPapillon]

9 hours ago, mahjongguy said:

Darn. Now I'm going to have to put this question to my attorney.

 

My estate will be converted to cash and transferred to Thailand. All taxes will have been paid prior to closing probate. My heir will have no financial connection to the USA. 

 

they have one as soon as they receive money from the US, that's the problem. In Europe now, if you do business with US organizations, you have to file paperwork with the US Treasury and FACTA, filing ITIN etc... even if those US organizations are simply your clients, the US think of you as possible "holding agents" of US assets, and in some case, as financial institutions of US assets even if you are not registered as a financial institution.

 

basically the US regards any transfer of assets as possible tax evasion and wants to track every participants with interests in US assets

[mahjongguy]

In that view, if some American in the USA wires money to the Thai bank account of his Thai girlfriend, the wire transfer will require the recipient to have a US ITIN. I don't believe that is the case.

 

If it matters, keep in mind that this money will be sent from the probate account, which will have its own ITIN. That ID will be invalidated when probate is closed. 

 

 

 

 

[mikey88]

On 1/25/2021 at 9:26 PM, 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. 

So a Thai person can open a Vanguard fund whilst in Thailand...?

[GrandPapillon]

On 2/25/2021 at 5:43 AM, mahjongguy said:

In that view, if some American in the USA wires money to the Thai bank account of his Thai girlfriend, the wire transfer will require the recipient to have a US ITIN. I don't believe that is the case.

 

If it matters, keep in mind that this money will be sent from the probate account, which will have its own ITIN. That ID will be invalidated when probate is closed. 

 

 

 

 

for living expenses, wiring funds from the US wouldn't require an ITIN. But who knows, that could actually change eventually. I wouldn't be surprised if it does require an ITIN for US funds to be wired in the future. I know ridiculous, but that never stopped the Americans before ????

 

interestingly, when opening an account in EUR in mainland Europe, you have to file for US authorities FACTA forms now and they ask for ITIN or some local tax number because of the reciprocal tax agreements between the 2 countries, just in case you receive US funds.

 

One of my business accounts in Europe in EURO was "frozen" last year and it took me 1 month to unfreeze the account simply because I didn't fill some silly FACTA forms for the US government. They wanted to know if I have received US funds as part of my business, and if I was, was my company had any US ownership, direct or indirect. Interestingly, if you have only 1 client from the US and they are contributing a lot to your annual revenues, they might be considered as "indirect" ownership of your business, and you need to file all kind of stupid forms for the US treasury. Basically, you need to report the name of that business with "indirect" ownership.

 

Yeah, it's getting stupid and ridiculous ????

[GrandPapillon]

another interesting facts about US regulations all over the world, even in Europe

 

SocGen at their HQ in Paris have an entire floor dedicated to US authorities with 100 US "expats" from the US Treasury paid for by SocGen, cars, high salary, and hospitality included. And they check everything and every transactions going through SocGen transactions pipelines, with some transactions needing to be approved by US personnel before being processed.

 

Same story at BNP PARIBAS, it's one of the conditions if those banks want to keep dealing with deals in USD and have a banking license to operate in the US.

[NancyL]

Back to the topic the OP posted.  If his Thai partner isn't already contributing to the Thai gov't National Savings Fund, there is a story in the business section of Bangkok's newspaper that we can't post links about is of interest.  The Thai gov't matches a % of contributions, much like employers in the U.S. often match contributions to a 401K plan.  If a Thai person isn't utilizing this already, they're missing out on free money.

[mikey88]

4 hours ago, NancyL said:

Back to the topic the OP posted.  If his Thai partner isn't already contributing to the Thai gov't National Savings Fund, there is a story in the business section of Bangkok's newspaper that we can't post links about is of interest.  The Thai gov't matches a % of contributions, much like employers in the U.S. often match contributions to a 401K plan.  If a Thai person isn't utilizing this already, they're missing out on free money.

 

Thanks for redirecting this back to my question....

Although the commentary on other issues is very enlightening too.

But....do you have any more information about this national savings fund...or how I would get some information on it.

 

 

 

[NancyL]

18 hours ago, mikey88 said:

 

Thanks for redirecting this back to my question....

Although the commentary on other issues is very enlightening too.

But....do you have any more information about this national savings fund...or how I would get some information on it.

 

 

 

Do a google search "Thailand National Savings Fund"  and go talk with a friendly bank manager or assistant manager.  If you're located in Chiang Mai, I'd suggest the Kad Suan Kaew branch of Bangkok Bank.  I don't know if someone enrolls through a bank, but they could point your partner in the right direction.

 

It sounds much like employer-sponsored 401K plans in the U.S. where the employer matches a portion of employee contributions.  Any investment advisor in the U.S. will tell someone to take full advantage of those plans before considering other investment/savings options for retirement.

[mikey88]

On 1/25/2021 at 7:33 PM, welovesundaysatspace said:

Most active funds and their fund managers regularly underperform the major indices. In order to find those that outperform, you would need something that your Thai partner and you (and most people) don’t seem to have: time and knowledge. Otherwise you’ll be just handing over your money to someone who gets you less return than a passive fund but charges you a ridiculous fee for it.
 

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). 
 

Unfortunately, in Thailand you don’t have access to cost-efficient passively managed ETFs. Try to open an account in your home country (if possible and if you can invest in those funds there) and then regularly transfer money there (for example, earn money for 6 months before making one big transfer to justify the transfer fees). Some people use an online broker like Interactive Brokers (the transfer issue is the same). 
 

Thanks for that....I could open a passively managed EFT in Australia which is my home country....and this is the form of investment I was thinking of..but I really want the investment to be in my partner’s name.   I don’t disbelieve you at all but it seems very strange that a Thai can’t open a fund in Thailand that invests in domestic and international shares for the long term...My idea is to let it grow for 15 years or so and hopefully put more in from time to time...Then there will be a nest egg there...hopefully.....    

 

 

On 1/25/2021 at 7:33 PM, welovesundaysatspace said:

 

 

[mike787]

depending on your citizenship, here's what I did.  In my country, I set up a separate investment account but we are both co-owners on it in case either dies.  Then I managed the investment portfolio, rebalancing it for optimal ROI (return on investment).  I have the funds in ETF's, commodities, cyclicals, etc....whatever it takes to secure the cash and make it grow aggressively.  No I am not an expert, NOBODY is.  I just learned a few basic things that work real good.  It's not rocket science. Why did I do it this way, because Thailand does NOT offer the same investment fund options that deliver high returns without charging high expense ratios.  

[welovesundaysatspace]

4 hours ago, mikey88 said:

it seems very strange that a Thai can’t open a fund in Thailand that invests in domestic and international shares for the long term...

It may very well be possible. I guess what I wanted to say is: Western countries offer a much broader range of funds and stocks at a much more competitive price. You’ll find ways to invest in international equities from here, but you’ll be limited in terms of choice, and you’ll pay ridiculous fees. That’s what I think; I may be wrong. Report back. 

[GarryP]

On 1/25/2021 at 4:51 PM, beau thai said:

Bangkok Bank offer mutual funds among which is the Fidelity Technology Fund and the wellington global healthcare-usa based.

 

Both very good high performing funds in sectors I think should continue to do well. (this is not advice!!).

 

We use both and buy automatically on a fixed day and fixed amount each month to achieve 'baht cost averaging' rather than try to beat the market timing- or 'forget' to make a payment.

 

These are not retirement funds as such but we use them to build a pot for that purpose.

 

The branch (left as you leave town) along the road to the rail station has a ground floor car park and upstairs level with investment advisors who are very helpful

I have both those funds. InnoTech has proven very good so far I am up 91% on that. For B-Care, I had to sell a load when I bought a house and that coincided with a big downswing, but still up 36% overall. 

 

Now investigating into ETFs. I am not looking into investing in funds from overseas as all my money is in Thailand anyway. I am willing to accept the higher charges of the Thai fund managers.  

[beau thai]

22 hours ago, GarryP said:

I have both those funds. InnoTech has proven very good so far I am up 91% on that. For B-Care, I had to sell a load when I bought a house and that coincided with a big downswing, but still up 36% overall. 

 

Now investigating into ETFs. I am not looking into investing in funds from overseas as all my money is in Thailand anyway. I am willing to accept the higher charges of the Thai fund managers.  

B-Future also frm bkk bank is worth a look. doing well

[GarryP]

1 hour ago, beau thai said:

B-Future also frm bkk bank is worth a look. doing well

Thanks.