Trusts

[Neeranam]

I'd like to start trusts for my 2 daughters. I haven't a clue how to do it, can anyone help?

Not much just about 5-10,000 baht a month until they are 18 or 21.

[Alf Witt]

I'd like to start trusts for my 2 daughters. I haven't a clue how to do it, can anyone help?

Not much just about 5-10,000 baht a month until they are 18 or 21.

There was a similar question posted a while back and I still chuckle at the first reply - "There is no trust in Thailand". I don't know if the poster was being deliberately funny or meant to say "There is no Trust Law in Thailand". The latter statement is certainly true and it often seems that the former is also.

I don't know if anyone has come up with any "work-around" this problem. For example, it occurs to me that it might be possible to put an interest in Thai assets (including land?) in a trust fund registered in, say, the Channel Islands. Lets say a farang married to a Thai puts assets in trust with a child as beneficiary and the child's Thai mother as an administrator of the trust for the benefit of the child. Say land was registered in the mother's name but was held in trust for the benefit of the Thai child. Any ideas as to how a Thai Court would regard such an arrangement?

[cmsally]

A trust is set up by the issue of a trust deed and you have a settlor, beneficiary, trustee etc. For children you would be talking about something such as an accumulation and maintenance trust. However in Thailand as far as I am aware there are no laws to cover or recognise trusts.

For amounts mentioned best way is to open a bank acct for them and put money in every month. Both my children have accts that are in my husbands name and theirs ; they can't withdraw until I think 21. I can't remember what the name of the accts are but its with Krungthai. Interest not great at the moment but the accts have been going a long time.

[fletchsmile]

I'd like to start trusts for my 2 daughters. I haven't a clue how to do it, can anyone help?

Not much just about 5-10,000 baht a month until they are 18 or 21.

There was a similar question posted a while back and I still chuckle at the first reply - "There is no trust in Thailand". I don't know if the poster was being deliberately funny or meant to say "There is no Trust Law in Thailand". The latter statement is certainly true and it often seems that the former is also.

I don't know if anyone has come up with any "work-around" this problem. For example, it occurs to me that it might be possible to put an interest in Thai assets (including land?) in a trust fund registered in, say, the Channel Islands. Lets say a farang married to a Thai puts assets in trust with a child as beneficiary and the child's Thai mother as an administrator of the trust for the benefit of the child. Say land was registered in the mother's name but was held in trust for the benefit of the Thai child. Any ideas as to how a Thai Court would regard such an arrangement?

Probably both Yes there's no Trust Law in Thailand. There are certain things you could do outside Thailand for them, but for the monthly amounts involved you mention, it would be better to save up for a while/build a lump sum first, as charges are quite high if you go offshore to ay Jersey, Isle of Mann, Channel Isles etc. Beware also the sharks chasing your commission on these.

With an 18 to 21 year time frame I would seriously consider something linked to equities or bonds. Cash returns of1%-2% are hardly worth your while. No guarantees but over 5 years a good mutual fund would usually outperform cash. I hold around 60 mutual funds in different markets/countries and all are up over any 5 year period you choose. Providing you just sit tight thru the ups and downs, risk is minimal over that time frame, particularly if you spread ove different markets/funds. If you invest monthly you get the advantage of dollar cost averaging or baht cost averaging. Some mutual funds start at 5k minimum a month some at 10k, which is ideal.

Some might argue that it's a bigger risk to leave your money in cash, and not keep pace with spending growth/ prices/ inflation etc.

While not a recommendation to buy to anyone without knowing your financial circumstances as a whole picture it's not appropriate to recommend - I would recommend considering it though .

What I will say is that we have a young daughter whose is just over one. We've a few big expenditure items coming up, as we're buying a home. But very soon I will start to put about 5k-10k a month away in her name, for very similar reasons, eg provide for future, maybe education, etc etc. Funds I will do include: ING and Aberdeen as fund managers. I will choose a mixture of global funds and Thai funds, mainly equity mutual funds. Once she gets older I will then teach her about such things. Over half of Thais do not save anything. Only around 4% of Thais who actually save, do so in anything other than cash. We already do similar for my wife.

I want both of them to learn to manage finances. The stats above show most Thais don't manage them so well. Hopefully my wife and I will pass away together, after a long and happy marriage. But for our daughter, I think it's never to early to start to save. Then when she's older educate her about it, and she won't blow it - hopefully! Also hoping we get another one at some point so I can save double.

Edited November 13, 2007 by fletchthai68

[Neeranam]

Thanks a lot for the swift replies!

Given me a lot to think about. Maybe getting a bank account for each of them is better and puting in a few thousand every month.

Can I get a bank account for a 5 year old and a baby?

Fletch, do you work in banking? It's like a foreign language to me.

[Neeranam]

Does anyone know of any Thai banks that offer some kind of good long-term saving plan?

[fletchsmile]

Thanks a lot for the swift replies!

Given me a lot to think about. Maybe getting a bank account for each of them is better and puting in a few thousand every month.

Can I get a bank account for a 5 year old and a baby?

Fletch, do you work in banking? It's like a foreign language to me.

Does anyone know of any Thai banks that offer some kind of good long-term saving plan?

Yes I believe you can open both investment and bank accounts for your 5 year old and your baby. I think they also need to be under your name or your wife's name in addition to the child tho'. Not exactly sure exactly how it works in Thailand, for children, but I will do soon. Once done I'll let you know if you want. Will be similar procedures for most banks. Only really been interested in saving for children since our daughter arrived

Yes I've spent a few years in related industries. To be honest tho' a lot of my knowledge on investing is from personal interest and as a hobby, from a relatively early age. I started another thread on investment a couple of weeks back, but didn't seem much interest on TV. I have a fair few professional qualifications in these industries, but please note none of them qualify me to recommend or sell anything.

Most Thai banks will offer some sort of service: Bangkok bank, Siam Commercial, Kasikorn etc. The foreign banks also do, eg HSBC, Citbank, Standard Chartered, UOB.

BTW Think very carefully about tying yourself into plans that require you to keep making contributions. i.e where you commit to having to pay for "x" number of years. These can be a pain if your circumstances change, which isa real risk in Thailand. There are enough alternatives where you can stop and start as you choose with complete flexibility

Edited November 14, 2007 by fletchthai68

[GuestHouse]

I agree largley with what Fletch says above.

We established trusts for our children and over the ten and twelve year periods those tusts have been in place (invested in equity) the balance has risen dramatically above the interest rates available from UK banks and buildings societies. Which are in any case way above what a Thai bank would offer.

But I think Thai bank accounts are a poor choice for such long term saving for other reasons.

The reasoning behind trusts is to avoid taxes and to provide security of funds - In Thailand it is this second factor that needs to be managed.

I would think carefully about what happens if you die before your children are old enough to receive their trust fund.

If the money is sitting in a bank account (and you are not talking about small sums here) then I think there is a very good chance that it is going to be missapropriated.

A trust fund enables you to set rules that govern when your children get their money and under what circumstances and importantly if you establish a trust fund back home (not available anyway in Thailand) then the rules you set are governed under the laws back home and not under the minefield that is Thai law, Thai lawers and Thai banks.

[Neeranam]

I agree largley with what Fletch says above.

We established trusts for our children and over the ten and twelve year periods those tusts have been in place (invested in equity) the balance has risen dramatically above the interest rates available from UK banks and buildings societies. Which are in any case way above what a Thai bank would offer.

But I think Thai bank accounts are a poor choice for such long term saving for other reasons.

The reasoning behind trusts is to avoid taxes and to provide security of funds - In Thailand it is this second factor that needs to be managed.

I would think carefully about what happens if you die before your children are old enough to receive their trust fund.

If the money is sitting in a bank account (and you are not talking about small sums here) then I think there is a very good chance that it is going to be missapropriated.

A trust fund enables you to set rules that govern when your children get their money and under what circumstances and importantly if you establish a trust fund back home (not available anyway in Thailand) then the rules you set are governed under the laws back home and not under the minefield that is Thai law, Thai lawers and Thai banks.

Thanks for the input.

Could I set it up in Australia, where we're going in 3 months. If so, how do I do it? See a lawyer/bank or what?

[GuestHouse]

I don't know anything about Austrlian law.

If you are from Australia then I would certainly start there - or more precisely in your home country.

We set our first trust up via snail mail. We were in Thailand at the time and set the trust up in the UK via letters -but we did have to get our trust documents notorized at the UK Embassy in BKK.

[PattayaParent]

Could I set it up in Australia, where we're going in 3 months. If so, how do I do it? See a lawyer/bank or what?

The bank would almost certainly be able to help but they will recommend to you only their own financial investment packages.

For 'independent' advice see a Financial Adviser, although these will tend to offer advice on those investments which give them the most commission.

Get your Will drawn up also while you're home by a lawyer and make the lawyer the Executor. There's fixed fees for lawyers to act as executors whereas banks are unregulated in this regard and generally charge a percentage of the inheritance. (at least that's the case in the UK)

Of course your wife or a friend can be the executor rather than the lawyer but your kid would have difficulty suing to recover the money if the Trust was mismanaged, say by a trip to Las Vegas?

[Neeranam]

I don't know anything about Austrlian law.

If you are from Australia then I would certainly start there - or more precisely in your home country.

We set our first trust up via snail mail. We were in Thailand at the time and set the trust up in the UK via letters -but we did have to get our trust documents notorized at the UK Embassy in BKK.

No, I'm from the UK but won't be going there until xmas next year.

Did you set it up with a bank? I 'll check with them.

Thanks Pataya parent, I didn't see your post.

Edited November 16, 2007 by Neeranam

[cmsally]

From my experience you would be setting up a trust with a solicitor.

You will need a minimum of 2 trustees (if 2 then at least one must live in the UK) and a UK address to use as a mailing address.

If you (and also your children) are not UK resident then I am not sure where you stand as to drawing up a UK trust (as settlor and beneficiaries will not be UK resident - assuming you are not still resident), maybe someone has experience of this.

If at any stage you are thinking of making interest payments to your children, it would also make sense to open UK bank accts for them while you are there.

Again this is just from my experience, so don't take it as concrete.

[GuestHouse]

Banks are almost always a really bad bet for anything other than regular banking business.

At best they are selling you someone else's product (at an unreasonable fee).

[Irene]

I have also been searching for ways to arrange for payments to my children monthly and thought that an insurance company would have been the answer. I tried AIG brokers and they came out such a complicated scheme that I did not bother to understand it. Why don't you try an insurance company to find out whether you have a better luck than my previous approach?

[plachon]

I have also been searching for ways to arrange for payments to my children monthly and thought that an insurance company would have been the answer. I tried AIG brokers and they came out such a complicated scheme that I did not bother to understand it. Why don't you try an insurance company to find out whether you have a better luck than my previous approach?

No, not unless you want to throw good money away. Insurance companies in Thailand mostly seem to work through a network of agents who are only to happy to take a hefty commission off any money you wish to save for a rainy day, which could be money in the bank account, bonds or unit trust fund earning you money. Plus the aforementioned need of companies to tie you into their scheme in the long-term with unpalatable opt-out clauses ensuring you lose if your circumstances change. Avoid 'em like a dose of the clap is my advice.

[samran]

I don't know anything about Austrlian law.

If you are from Australia then I would certainly start there - or more precisely in your home country.

We set our first trust up via snail mail. We were in Thailand at the time and set the trust up in the UK via letters -but we did have to get our trust documents notorized at the UK Embassy in BKK.

No, I'm from the UK but won't be going there until xmas next year.

Did you set it up with a bank? I 'll check with them.

Thanks Pataya parent, I didn't see your post.

sounds like you are moving to Australia for good, in which case you'll probably be subjected to Australian tax law, regarless of where the funds exist. So it is wise that you talk to an Australian tax professional first.

As for Australian companies, I'm with www.amp.com.au, which is basically one of many Australian financial services providers, in what is probably a related area for you.

All the best with the move down to OZ.

[PattayaParent]

I have also been searching for ways to arrange for payments to my children monthly and thought that an insurance company would have been the answer. I tried AIG brokers and they came out such a complicated scheme that I did not bother to understand it. Why don't you try an insurance company to find out whether you have a better luck than my previous approach?

You could open a bank savings account in the child's name and put money into it every month.

A mate arranged this in UK when he was back there even using his Thailand address.

[Neeranam]

I don't know anything about Austrlian law.

If you are from Australia then I would certainly start there - or more precisely in your home country.

We set our first trust up via snail mail. We were in Thailand at the time and set the trust up in the UK via letters -but we did have to get our trust documents notorized at the UK Embassy in BKK.

No, I'm from the UK but won't be going there until xmas next year.

Did you set it up with a bank? I 'll check with them.

Thanks Pataya parent, I didn't see your post.

sounds like you are moving to Australia for good, in which case you'll probably be subjected to Australian tax law, regarless of where the funds exist. So it is wise that you talk to an Australian tax professional first.

As for Australian companies, I'm with www.amp.com.au, which is basically one of many Australian financial services providers, in what is probably a related area for you.

All the best with the move down to OZ.

We're only going for 3 weeks.

You could open a bank savings account in the child's name and put money into it every month.

A mate arranged this in UK when he was back there even using his Thailand address.

Now there's an idea - I'll see my ANZ bank in Melbourne, they'll surely have a financial advisor.?

one thing I'm scared of is lost money on insurance - When I was earning big money in the oil business 15 years ago, I started putting 300 pounds a week into an insurance thing. When I came to Thailand I stopped and could only get half of what I put in out.

[Mobaan]

Thanks for all the good answers here .

Let us perhaps expand the topic a bit.:

A Thai lawyer confirmed to us that there is no trust law in Thailand ,as we know it from the West .

Everybody so far spoke about cash contributions to some sort of savings account .

What about this :

We have a nice piece of land (several actually) ,and no children. There seems to be no one in my wifes family, whom we would consider to be able and worthy (golddiggers) to inherit this estate outright . As long as I am the first one to go, of course my wife for the rest of her life will enjoy what we have . At her death -or at a simutaneous death eg. car accident- I want to avoid that the family gets hold of everything for which we have worked very hard and then blows it all in a heartbeat .

We do not intent to skirt our responsibilities to needy family members ( small children ,old folks , school education,mentally disturbed persons) but nobody would be able to handle a windfall of x-millions . We need to find a way to sell the property ,maybe buy something smaller ,more appropriate for needy family members and have a structured payout plan ,that will ensure fairness to all be reasonably priced and is secure .

Has anybody ever checked into this kind of scenario?

What are we supposed to do ?

Does Sunbelt have anything to offer ?

[GuestHouse]

It depends who you want to leave the property to - it seems partly to relatives and partly to someone else or some organization.

Let's assume you wanted to leave the property to the Church (as an example - it could be some other individual).

You could leave a will that states they shall receive the property but are required to sell it, provide stated amounts to named persons and retain the residue above that amount for themselves.

They would then be encouraged to sell for a good price.

Just a thought.

[Mobaan]

Who In Thailand could be trusted to oversee some transaction like that-banks ,lawyers ???The charitable organization itselfwill need an overseer to make sue they stay on a straight path.

[GuestHouse]

You don't trust your wife's family

You don't trust your bank

You don't trust your lawyer

You don't trust the governers of charitible foundations

Seems to me you need to sell up, move your capital back to where trust law exists and rent in Thailand.

Meanwhile every single willed estate in Thailand goes missing? or Not?

[Mobaan]

Are you THE proverbial pessimist or do you have first hand experience justifying such a gloomy opinon?

All joking apart ,theres got to be a sensible way to accomplish this .

Anybody with input--- please do not hold back.