Usufruct

[LivinLOS]

Just thinking things through..

Can a usufruct be issued to a company ?? If so doesnt that negate the issue of the usufruct expiring at your demise and not passing it onto hiers and you can leave the corporation / trust to your hiers ??

For example I have an offshore corporation set up as a holding company, it holds many assets and bank accounts, and hence these are not in my name, as its set up in a legal jurisdiction where corporate privacy is beneficial it is almost impossible (unless your the CIA) to find its beneficial owners / shareholders and directors. Within this trust I administer not only my own assets but those of my family, my brother, father, mother, etc. Hence upon any of our demise the trust still stands and assets are protected without death duties.

Now if a usufruct can be issued to a corporation, then surely any officer of the company can maintain that usufruct ?? So this would preserve the asset within my families control for the life of the trust ??

[LivinLOS]

Also I see in the usufruct example that was posted.. The life of the usufruct can be set for x amount of years or for the lifetime of x person, what about if the usufruct is set for a very long period of years say 100 or 200 ?? Does the usufruct expire at the demise of the signatory ?? As its my understanding it doesnt expire if the Thai land owner dies, the usufruct commitment is passed to his hiers, so what about the usufruct benefit ?? Can that not be passed to your hiers ??

Wondering why it would last one way and not another ??

[chownah]

My recollection is that it can be set for a number of years but in the event that the person who gets the benefits dies then it automatically ends regardless of the time length it was written for.

Maybe the way for you to go is to get a usufruct in your name and then lease it to the trust. The trust then administers the lease which you can renew after 30 years since 30 years is the maximum length for any lease in Thailand. The lease automatically ends when you die regardless of how many years it was written for.

I could be wrong on this. It seem like the usufruct laws have been posted here at least twice...go find them and stuff should be clearer.

Since usufructs are for life or for a specified duration not to exceed life (if I'm correct on this) then a corporate entity would not be able to get one because the lifetime aspect of usufruct wouldn't make sense for it.

Chownah

Edit: I just found it...here it is. Seems pretty clear that it is for a lifetime which sort of very clearly implies a person....also it clearly states that if it is for a specified number of years that it ends at the persons death in any event.

CIVIL AND COMMERCIAL CODE OF THAILAND

TITLE VII: USUFRUCT

Section 1417

An immovable property* may be subjected to a usufruct by virtue of which the usufructuary is entitled to the possession, use and enjoyment of the property.

He has the right of management of the property.

The usufruct of a forest, mine or quarry entitles the usufructuary to the exploitation of the forest, mine or quary.

Section 1418

A usufruct may be created either for a period of time or for the life of the usufructary.

If no time has been fixed, it is presumed that the usufruct is for the life of the usfructuary.

If it is created for a period of time, the provisions of Section 1403 paragraph 3** shall apply mutatis mutandis.

In any case the usufuct comes to an end on the death of the usufructuary.

Section 1419

If property is destroyed without compensation being paid, the owner is not bound to restore it; but, if he does so to any extent, the usufruct revives to that extent.

If any compensation is paid, the owner or the usufructary must restore the property so far as it is possible to do so, having regard to the amount of the compensation received, and the usufruct revives to that extent; but, if restoration is impossible, the usufruct comes to an end and the compensation must be divided between the owner and the usufructary in proportion to the damages suffered by the respectively.

The same rules apply mutatis mutandis in the case of expropriation as well as in the case of partial destruction of the property or of partial impossibility to restore the property.

Section 1420

When the usufruct comes to an end, the usufructuary must return the property to the owner.

The usufructuary is liable for the destruction or depreciation in value of the property, unless he proves that the damage was not the cause of his own fault.

He must replace anything which he has wrongfully consumed.

He is not bound to give compensation for depreciation in value caused by reasonable use.

Section 1421

The usufructary must, in the exercise of his rights, take as much care of the property as a person of ordinary prudence would take of his own property.

Section 1422

Unless otherwise provided in the act creating the usufruct, the usufructary may transfer the exercise of his right to a third person.? In such case, the owner of the property may sue the transferee directly.

Section 1423

The owner may object to any unlawful or unreasonable use of the property.

If the owner proves that his rights are in peril, he may demand security from the usufructary; except in the case of a donor who has reserved to himself the usufruct of the property given.

If the usufructary fails to give security within a reasonable time fixed for the purpose, or if, in spite of the owner's objection, he continues to make use of the property unlawfully or unreasonably, the Court may appoint a Receiver to manage the property in his stead.? Upon security being given, the Court may release the Receiver so appointed.

Section 1424

The usufructary is bound to keep the substance of the property unaltered, and is responsible for ordinary maintenace and petty repairs.

If important repairs or measures are necessary for the preservation of the property, the usufructuary must forthwith inform the owner thereof and permit them to be carried out.? In case of default by the owner, the usufructuary may have the work carried out at the owner's expense.

Section 1425

All extraordinary expenses must be borne by the owner, but in order to meet these or expenses? coming under the foregoing section he may realize part of the property unless the usufructuary is willing to advance the necessary funds without charging interest.

Section 1426

The usufructary shall, for the duration of the usufruct, bear expenses for the management of the property, pay taxes and duties, and be responsible for interest payable on debts charged upon it.

Section 1427

If required by the owner, the usufructuary is bound to insure the property against loss for the benefit of the owner; and if the property is already insured, he is bound to renew such insurance when due.

He must pay the premiums of the insurance for the duration of his usufruct.

Section 1428

No action by the owner against the usufructuary or his transferee in connection with the usufruct or vice versa may be entered later than 1 year after the usufruct comes to an end; but in any action by the owner who could not have known of the end of the usufruct, the prescription of 1 year shall run from the time when he knew or ought to have know of it.

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END

Edited December 15, 2007 by chownah

[LivinLOS]

@ Chownah, Thanks.. I had read an example usufruct and I hear of them given to people only.. However 'for the life of' is also possible to legally apply to a corporation but perhaps this is not thought of in Thai ??

Can a ususfruct be issued to two people (eg myself and my brother) so either surviving member can reap the benefits ??

I also read that some people combine a usufruct and a lease, this throws up some odd thoughts but would assist with a first purchase clause.. Even if a usufruct can include a (fixed price) first purchase clause anyway ??

[Naam]

Can a ususfruct be issued to two people (eg myself and my brother) so either surviving member can reap the benefits ?

last year we were told that Pattaya land office allows for the first time usufruct for married couples. several weeks ago a read a posting on ThaiVisa that the same land office limited the duration of a usufruct to a period of 30 years, which in my (not so) humble opinion is judicial rubbish. but then... THIS IS THAILAND!

[LivinLOS]

Thai law is all so many shades of grey and interpretations..

I swore I would never buy into the market here.. But its just so hard to find a really nice place to rent.

[fxm88]

What happens if the usufruct holder's demise is postponed through extraordinary life prolonging means?

These days, a person can be kept on life support almost indefinitely. If you hold your land in a usufruct -- do you really want your wife's family deciding that it's better to keep you "alive" (as a vegetable) just so that they don't have to relocate?

[MrSquigle]

Put it in your will, that if in the worst circumstance that you are to be placed on life support, make sure it is at your home, get a portable generator and you can live on forever on your 'usufruct' land.....as a vegetable of course....maybe the inlaws will plant you out in the patch, with an umberella of course.....or turn you into a scarecrow.