Making A Will And Trust

[JMRhoa123]

I have just had my first child recently and I have started to think about making a will. I am a US citizen and most of my assets are held offshore in Jersey, including my life insurance policy. If I make a will in Thailand, will it cover my assets that are not located inside the country? Or is it better to make one where the majority of the assets are located? Any suggestions on starting this process would be appreciated.

[GuestHouse]

The advice I had (and followed) was to have a will in Thailand covering assets in Thailand - with a clause that states this will covers assets in Thailand only + a will in my home country with a clause stating that it covers all assets excluding those held in Thailand.

A couple of points to note:

Your insurance my be managed via a trust - if so it must not be placed in a will as doing so would create a tax contamination - opening your insurance payout to death duties/taxes.

Likewise any pensions you hold.

You need to discuss this wit the insurers / pension providers but as a rule you will be required to complete a 'Statement of Wishes' that governs how you Insurance / Pension is distributed.

With respect to your will you should give careful thought to how you want to distribute your money and when it should be paid out.

As a guide segregate providing for your wife's and child's immediate and ongoing financial needs from the long term security/education etc of your child.

This really does need careful planning as placing large amounts of cash on the table can cause a number of problems.

A solution might be to make a will that provides an immediate, but not too large, cash payout to assist with immediate needs after your death while placing the bulk of funds in Trust - Income on capital being paid for on going living costs, while the principal is held back to be paid out at specified times to your child.

The payments can be made to coincide with things like educational needs etc.

A point of note: There is no trust law in Thailand, so you'll need to use Jersey law for any Trust you set up.

[scorecard]

The advice I had (and followed) was to have a will in Thailand covering assets in Thailand - with a clause that states this will covers assets in Thailand only + a will in my home country with a clause stating that it covers all assets excluding those held in Thailand.

A couple of points to note:

Your insurance my be managed via a trust - if so it must not be placed in a will as doing so would create a tax contamination - opening your insurance payout to death duties/taxes.

Likewise any pensions you hold.

You need to discuss this wit the insurers / pension providers but as a rule you will be required to complete a 'Statement of Wishes' that governs how you Insurance / Pension is distributed.

With respect to your will you should give careful thought to how you want to distribute your money and when it should be paid out.

As a guide segregate providing for your wife's and child's immediate and ongoing financial needs from the long term security/education etc of your child.

This really does need careful planning as placing large amounts of cash on the table can cause a number of problems.

A solution might be to make a will that provides an immediate, but not too large, cash payout to assist with immediate needs after your death while placing the bulk of funds in Trust - Income on capital being paid for on going living costs, while the principal is held back to be paid out at specified times to your child.

The payments can be made to coincide with things like educational needs etc.

A point of note: There is no trust law in Thailand, so you'll need to use Jersey law for any Trust you set up.

I agree with all of the above.

I would strongly encourage you to use a Thai lawyer who is expert in this area of the law (for the Thailand aspects of the matter). Please don't use just any lawyer, this subject can be complicated and the truth is that most Thai lawyers will not tell you 'this part of the law is not my strong point'.

I have a lawyer who is expert on these subjects, used him for 15 years and he recently helped to draw up and finalize my will. He speaks advanced English is a good listener, he always double checks everything before he proceeds with anything, and he doesn't hesitate to politely disagree.

The will was written in both Thai and English and he offered me a copy to have the language checked if I wished, to ensure the inuendo of the words was the same in both languages.

Before the will was signed he politely asked my Thai son (the main beneficiary of the will, 28 years old, speaks Thai and English at native speaker level) ) if he fully understood everything and then very politely asked my son to explain back the more complex parts of the will.

The lawyer is located in central Bkk, however he's not cheap, but I'm OK with that because I have peace of mind. Send me a PM if you'de like his name and number.

[Maizefarmer]

I have just had my first child recently and I have started to think about making a will. I am a US citizen and most of my assets are held offshore in Jersey, including my life insurance policy. If I make a will in Thailand, will it cover my assets that are not located inside the country? Or is it better to make one where the majority of the assets are located? Any suggestions on starting this process would be appreciated.

The advise I followed years back was to make my last will in the country of my primary residence - which is Thailand - so it is drawn up under Thai law: and for the record, a properly made out last will & testament is as valid and accepted the world over as is a will from any other country.

Where you do need to be careful is in respect of so-called trust law. Trust law is very new in Thailand and has a long way to go before it is fully mature - so if you have a house or land that is going to be held in trust by a 3rd party trustee or group of trustees till the beneficiary is x years old, best go off and see a expert on the subject, as there have been some recent disputes regards just how long assets can be held in trust for a beneficiary and what say they have in the admin of assets held in trust till they get them. ..... and it can get very complicated if the beneficiary and the assets are Thai based, but the trust its self is off-shore for tax purposes.

[GuestHouse]

Trust law is very new in Thailand and has a long way to go before it is fully mature -

Can you give a link to information on Thai Trust Law because it is my understanding there is no such thing.

[caf]

Trust law is very new in Thailand and has a long way to go before it is fully mature -

Can you give a link to information on Thai Trust Law because it is my understanding there is no such thing.

me too guesthouse. i thought there were no trusts in thailand

[Maizefarmer]

In a way you are correct - its more an issue of recognition by Thai courts of assets held/entrusted through off-shore resgietered entities (trusts) e.g. assets (example - a house or land) which is owned by a Thai regsiterd company, whose shareholders (Thai and/or otherwise) hold the shares not in their personal names, but through off-shore regsieterd entities.

I wrote it up on the forum a couple years back in response to a similar question - if you want the low down, I'll have to go away and get it all the detail, suffice to say - yes, it is possible: perhaps better stated as: off shore trust structure, which would is regonised and/or upheld by a Thai court if it was challenged as a legal way to hold assets (as was the case in 2 examples recently - the judges upheld the trustees and assets held in the trust).

[GuestHouse]

So actually there is no Trust Law in Thailand and, as case after case demonstrates, there is no real control over Thai lawyers - Put any property or wealth into the hand of a Thai lawyer and you are essentially asking to be robbed - The lawyer, should he choose to rob you, knowing full well that he will not be struck off the register nor will he face criminal prosecution.

DO NOT EVEN THINK OF PUTTING ANY WEALTH UNDER THE CONTROL OF A THAI LAWYER - NOT BY PSEUDO 'TRUST LAW' AND CERTAINLY NOT BY 'POWER OF ATTOURNEY.

[Maizefarmer]

No - not in the sense that we understand Trust law in the West: but there are legal mechanisms which can be used and which the Thai courts do accept in place of conventional trust law as we undertsand it in the West.

I do not agree with your comment regards Thai lawyers - there are many very reputable, interntaionaly recognised lawyers in Thailand - both Thai's and ex-pats - who are thoroughly respected and 100% honest : some of South East Asias most respected IP lawyers work for Tilleke & Gibbons (who by the way handle aspects related to commercial trust law with respect to beneficial ownership of intellectual property rights on a regular basis - an aspect of trust law that is practised here as it is practised in the West).

Baker MacKenzie is another international group who's lawyers enjoy a pretty good reputation.... and there are many more.

You are correct in the sense that every profession does have its bad apples, and it may even be true to say that proportionaly speaking Thailand has more than its fair share of bad apples - not only in the legal profession, but across the board in sorts of professions. But its certainly not the case that all Thai lawyers are bad or cannot be trusted, or even that the majority are that way inclined.

This I feel this is another of the stereotypical impressions held by Westerners about Thai citizens. I am sorry, but I must disagree with you - there are many very honest lawyers in Thailand.

Another take on the issue of dealing with lawyers is that clients are often looking to them to come up with "creative" solutions regards some or other business problem - the isue of land ownership as far as it applies to foreigners (in particular as it applies to houses) is one area in which a lot of ex-pats have exposed themselves (and their assets) to holding structures that are creatively set-up by lawyers to beat the system. There are lots of ways for expats to hold residential property and houses in Thailand that are 100% secure and legal (the long lease with option of renew and with the right to leave both house and land to a beneficiary is one legal way to do it), but there are also many other ways that are not really legal or secure - and no-one complains untill something goes wrong (not withstanding the fact that from the start it was clear to both ex-pat client and lawyer that it wasn;t quite right from the start). The point is: often the client is just as guilty - it often takes 2 to tango!

Thailand is certainly perceived as one of those Asian countries in corruption and dishonest y at many levels is rife - but it also has more than its fair share of foolish expats when it comes to financial due dilligence.

Edited April 20, 2009 by Maizefarmer

[GuestHouse]

That there are many reputable and honest lawyers in Thailand is not in dispute, neither is that there are many dishonest and disreputable lawyers in Thailand.

The issue is not simply a matter of honesty and reputation, it is far more than that.

The mechanisms to control the actions of a lawyer in Thailand and to seek redress are to all practicable pruposes non existant.

I can see absolutely no reason why the OP, who's wealth is held in Jersey, would use the Thai legal system to control his wealth in Jersey. More than that, there are plenty of reasons why anyone of us ought to be considering putting movable wealth that we plan to will to our families out of Thailand and in more reliable legal frameworks. Better still, not bringing it into Thailand in the first place.

[JimGant]

There are lots of ways for expats to hold residential property and houses in Thailand that are 100% secure and legal (the long lease with option of renew and with the right to leave both house and land to a beneficiary is one legal way to do it),

You just blew your credibility with that statment. The 'renewable lease' argument has been discussed ad infinitum on ThaiVisa, with the conclusion always being: the Land Office doesn't recognize anything more than a 30-year lease. Yes, you might draw up a contract with the current owner indicating the 30-year renewal option. And, yes, if he happens to be the same owner 30 years hence, you might be able to uphold this clause in court (no case law yet along these lines). But if he's sold the land.......... Anyway, no need to repeat the tons of info on this subject readily searchable.

[JimGant]

Any suggestions on starting this process would be appreciated.

Write out in longhand what you want to happen with your assets. Besides helping to organize what it is you want to happen, it will serve as a legal (holographic) will until -- or if -- you decide when and how to go a more formal route --. So, if you get hit by a truck tomorrow, you're covered, so to speak.

And while holographic wills don't require witnesses, they are a good idea. And since, presumably, you'll write the will in English, it probably is a good idea to have it later formalized and translated into Thai. And since that means it is no longer holographic, you will need witnesses. Two Amphur officials would be my recommendation. Thai lawyer optional. (Amphurs have boilerplate wills that, while not required, do give you a feel for the areas they are looking for to be covered.)

Life insurance policies you own on yourself, with beneficiary, don't pass through probate (ie, no will required). And, if your assets in Jersey are nontangibles, they too can escape probate if jointly owned, or even with something as simple as a Pay on Death (POD) clause and beneficiary.

A will, however, keeps things tidy when it comes to tangibles. For Jersey, if applicable, and for that '57 Chevy in the States (if not jointlyowned), draw up a will using boilerplate software. Witnesses required. Notarization optional.

[Kitsch22]

In a way you are correct - its more an issue of recognition by Thai courts of assets held/entrusted through off-shore resgietered entities (trusts) e.g. assets (example - a house or land) which is owned by a Thai regsiterd company, whose shareholders (Thai and/or otherwise) hold the shares not in their personal names, but through off-shore regsieterd entities.

I wrote it up on the forum a couple years back in response to a similar question - if you want the low down, I'll have to go away and get it all the detail, suffice to say - yes, it is possible: perhaps better stated as: off shore trust structure, which would is regonised and/or upheld by a Thai court if it was challenged as a legal way to hold assets (as was the case in 2 examples recently - the judges upheld the trustees and assets held in the trust).

Are you absolutely sure? Article 1686 of the Thai Civil and Commercial Code is explicit that trusts (direct or indirect) are of no effect whatsoever. The only exception (arguably it is not even an exception) is that another may control property for an infant or a person under a disability. I have had two separate professional Thai lawyers tell me that trusts are okay and enforceable until I confronted them with that Article. One immediately admitted that he had been wrong. The other smiled and denied that he had given the advice which he had in fact spoken just a few minutes earlier.

So where please can I find some authority for your suggestion that the Thai courts now recognise and enforce trusts affecting Thai property in any circumstances at all, offshore or onshore?