A Dying Dad'S Dilemma

[Godders]

A friend of mine (a Brit) is dying and has made a Will leaving half of the money in his Thai bank accounts to his five-year-old daughter. He has been told that under Thai law she cannot inherit until she is 20. He does not want his much younger Thai wife (who is the sole Administrator and Executor for the Will and has been left half of his Thai money) have any access to or control over his daughter's legacy.

The lawyers who drafted the Will have told my friend that the legal situation is that upon his death each of the banks will create a new account in his daughter's name, where the money earmarked for her will be held until she is old enough to inherit - and that they will have legal control of the money.

Is this correct? If so, what is to stop the banks putting it in an account which benefits them but not the daughter - for example a current account which incurs bank charges but pays very low or no interest. My friend is concerned that, over the years, inflation could eat away the inheritance unless there is some way of ensuring the money is made to "work".

Do any Forum members have experience of this rather bizarre (to me, at least)legal arrangement and how it works in practice? Or has my friend been given duff advice?

If necessary, could he appoint someone he trusts (a relative in the UK,perhaps) who would be allowed to act on his daughter's behalf to ensure the inheritance at least retains its value - for example, by continually reinvesting the money in high-interest term deposits?

There are good reasons why he does not wish to repatriate the intended legacy to the UK or to an offshore account which might have served his purpose better.

[churchill]

I'm no expert and you will need proper legal advice but I am sure a trust could be set up and managed in a way that is specified in advance for the benefit of your friend's daughter at a certain age ......

[CharlieH]

I would suggest seeking the advice of Ianguygil a forum member who works for Bangkok Bank he can certainly give you the banks perspective on this and will point you to those that can best help in this type of situation.

[CWMcMurray]

I would think that for something like this, there should not be any need for his lawyer to ""tell" him what will happen, asexactly what he wants to happen should all be clearly written in the will?

[PattayaParent]

I'm no expert and you will need proper legal advice but I am sure a trust could be set up and managed in a way that is specified in advance for the benefit of your friend's daughter at a certain age ......

Going by what I've read on this forum Trusts are not recognised and cannot be set up in Thailand.

Would it be possible for him to put the money in a UK offshore account for his daugther with a co-sign as one of his UK relatives (if they can be trusted).

[Sam Drucker]

I'm no expert and you will need proper legal advice but I am sure a trust could be set up and managed in a way that is specified in advance for the benefit of your friend's daughter at a certain age ......

Going by what I've read on this forum Trusts are not recognised and cannot be set up in Thailand.

Would it be possible for him to put the money in a UK offshore account for his daugther with a co-sign as one of his UK relatives (if they can be trusted).

The last line of the original post states that option is off the table:

There are good reasons why he does not wish to repatriate the intended legacy to the UK or to an offshore account which might have served his purpose better.

[Jebhead]

I'm no expert and you will need proper legal advice but I am sure a trust could be set up and managed in a way that is specified in advance for the benefit of your friend's daughter at a certain age ......

Going by what I've read on this forum Trusts are not recognised and cannot be set up in Thailand.

Would it be possible for him to put the money in a UK offshore account for his daugther with a co-sign as one of his UK relatives (if they can be trusted).

That's what i would do.

JH

[givenall]

If you cannot trust your wife and/or the mother, then istime to divorce even if your dying

[NovaBlue05]

Not sure I would want my wife to have full control and management of all funds if I knew that my daughter needed a signficant chunk of money... well in the future... for college, etc.. She doesn't have a milicious bone in her body but Thais don't seem to think that far ahead when it comes to financial planning......if in fact most even know what that is.

I would imagine if I were out of the picture, her family and friends would suddenly converge on her pretty quickly wanting "loans". It's hard for Isaan women to say no to their family.

Doesn't hurt to have a chunk of it protected. Obviously, your daughter could ultimately choose to piss it away on useless nonsense but at least you gave her the opportunity

[JohnC]

It would help if you said where your friend lived as for example the Pattaya Expats have two independent lawyers at their Sunday meetings who will give free legal advice, their is also a expat club in Chain Mai. All this aside he should talk to his bank manager and get a second legal opinion.

[AyG]

There's an English translation of the relevant civil code at http://www.thailandlawonline.com/Laws/inheritance-laws-civil-code-on-succession-and-inheritance.html

I can't see any requirement that the inheritor must be 20 years old.

[Junglejumbo]

There's no trusts to speak of here. I certainly wouldn't leave anything in the hands of a lawyer over here.

I think that all your friend has to do is ask the bank what the will do and state what you want in the will (ie.a deposit account). I think that providing that the child has a Thai nationality then the banks will not do anything "unusual". There would no justification for opening a current account, and I really doubt that a bank would do that.

However, I strongly suspect that the mother may be able to gain access to the funds as she may be able to sign a proxy form as a parent and guardian. This would not change the name on the account or even have the mother's name but it permits her signature to withdraw funds. She almost certainaly would be able when the child receives her first ID card if not sooner. Now ID card's are issued from 7 years not 15.

If he had no friend or other trusted family member to keep the money, I think that he should probably just accept that the mother will end up with the funds. By the time the girl grows up she's unlikely to even remember much about her loving father and knowing Thai culture, will hand the money over to help her poor mother.

Another alternative worth considering is buying a Thai stock such as PTT, PTTEP or BANPU and placing the share certificates in their name. These are strong, reputable companies that won't go bangkrupt and have long term growth prospects even if there's a war inbetween times. It may also be possible to get life time deposits from the GSB. I was given one for a gift but I don't know the age requirement.

[edokhv]

Depending on the amount of money involved why your friend would not buy a piece of land in his daughters name? That would keep money secure and better chances holding the value, as oppose to keeping it in cash with little or no interest. 15 years is a long time....

[CWMcMurray]

The land idea is an interesting one, as I understand, it would not be possible to sell the land without a court order until the child reaches 20 yrs old.

I also assume that your friend has made some sort of arrangements to take of daily expenses as well, correct?

If not, the land or real estate option may also be a good alternative. As the wife/mother can use the rental income for daily living expenses, but the property will be in the name of his daughter...

[jalansanitwong]

The phrase.....'much younger Thai wife'.........sends chills down my spine. She will be more interested in the money than the old farang's 'dek dek'. He must hire a good lawyer to stop her getting at the inheritance. Why do girls marry old farangs to start with.. ????

[JamesSwan]

I have a similar problem(albeit,no children).If you our a UK expat,then i suggest contacting "Edward Jones Investments" in the UK.I use this company in America,and have a living trust,that lets me control that trust from "The Grave".I have a Thai wife,no children,but she as most Thai women our "Slaves to the parents".I do not wish for the family to take her retirement money i will to her.I use a trust administrator(Edward Jones and have a co -owner/family who i can trust to follow my wishes).The trust is set up outside of Thailand(a must!)I can suggest you buy a annuity for your daughter(sold by Jones(John Hancock).That instrument is very good in long term financial planning,especially for children(Minors).I am sure you have heard the term"Trust Fund Babies",this method is very sound & safe in protecting assets for children.I have no idea about your reasons for not wanting to not use your home country.I can only tell you that asset protection is very well covered in many Internet sites.I have set up secured 'DD' direct deposits to my "Bank of Bangkok' acct.This method works very well,as nobody but the acct.holder can receive the funds(In person,no debit,and in the case of death,funds go back to the trust ,not a Thai family member.I am no expert on Thai laws,but i do know how to protect my assets from others that i wish to keep away.The perfect annuity pays interest that is deferred from capital gains tax,until it is annualised by the owner.I would never trust Thai lawyers & banks & laws to protect your legacy,so plan on some way to do this outside the the country of Thailand.Chok dee

[Godders]

If you cannot trust your wife and/or the mother, then istime to divorce even if your dying

Go back to sleep.

[Godders]

The phrase.....'much younger Thai wife'.........sends chills down my spine. She will be more interested in the money than the old farang's 'dek dek'. He must hire a good lawyer to stop her getting at the inheritance. Why do girls marry old farangs to start with.. ????

Sure you've got a spine?

[Godders]

I have a similar problem(albeit,no children).If you our a UK expat,then i suggest contacting "Edward Jones Investments" in the UK.I use this company in America,and have a living trust,that lets me control that trust from "The Grave".I have a Thai wife,no children,but she as most Thai women our "Slaves to the parents".I do not wish for the family to take her retirement money i will to her.I use a trust administrator(Edward Jones and have a co -owner/family who i can trust to follow my wishes).The trust is set up outside of Thailand(a must!)I can suggest you buy a annuity for your daughter(sold by Jones(John Hancock).That instrument is very good in long term financial planning,especially for children(Minors).I am sure you have heard the term"Trust Fund Babies",this method is very sound & safe in protecting assets for children.I have no idea about your reasons for not wanting to not use your home country.I can only tell you that asset protection is very well covered in many Internet sites.I have set up secured 'DD' direct deposits to my "Bank of Bangkok' acct.This method works very well,as nobody but the acct.holder can receive the funds(In person,no debit,and in the case of death,funds go back to the trust ,not a Thai family member.I am no expert on Thai laws,but i do know how to protect my assets from others that i wish to keep away.The perfect annuity pays interest that is deferred from capital gains tax,until it is annualised by the owner.I would never trust Thai lawyers & banks & laws to protect your legacy,so plan on some way to do this outside the the country of Thailand.Chok dee

[Godders]

My thanks to you and all other posters who did their sensitive best to come up with sensible solutions. I will pass them on.

[Bakseedaa]

If you cannot trust your wife and/or the mother, then istime to divorce even if your dying

I could certainly take care of it for her...quite easily, and show great profit..!

[AyG]

i suggest contacting "Edward Jones Investments"

Before contacting them, try Googling the company. There's a load of negative comments about them out there.

As far as I can tell, they are not an IFA. I.e. they are not independent. (The FSA register is down at the moment, so I can't be 100% sure.)

[PattayaPhom]

i suggest contacting "Edward Jones Investments"

Before contacting them, try Googling the company. There's a load of negative comments about them out there.

As far as I can tell, they are not an IFA. I.e. they are not independent. (The FSA register is down at the moment, so I can't be 100% sure.)

They are regulated by the FSA but as a company they work on a franchise basis....not the best company to contact.

[letitbe]

I'm no expert and you will need proper legal advice but I am sure a trust could be set up and managed in a way that is specified in advance for the benefit of your friend's daughter at a certain age ......

depends how much it is Problem is money will go over years with inflation and be worth very little later. I guess child is going to be brought up by his wife. If he does not want to put it in trust in UK or/and has no one in UK who can be trusted (dont use solicitors it will be eaten in fees) then he could consider buying a house or condo for his child and letting his wife use it. At least then his childs shelter will be securred. But hes on a looser sadly anyway if he does not trust his wife since if shes bringing child up in end she will get any money left. Best to find someone he can trust to look after it and then can also use it for his child's benefit if really needed. I keep telling friends to prepare for this long before it may happen but sadly hardy any actually none do. I trust my younger wife 100% and she has control of most of our money but our children also have property in their name here and my other children (from previous marriage) control a small trust should I go and in event we both go my children from previous marriage totally control all moneys for benefit of me and my new wife's children. Luckily my wife has over 15+ years totally agreed her family are not suited here to control anything and we both have wills for last 15+ years detailing exactly what should happen. Obviously you cant protect against every event. Leaving money in some bank is IMO worst thing possible. Just think what 10 million baht or so or whatever was 15-20 years ago probably more than enough for all schooling all expenses good life for ever and now it will hardly pay decent schooling and university for 2 kids through from say 8 years to 21 years.

Sad to hear his story but if he can try and find someone he can really trust to control money and to use it for his childs benefit as she needs it. It might be better for example to spend it on education at an earlier age then giving a very young person money who unless taught properly will just blow it all quickly.

[KRS1]

The child will have no knowledge about the inheritance. I think its more important that when the time comes the child is notified about it, some way some how.

The bank will never know of the death until after the wife notifies them.

In thailand simply having the document of 'Power of Attorney' (bai mob aumnard) allows you to steal legally, only when someone files a complaint of fraud will the perpetrator get caught. In this case the child will not even know about any money and will never file charges against the mother.

This goes for real estate also.

If the money is kept in Thailand the child will never see it, and if she does, she will get brainwashed since childhood to feel obligated to give it up.

Best thing to do is to keep the child educated in English speaking international schools. To enable a wider mentality with a fluent tongue, inject a western mindset, so he/she knows her rights.

[malcolminthemiddle]

If my death was imminent I would open a number of fixed term deposit accounts with one of the major banks in my daughters name before my death. I would split the funds into equal share across the different accounts for example 20% = 1 year fixed, 20% = 2 year fixed, 20% = 3 year fixed, 20% = 4 year fixed and 20% = 5 year fixed. I would leave instructions that as each term expired the capital + interest is to be invested into a new 5 year fixed term deposit. Although there are probably better returns available I would feel comfortable that my daughters inheritance would be protected until she was older enough to make her own decisions.

Edited September 14, 2011 by malcolminthemiddle

[bdenner]

IMO he really needs to get a close Farang friend, living in Thailand, to act as the Executor. Definitely NOT his TW!

The Executor then deals directly with the financial institutions setting up long term investment accounts and making sure the funds are secured for the child's future. I'm sure some sort of arrangement can be made where funds are made available to the child for on going education expenses etc. so long as it's stated in the will.

Unfortunately there will be nothing to stop the daughter giving the inheritance away once she has legally secured it.

[letitbe]

The child will have no knowledge about the inheritance. I think its more important that when the time comes the child is notified about it, some way some how.

The bank will never know of the death until after the wife notifies them.

In thailand simply having the document of 'Power of Attorney' (bai mob aumnard) allows you to steal legally, only when someone files a complaint of fraud will the perpetrator get caught. In this case the child will not even know about any money and will never file charges against the mother.

This goes for real estate also.

If the money is kept in Thailand the child will never see it, and if she does, she will get brainwashed since childhood to feel obligated to give it up.

Best thing to do is to keep the child educated in English speaking international schools. To enable a wider mentality with a fluent tongue, inject a western mindset, so he/she knows her rights.

sadly very true As I posted only way is if you have someone you can trust preferably in UK and set up a simple trust giving that person authority to use money for benefit of his child. Not foolproof but Thailand has no trust law and at least in UK it is totally illegal for anyone to use such money for anything but benefit of the child/children. Here she will get nothing in the end sadly unless he is lucky enough to have a wife who cares for their child. Dont knock all thais a lot of them want their children to have a better life than them and not all are selfish greedy non carers. It does of course depend how much money is involved. Without trying to preach I do think many older men here are totally wrong to have children if they have not got financial means to ensure their offspring have a decent chance in life and here that means providing a reasonable home, enough income if they die for a reasonable standard of living and enough for a proper education for their children. That means IMO at least 30-50,000 a month income and a paid for house and probably 5 million or more in an education fund. Allowance must also be made for inflation. Less than that and your children will probably grow up with little life chances. If you then compound that with possibly a greedy wife and extended family from a very poor background sorry to say anyone who has children without this backup is totally selfish if they are also say over 50. I debated long and hard with my much younger Thai wife before we had children and even then thought we could only afford 1 child. In end unplanned we had 2 and luckily i and our finances have survived until they are now entering teenage years but I still worry even with substantial assets and income weather it is sufficient to see them through rest of their education and hopefully university. They each have a trust fund with over 5 million baht in UK which is minimum needed to complete their education and university. If both me and my wife go my other children have agreed and will take them over to UK to live and of course then education is free which is main concern.

I wish the op well but unless he finds a way to get money out of Thialand and in control of a friend or relative his child will not see 1 baht im sure.

[gregb]

OK. Was just thinking about this and had an idea. If he doesn't want the money in an offshore account, I would buy a chunk of gold and stick in a safe deposit box. The key to the box I would have an offshore legal firm hold until the daughter was 18. I think the easiest way might be to get the box in the name of a Thai company, and then transfer the shares of that company to the offshore firm.

There is no need to tell the offshore law firm what is in the box, merely that they are to hold the key until a specific date, and then instructions on where to deliver the key and how to effect a power of attorney so that your daughter can access the box.

Not a perfect solution, but since Thailand doesn't have trusts and since he doesn't want the assets going offshore, this is a way to keep the assets in Thailand and still get the protection of a trustworthy offshore legal service.

You can tell your daughter about it in your will, but since it won't legally belong to either her or the wife there will be no way for them to open it. I am not a lawyer though, so I have no idea if this would actually work.