Wills And Westerners

[pkrv]

We are actually a couple of westerners looking to possibly retire in Thailand. However we need to look a bit beyond the immediate future, as indeed English law on the matter of inheritence is troublesome at best for most. I suspect Thai law needs to also be considered.

Does anyone have experience in this area? Do we need a Thai Will?

We note the following web link.

http://www.pattayaexpatsclub.com/yourassetsinthailand.htm

[rishi]

No wills needed just to retire! You'll have to disclose some hints on your intended benificiaries, your intended property in Thailand and such, in order to get sensible advice.

[pkrv]

What do you suggest?

[Thaiquila]

I have come to accept the general wisdom that if you have significant assets in Thailand (like a condo, car, large bank account), that you are better off having a separate Thai will covering those assets. This Thai will can be mentioned in your home country will as well. Apparantly, it is possible to enfore a foreign will in Thailand, but I think it needs to be translated into Thai, and would likely be much more problematical and take more time. If your heirs would be outside of Thailand, it could be a major burden to them to enforce such a will. Cheers!

Edited June 19, 2006 by Thaiquila

[Dragonman]

We are actually a couple of westerners looking to possibly retire in Thailand. However we need to look a bit beyond the immediate future, as indeed English law on the matter of inheritence is troublesome at best for most. I suspect Thai law needs to also be considered.

Does anyone have experience in this area? Do we need a Thai Will?

We note the following web link.

http://www.pattayaexpatsclub.com/yourassetsinthailand.htm

The advice given in this website is quite accurate, for a change!

It will depend what assets you will have in Thailand, but even to get 1000 baht out of a Thai Bank can be difficult without a Thai Will.

[pkrv]

Some interesting replies - Yes the assets will be significant - These are transparent on other posts. I will ask for our existing will to be translated into Thai - An appropriate request, as we may well be guests in this country.

Does anyone know of the implications of Thai law and inheritance tax?

[GuestHouse]

As neither of you are Thai then the first piece of advice I would give is: Take especial care and give careful consideration of how much of your capital you wish to move to Thailand.

If you are not yet retired you might want to seek advice from a financial planner/accountant on how best to invest your money in order to finance your life overseas.

I would also take legal advice in the UK before you move capital overseas, or make overseas wills.

To correct one misconception, English Inheritance Law is not troublesome – It is very straight forward and provides extremely good safeguards for dependants and families via two reliable vehicles:

1. The laws relating to Wills and Testaments

2. Trust Law (I note here there is no Trust Law in Thailand).

Married couples moving overseas and considering moving their wealth with them should also take careful consideration with respect to Family Law. Family Law provides both partners with significant protections that should not be disregarded – This is especially important for women.

Finally, both the English and Scottish legal systems provide several levels of protection that

are definitely not available in Thailand – Very stringent controls over the actions of solicitors/executors and legal representatives (backed by a criminal prosecution system that does take action when abuse is reported) + The availability of Free Legal Aid under circumstances where the complainant has no funds to pursue a court action.

For the reasons above, I would urge any UK Retiree thinking of setting up in Thailand to leave the bulk of their capital in the UK where it is safe. I would doubly advise any married woman to think extremely carefully before giving up the protections her share of marital wealth has if left in the UK.

Wealth you leave in the UK must be protected by a UK Will.

If you are moving some wealth to Thailand, then your UK will must state that wealth you hold in Thailand is covered by your Thailand Will. Conversely, it is a good idea that your Thai will shall state, wealth in the UK is covered by your UK will.

Again - Take some time to talk to a UK Lawyer with regards making a will in the UK.

If you hold a Private or Company Pension in the UK then you need to give some consideration to how you wish that to be distributed after your death. Typically, your pension will make two levels of payment after your death – A dependent’s Pension and a Lump Sum on your death. This lump sum, where it exists, will usually reduce to zero over the first 5 years of retirement.

You must control these ‘Pension Benefits’ with a “Statement of Wishes” (Your Pension Provider can send you the forms) – You must not control your Pension Benefits in your will. The reason relates to the fact that your Pension is held in Trust, if you place your Pension benefits in your Will you may be placing your pension fund at risk of death duties.

The same applies to Insurance funds - Speak with a Lawyer back home.

A couple of important things about Thai Wills, firstly they must be in the Thai Language and Secondly they must be formally registered.

On the basis that I would not trust a Thai lawyer as far as I could throw him/her. I would advise that you get your will written by a lawyer – Photocopy it to remove all indication of who wrote the will, and then get a full review of the will by a second lawyer from a different law firm. I’d also be getting a translation by an accredited legal translator – I figure that millions of Baht capital is worth a few thousand Baht spent on double checking.

Now something very important:

The law of Trust does not exist under Thai law, moreover, Thai lawyers frequently take advantage of the trust of their clients. For these reasons I would never ever trust a Thai lawyer to be the executor of my will nor would I ever give a Thai lawyer my power of attorney.

You need to think about that, and give careful consideration to who you want to be your executor. I would suggest at least two people in order of (Spouse then children).

If your capital allows, consider providing expenses for your executor. I’ve done the job, its hard work, takes a great deal of time and involves quite a bit of expense.

Make sure your executor has a copy of your will and the details of all banks, account numbers, lawyers, insurance certificates, pension plans, share certificates etc.

As a parting bit of advice, I’m going to repeat what I have said earlier.

Leave wealth you want to protect BACK HOME and protect it with a Will - A will BACK HOME.

Do Not bring wealth you want to protect to Thailand or control that wealth with a Will from Thailand.

Thailand is not the place to put money you, or indeed your dependents, can’t afford to loose.

Oh and one last thought....

The secret to wills is 'Simple is Best', complicated wills make for complicated understanding.

Use the power of percentages (Not 20 million to my wife, 20 million to the cat's home. But 50% to my wife, 50% to the cat's home"...

Edited June 21, 2006 by GuestHouse

[Loom]

I can understand the need to be cautious about buying property and remitting funds to Thailand; and also the need to be careful about dealing with strangers in general. But it seems to be a consistent theme in this forum: a warning about never putting money in Thailand that you can't afford to lose. Other than getting swindled by crooks and possible adverse changes in Thai law, am I missing something about the BOT regulations about outward remittances for foreigners?

[Dragonman]

Some interesting replies - Yes the assets will be significant - These are transparent on other posts. I will ask for our existing will to be translated into Thai - An appropriate request, as we may well be guests in this country.

Does anyone know of the implications of Thai law and inheritance tax?

There is currently no inheritance tax in Thailand. But the Government (7 years ago ) has announced its intention to implement such.

[pkrv]

Dragonman - I sense a sharp mind at play - My direct thanks PKRV

[Dragonman]

If you have a British lawyer he should be able to sort out the residency requirements of Revenue Department in UK, in order to minimize or eliminate inheritance tax if you have a permanent home in Thailand.

[Niloc]

If I have beneficiaries in my home country and a legal wife and family in Thailand, is there any problem splitting the loot several ways? eg, half to my children in my home country, half to my Thai wife. I assume this will would be written and executed in my country by a executor there.

Would there be any difficulty for the executor to realise it all in cash and send my Thai wife her share?

[GuestHouse]

If I have beneficiaries in my home country and a legal wife and family in Thailand, is there any problem splitting the loot several ways? eg, half to my children in my home country, half to my Thai wife. I assume this will would be written and executed in my country by a executor there.

Would there be any difficulty for the executor to realise it all in cash and send my Thai wife her share?

Directing how you want your wealth to be split is exactly what wills are about.

There are a couple of issues you would need to discuss with your lawyer in the UK.

Firstly if your children in the UK are legally dependent on you, under the age of 18 and or in full time education, then they have rights to be maintained by you in your Will

An example might be, if you have a share in a house (shared during a divorce but inhabited by ex wife and any under 18 year old children) then your executor would not be able to liquidate that house while the children remain in the house – up to the time they leave full time education.

Secondly, you may need to consider how you leave money to your wife and child(ren) in Thailand.

The view I take is four things need to be considered:

1. Provision of a Home for your Wife and Child(ren)

2. Provision of an income for your Wife and Child(ren)

3. Provision of future help for your child(ren), higher education, a start in life etc

4. Protection of your children against being dispossessed by a later marriage of your wife and or her family.

The home ought to be quite straight forward, provided funds are available, and may in any case already be owned.

Because of peculiarities of Thai family culture, I would recommend securing an income for your wife and child(ren) rather than a fixed lump sum payment, which might get absorbed by family commitments leaving nothing to provide for the future. I think it is worth considering that with a secure home and a modest income a Thai family can have a very comfortable life. In those respects, protecting the modest income is a far better idea than giving a lump sum.

The problem here is that in the UK we would use Trust Law to provide such incomes, leaving capital in Trust and the Trust to disperse the income according to instructions within our Will. But Thailand has no Trust Law. So if you plan to provide a secure income you would need to do that in the UK – Talk to your UK Lawyer.

Likewise, provision of future help for your child(ren) in Thailand. Basically, you need to secure the fund in a Trust back in the UK and then use your Will to instruct the Trust to pay the money to your child(ren) at a later date.

Protection of your child(ren) against dispossession is a tricky one, not difficult to do, again Trust law was designed to do just that. Rather it requires you to look at how much wealth you have an make some decisions about how you want to distribute that wealth in the interests of your child(ren).

I helped a dear friend formulate his will when he learned he was dieing of cancer and I was executor to that will. This discussion about dispossession proved immensely difficult for his wife, who saw it as a slight on her that she and/or her family might not act in the best interests of their child.

It took a lot of persuading to get both my friend and his wife to understand that the issue is not can his wife and her family be trusted, rather, will they be able to act to protect the child’s interests. For example, what would happen if an aunt/uncle/cousin/brother/sister got into debt?; The same arises with a health problem and medical bills in the family or a second marriage and the risks of a new husband using any lump sum.

What is surely human nature (Not just Thai nature) – If there is a lump sum of cash, reasons to spend it can be found. If there is a steady but modest income a budget will be made and eventually followed.

All of these issues are easily dealt with by lawyers in a Will and are the exact issues that lawyers in the UK deal with on a daily basis.

Take some time to talk to a UK lawyer and to draught your Will. I realize that for some, doing this is difficult, but it should be considered as an act of caring for the people who matter to you. It’s a very caring thing to do.

Oh an please do not forget to contact the Executor’s of any pensions you have and complete a ‘Statement of Wishes’ telling them what you want to happen to your pension after your death. (See my post above regarding not putting your pension in your Will)

[pkrv]

GuestHouse,

Many thanks for taking the time and trouble to write such comprehensive replies. I have read what you say with very great interest and concur with most of what you have written.

On the matter of inheritance we were possibly talking at cross purposes, We do have difficulties in this area.

I liked the idea of separate wills for each country, and the precautions you suggest. And I tend agree on the issue of assets remaining in the UK.

Trusts and or Financial Advise etc would I'm afraid never factor into my plans, though I see why you suggest them in certain instances, these issues are all under/coming under control.

[astral]

A will written in the USA or UK can be probated in Thailand and will cover your assets in Thailand.

[GuestHouse]

Yes it can, but the problem is execution of the Will.

If you hold substantial wealth in the UK/US then it makes sense to have a Will and an Executor looking after those UK/US assets.

Likewise it makes sense to have a second Will and Executor looking after your Thai assets.

You can split the two and at the same time follow the golden rule of Wills - "Simple is Best"

[number6]

I have come to accept the general wisdom that if you have significant assets in Thailand (like a condo, car, large bank account), that you are better off having a separate Thai will covering those assets. This Thai will can be mentioned in your home country will as well. Apparantly, it is possible to enfore a foreign will in Thailand, but I think it needs to be translated into Thai, and would likely be much more problematical and take more time. If your heirs would be outside of Thailand, it could be a major burden to them to enforce such a will. Cheers!

i have a thai will as does my thai wife and an english will - my advice is see a good lawer - it will cost (they always do) - I understand but check with a good lawer who has both thai and forang partners that foregn wills are not enforcable in Thailand ( cost is high but if your assets are a lot worth it) - basically unless you plan to have substantial investents in thailand which you want to leave to a non thai your on a sticky wicket - ??? are you thinking of a house here (you cant own anyway legally a house - you can own a condo - best advice ever is dont put more in Thailand than u can afford to walk away from - see a good lawer and be prepared to spend 1,000+ pounds up and dont listen to those who say they can do it all for 10000 baht.

[malcolminthemiddle]

Sometime ago I employed a Thai lawyer to draft and register a Will covering my Thai assets. Eventually after much chasing (he kept saying don’t worry you are not about to die!) and several months he came up with a draft that was unacceptable offered no advice whatsoever on the legalisation/registration of the Will to guarantee execution together with a bill for Baht 10,000.

Instead I Googled a simple online version, drafted the Will myself and attached details of my worldwide assets as an Appendix that can be easily updated without changing the main text. I then had the Will witnessed and stamped at the British Embassy BKK, translated in Thai and notorised.

Trust this will suffice?

[Dragonman]

Sometime ago I employed a Thai lawyer to draft and register a Will covering my Thai assets. Eventually after much chasing (he kept saying don’t worry you are not about to die!) and several months he came up with a draft that was unacceptable offered no advice whatsoever on the legalisation/registration of the Will to guarantee execution together with a bill for Baht 10,000.

Instead I Googled a simple online version, drafted the Will myself and attached details of my worldwide assets as an Appendix that can be easily updated without changing the main text. I then had the Will witnessed and stamped at the British Embassy BKK, translated in Thai and notorised.

Trust this will suffice?

Ah, your lawyer was obviously a better soothsayer than lawyer.

Drafting your will is OK. When you say you had it notarized, where do you mean?

number6. Foreign Wills are enforceable, but need to be translated for Court hearing.

What is the 1,000 pounds for? An individual Will should cost no more than 10,000 baht, and this is being generous to the lawyer. Go to the Amphur and I believe the current rate is 150 baht.

[number6]

Sometime ago I employed a Thai lawyer to draft and register a Will covering my Thai assets. Eventually after much chasing (he kept saying don’t worry you are not about to die!) and several months he came up with a draft that was unacceptable offered no advice whatsoever on the legalisation/registration of the Will to guarantee execution together with a bill for Baht 10,000.

Instead I Googled a simple online version, drafted the Will myself and attached details of my worldwide assets as an Appendix that can be easily updated without changing the main text. I then had the Will witnessed and stamped at the British Embassy BKK, translated in Thai and notorised.

Trust this will suffice?

Ah, your lawyer was obviously a better soothsayer than lawyer.

Drafting your will is OK. When you say you had it notarized, where do you mean?

number6. Foreign Wills are enforceable, but need to be translated for Court hearing.

What is the 1,000 pounds for? An individual Will should cost no more than 10,000 baht, and this is being generous to the lawyer. Go to the Amphur and I believe the current rate is 150 baht.

lowta kuun - u normally get what you pay for and i was not saying you need to spend 1,000 pounds - what im saying is whatever you say Thai law (although mostly copied from UK law) has its querks - if your assets are substantial and u want to be sure and particularly if your wishes are at all unusual better to get best advice possible - yes you can get a perfectly good will done here for 10,000 baht if - its simple - your assets are not complicated - the lawer is good and honest (rare) - you dont have any complicated issues - my lawers firm in BKK have 50% foragn lawers and 50% Thai simply because however good their english Thais dont fully understand foreighneirs - they charge $ 150 ph (tons for here) and are worth every bit of it - my lawer in chiang Mai speaks perfect english and charges about 30 pounds ph - they are also excellent - for sometihng really important get 2 lots of advice - and person who relies on self made will is potentially asking for trouble - to ocnclude you also can get a load of rubish for 10,000 baht - i know ive been here a long time

[Dragonman]

Sometime ago I employed a Thai lawyer to draft and register a Will covering my Thai assets. Eventually after much chasing (he kept saying don’t worry you are not about to die!) and several months he came up with a draft that was unacceptable offered no advice whatsoever on the legalisation/registration of the Will to guarantee execution together with a bill for Baht 10,000.

Instead I Googled a simple online version, drafted the Will myself and attached details of my worldwide assets as an Appendix that can be easily updated without changing the main text. I then had the Will witnessed and stamped at the British Embassy BKK, translated in Thai and notorised.

Trust this will suffice?

Ah, your lawyer was obviously a better soothsayer than lawyer.

Drafting your will is OK. When you say you had it notarized, where do you mean?

number6. Foreign Wills are enforceable, but need to be translated for Court hearing.

What is the 1,000 pounds for? An individual Will should cost no more than 10,000 baht, and this is being generous to the lawyer. Go to the Amphur and I believe the current rate is 150 baht.

lowta kuun - u normally get what you pay for and i was not saying you need to spend 1,000 pounds - what im saying is whatever you say Thai law (although mostly copied from UK law) has its querks - if your assets are substantial and u want to be sure and particularly if your wishes are at all unusual better to get best advice possible - yes you can get a perfectly good will done here for 10,000 baht if - its simple - your assets are not complicated - the lawer is good and honest (rare) - you dont have any complicated issues - my lawers firm in BKK have 50% foragn lawers and 50% Thai simply because however good their english Thais dont fully understand foreighneirs - they charge $ 150 ph (tons for here) and are worth every bit of it - my lawer in chiang Mai speaks perfect english and charges about 30 pounds ph - they are also excellent - for sometihng really important get 2 lots of advice - and person who relies on self made will is potentially asking for trouble - to ocnclude you also can get a load of rubish for 10,000 baht - i know ive been here a long time

Just because it's an International Law Firm doesn't mean they understand much! Although there are a few good, but severely overpriced, firms around. From a professional viewpoint, Wills are one of the easiest things from a legal perspective, after that conveyances, and then the far greater complexities of Contract Law, Divorce,etc. American Lawyers, of which comprise 65% of the world's lawyers, thrive on State Laws to make everything complicated.

Finally, Thai Law nowadays has little connection to the Common Law of England and Wales, having been Codified in the 1930's by a team of lawyers from France, Germany, Belgium & Japan. However some Judges still defer to Common Law when the Napoleonic Law doesn't make sense.

[toptuan]

The advice given in this website is quite accurate, for a change!

Nice compliment to TV. It's like any other circle of experienced, helpful friends. Most advice would be helpful, but not 100%. Consider the advice but continue with your due diligence.

Edited June 25, 2006 by toptuan

[pkrv]

Its interesting that an English Will can be written (and is indeed is recommended to be) in very simple english terms.

There are booklets available at WH Smiths advising exactly how to go about it. Indeed my existing Will is self written I have attached a blank sort of copy for our situation. Though this may not be suitable for everyone.

From what I have seen so far a separate Thai Will (the same document in Thai?) that is correctly notorised will be sufficient. Again there are some interesting Google threads on this.

Blank_Will.DOC

[astral]

All my assets are now inside an Executive Bond Policy with Royal Skandia.

The nice part is that I still have control over where the funds are invested and I also draw an income.

As an insurance policy, it is outside the scope of the UK inheritance tax laws.

I have lodged instructions with RS as to how the funds are to be dispersed on my death.

All very neat and tidy.

[camerata]

If you hold substantial wealth in the UK/US then it makes sense to have a Will and an Executor looking after those UK/US assets.

Can a UK Will and Executor look after assets in offshore bank accounts in, say, Guernsey? Would those assets be subject to UK inheritance tax?

[camerata]

One thing I didn't see mentioned in this thread was the fate of assets in Thailand in the case of someone who dies intestate and has no relatives. It seems that money in bank accounts goes to the bank. Other assets go to the state.

[pkrv]

If you hold substantial wealth in the UK/US then it makes sense to have a Will and an Executor looking after those UK/US assets.

Can a UK Will and Executor look after assets in offshore bank accounts in, say, Guernsey? Would those assets be subject to UK inheritance tax?

I think (but I may be wrong) is that if your executor attempts to repatriate the funds, the funds will be hit by inheritance tax. Perhaps the answer is to encourage enjoying life abroad

[Filer]

If you hold substantial wealth in the UK/US then it makes sense to have a Will and an Executor looking after those UK/US assets.

Can a UK Will and Executor look after assets in offshore bank accounts in, say, Guernsey? Would those assets be subject to UK inheritance tax?

I think (but I may be wrong) is that if your executor attempts to repatriate the funds, the funds will be hit by inheritance tax. Perhaps the answer is to encourage enjoying life abroad

It is my understanding that a 'UK will' (by which presumably is meant a will set up in the English format and under English law), with a UK based executor, can govern assets held anywhere in the world. There may of course be additional local requirements which are advisable in order to facilitate the return or liquidation of assets held abroad - for example, having a local will in Thailand to cover any Thai assets and their distribution after death (without this a UK-based executor would have to do much more work to extract the Thai assets). I would imagine, however, that offshore banks in, say, Guernsey or other European jurisdictions would have no problem following instructions from a UK based-executor executing an English will.

On the issue of inheritance tax, I believe that the determining factor is the 'domicile' for tax purposes of the deceased person ('domicile' being a very complex issue in itself - too complex to discuss here - and quite different from mere 'residence' for tax opurposes). If you are considered UK-domiciled then all your assets, anywhere in the world, are potentially subject to UK inheritance tax, regardless of where they are based and regardless of whether they are actually repatriated or not. Of course, offshore/overseas assets which were not identified in an English will and which had been set up to be governed (in the event of death) by some other quite separate instructions, might escape the UK inheritance tax net.

I don't see that the actual repatriation of funds from offshore/overseas by a UK executor makes any difference. The question is: Are you UK-tax-liable? If you were not, and your instruction was for the executor to pick up money from offshore and distribute it to a person living in UK, I do not believe that inheritance tax would enter into it.

I am not a lawyer, just a well-informed person who has researched the same issue for myself, so please take proper legal advice for your own case before setting up arrangments. It's worth consulting a qualified lawyer in the countries in question. An English solicitor drawing up an English will for you should be easlily able to advise you on tax liabilities.

[camerata]

The question is: Are you UK-tax-liable? If you were not, and your instruction was for the executor to pick up money from offshore and distribute it to a person living in UK, I do not believe that inheritance tax would enter into it.

I'm not domiciled in the UK or liable to tax there. I just want to open some accounts there and have them covered by a UK Will rather than a Thai Will or no Will at all. Apparently, UK inheritance tax only kicks in when the amount is over 300,000 pounds, so I guess that makes it irrelevant to me. I'm on a Thai salary.

[Filer]

The question is: Are you UK-tax-liable? If you were not, and your instruction was for the executor to pick up money from offshore and distribute it to a person living in UK, I do not believe that inheritance tax would enter into it.

I'm not domiciled in the UK or liable to tax there. I just want to open some accounts there and have them covered by a UK Will rather than a Thai Will or no Will at all. Apparently, UK inheritance tax only kicks in when the amount is over 300,000 pounds, so I guess that makes it irrelevant to me. I'm on a Thai salary.

If you're not 'domiciled' (for tax purposes) in the UK, then any assets you have there or anywhere should be in the clear for inheritance taqx purposes, and the £300,000 threshold for inheritance tax is irrelevant. However, do take professional advice on your case. You can be totally free of UK income tax liability due to overseas residence and overseas source of income, but this does not by itself make you 'non-domiciled' for the purposes of inheritance tax on your world-wide assets..

The tax legalities of 'domicile' are a real minefield. It has nothing to do with simply not living there. Merely retaining and operating a bank account in the UK could compromise your claim to be 'non-domiciled' for tax purposes. Opening new accounts in the UK could also compromise 'non-domiciled' tax status - and it's very difficult in any case nowadays to open a new bank account in UK if you've severed all practical ties with the country (which is essentially what non-domiciled means) and if you cannot show current residency in the country or some other substantial current connection with the country. This is all due to anti-money laundering precautions.

Again I say, talk to an expert in English tax law. You should be able to identify some initial sources through the Web.