Inheritance Laws in Thailand
Updated: 5 days ago
How could this affect you?
Is your home safe in the event your wife dies before you?
If your wife has not made a Last Will or Testament leaving you the right of habitation or have not executed the Will according with Thai law then the law of (intestacy rules).
Without a legal Will the Intestacy Rules will determine what happens to assets when you or your wife dies.
Under Thai inheritance laws this generally means that the assets will be distributed amongst the statutory heirs. Under section 1629 of the Civil and Commercial Code of Thailand there are 6 classes of statutory heirs, and they are entitled to inherit in the following order:
brothers and sisters
half brothers and sisters
uncles and aunts
The surviving spouse is a statutory heir, subject to the special provisions of Section 1635 Civil and Commercial Code.
Distribution when there is no Will.
Thai inheritance laws designate intestate heirs if there is an heir surviving in one of the 6 classes, the heir of the lower class has no entitlement to share in the assets. The one exception is where there is a descendant (children) and a parent in which case, they take an equal share (section 1630). If there is more than one heir in any one class, they take an equal share of the entitlement available to that class. The surviving spouse is a statutory heir, but their entitlement depends on what other class of statutory heirs exist. If there are surviving children of the deceased, the spouse and children take the estate between them. Therefore, if there are three children, then the estate is divided into four equal shares.
So, to put this in layman’s terms if your Thai wife should die before you without making a Will and has 3 children the assets in her name (including the house) will be split between you and the 3 children.
Did you sign a form at the land office when the land or house was transferred into your wife name?
If so this form states the land or house is not part of the matrimonial property.
This means you have no entitlement to it if there is no will left by your wife.
If there are no children, then it is split between her parents and brothers and sisters and you.
In the first scenario you will only inherit a quarter of the asset.
In the second this could be split between many people.
This could and has led to many problems for foreigners in Thailand because it means you may have to buy out the family to remain in the house you already paid for.
There is no minimum portion of the descendant's estate that must be assigned to the surviving spouse in Thailand, but before distribution half of the common property between husband and wife must first be given to the surviving spouse
What if you can’t afford to buy out the family?
What if there is a large family what percentage will you be left with?
Do not leave this to chance secure your future and peace of mind contact Lawyers for Expats Thailand for a free consultation .
Lawyers for Expats Thailand provide a full solution including writing and executing of the Will with supporting legal documents to ensure you are covered and that the Will is legal and has been executed in a manner to offer the uttermost protection against it from being contested.
In addition to the Will we strongly recommend the husband of a Thai national has a usufruct or superficies agreement to offer complete security of habitation under all circumstances.
Are foreign wills accepted in Thai law?
Foreign wills are acceptable in Thai Courts subject to being translated and authorized at the Ministry of Foreign Affairs, but the legal procedure to enforce a Foreign made Will can take a long time to process.
The execution of a foreign will in Thailand is always subject to a court procedure.
Making a will in Thailand could be one of the most important documents you ever make, so ensure you take good advice from Lawyers for Expats Thailand our English Speaking Lawyers and staff are at hand to assist you.
Having a correctly prepared and worded Will is important as is the execution of the Will.
We provide carefully worded wills that offer you the highest level of protection, in addition we ensure that the will is carefully executed to stand up against being contested.
We adopt a belt and braces philosophy to ensure you are protected from all possible circumstances.
Under Thai law trusts (the relationship where someone else holds the property (trustee) is subject to certain duties to use and protect it for the benefit of others) created whether directly or indirectly by a Will or by any juristic act producing effect during lifetime or after death have no effect whatever (section 1686 Civil and Commercial Code). If the testator wants to dispose of his estate in favor of a minor or adjudged incompetent person or quasi-incompetent person he can entrust the custody and management thereof to a person other than the parents, guardian, custodian or curator, he can appoint a controller of the property by Will
What happens if I am left the land in a Will?
Foreign land ownership by succession
Section 93 of the Land Code Act: "A foreigner who acquires land by inheritance as statutory heir can have an ownership in such land upon a permission of the Minister of Interior. However, the total plots of land shall not be exceeding of those specified in Section 87".
Any foreigner who is married to a Thai national is under section 1629 Civil and Commercial Code a statutory heir (i.e heirs who are entitled by Thai law) states that he can apply for permission of ownership of inherited land from his Thai spouse pursuant to section 93 of the Land Code Act.
In reality ownership will not be given to the foreign spouse. The over fifty year old Section 93 of the Land Code Act is written for inheritance of land by foreigners under a treaty (section 86 of the Land Code Act) and does not apply to foreigners acquiring land by inheritance from a Thai spouse. There is at this moment no treaty with any country allowing any foreigners to own land,(although there has been talk about).
This means no Minister of Interior will or can give permission to any foreigner to own land in Thailand.
Note that it is only since 1999 that Thai nationals married to a foreigner are legally allowed to acquire land.
The answer to the question 'can a foreigner inherit land in Thailand' is yes, as a statutory heir, but he cannot register ownership of the land because he will not be given permission. Under present law he must dispose of the land within a reasonable period no greater than 365 days 1 year, to a Thai national. If the foreigner fails to dispose of the land the Director-General of the Land Department is authorized to dispose of the land and retain a fee of 5% of the sale price before any deductions or taxes.
Note: inheritance of a house separate from the land relates always to having an interest in the land.
These 3 documents are important as is their registration (superficies, lease, usufruct).
Can I inherit a Condominium as foreigner in Thailand?
A foreigner who acquires a condominium unit by inheritance, either as statutory heir or inheritor under a Will, can acquire ownership if the foreigner qualifies for ownership under Section 19 of the Condominium Act.
If they do not qualify they are required by law to dispose of the unit within 1 year from the date of acquisition.
Section 19 (7) Condominium Act: "A foreigner or a juristic person which the law treats as foreign, except one prescribed under section 19, which has acquired a condominium unit through inheritance as legitimate heir or legatee of a will or through any other means, as the case may be, shall give written notice to within sixty days from the date of ownership of the condominium unit and shall dispose of that unit within a period of not more than one year from the date of acquiring possession of the unit. If it is not disposed of within such period of time, the provisions of the fourth paragraph of Section 19 shall apply.
If the foreigner does not qualify for ownership under the Condominium Act he must dispose of the unit within 1 year. If the foreigner fails to do so, the Director-General of Land Department shall have the power to sell the condominium unit on the foreigner's behalf (condo inheritance section 19 of the Condominium Act)
Partly foreign owned Thai real estate holding company
More complicated, should a foreign director in a Thai limited die the shares (and thus the assets) and control in the company will not automatically transfer to the heirs. Officially, in a normal company, a general meeting of shareholders must be called and a shareholder decision is needed to appoint a new director. The shares (and the most important position of managing director of the company) of the deceased must be transferred at the Ministry of Commerce, however, without the managing authorized director able to sign on behalf of the company this is less simple. It may be recommended to have more than one director in the company and/ or someone authorized to sign on behalf of the company.
Civil and Commercial Code:
Section 1155: "Any vacancy occurring in the board of directors otherwise than by rotation may be filled up by the directors, but any person appointed so appointed shall retain his office during such time only as the vacating director was entitled to retain the same".
Section 1132 : "In the event of death or bankruptcy of any shareholder another person becomes entitled to a share, the company shall, on surrender of the share certificate when possible, and on proper evidence produced, register such other person as a shareholder".
NOTE Many foreigners, especially prior to 2006, have set up Thai companies to receive ownership of land in Thailand on their behalf. In this case the foreigner is considered legally the principal and actual owner of the shares and assets (chapter 'Agency' in the Civil and Commercial Code). The company and Thai nominee shareholders are considered his agent holding the land (shares) on his behalf. This is is an illegal structure In addition the law clearly states that it is illegal to set up a company for the sole purpose by a foreigner to acquire property, but as the company (different from a normal company) is holding the assets on the foreigner's behalf the company must hand over the assets (real estate) to the heirs of the principal (the deceased foreigner). The nominee shareholders cannot claim ownership over the company's assets and the foreign heirs cannot register ownership but can demand, as the successors of the principal, the transfer of shares and control in the company. If not, the foreign heirs as the actual owners by succession have the right to claim the company assets by legal action, but will have to sell the real estate involving land pursuant the Land Code Act within 1 year from the date of acquisition by inheritance.
Lawyers for Expats Thailand advise against setting up a Thai company to acquire property, unless the company is a legitimate trading company.
Recent events have highlighted that many companies have been illegally set up as tools for foreigners to own property in Thailand and this is being investigated.
If a company has foreign shareholders and owns property it will be subject to scrutiny and possible investigation.
If the company has been set up correctly and the Thai shareholders can prove that the funds were in their account for the 51 per cent and they are genuine shareholders (not nominees) and the company can show income in and out then there is nothing to fear.
Remember foreigners can only own 49 percent of a Thai company so 51 per cent is owned by Thai nationals.
To legally secure your property without circumnavigating the law talk to our property specialist at www.lawyersforexpatsthailand.com for a free consultation.
To make a will for yourself and your wife contact us we are happy to assist you.
We cover all aspects of law and provide solutions for foreigners all over Thailand