This post is an extract of my book “how to safely buy real estate in Thailand” which can be found on Amazon or Itune. Most people who purchase offshore real estate are in their 40s or older at the time of the purchase. They already own real assets in their home country and, as a result, most buyers of offshore real estate already have a will and don’t feel the need to make a new will in relation to their offshore assets. The truth is that you don’t always need a will when purchasing assets offshore, but you may need one in certain cases. Therefore, the next issue is how to determine when a person who owns overseas assets needs a will.
In the matter of succession, the most important thing is to determine the laws applicable to the devolution of the succession, because these laws will determine:
The capacity of a person to affect the devolution.
- The form of the will.
- The capacity of the heirs to inherit.
- The rights of the heirs.
- The minimum portion of the estate to be distributed among the legal heirs of first rank (if any).
- The portion of the estate that may be freely disposed of by the testator.
There are as many rules for succession as there are countries, so the ability to determine in advance what rules will be applicable to the devolution of assets located outside your home country is of utmost importance.
It is a generally accepted principle of international private law that the transfer or devolution of immovable property takes place in accordance with the law of the country where the property is located (“situs” law). On the other hand, the transfer or devolution of movable property passes in accordance with the law of the deceased person’s domicile at the time of death.
Therefore, the laws applying to the devolution of a real estate asset owned overseas will depend entirely upon the method of ownership. If the testator personally owns the immovable property, then the object of the succession is the immovable property itself. If the testator does not directly own the property, but has purchased it through a company for which he owns the shares, then the object of the succession is not the immovable property, but the shares of the company owning the property.
Note that, for the time being, there are no succession taxes inThailandper se. In case of a succession that results in the transfer of an immovable property, the heir will have to pay the usual transfer taxes and fees at the Land Department.
Please see the table below to help you decide whether or not you need a will inThailand.
|TABLE 25: CRITERIA TO DETERMINE IF YOU NEED A WILL IN THAILAND|
Object of the succession
|Law applicable to the devolution of the succession||Do you need a second will in the country were the asset is located?|
The law of the situation of the immovable property.
If an individual directly owns an immovable asset in a foreign country, a second will is the safest thing to do.
Shares of a company
|The law of the deceased person’s domicile at the time of death.
You do not need a second will if you only own shares in a company that owns offshore real estate.
©Rene Philippe & Partners Ltd.
If you ever move overseas, please do not forget to name a contact person in your new country of residence and give instructions to this person about what to do in the event of your sudden demise. It isn’t uncommon for people who move overseas to lose contact with their families in their home country and families are often unaware of the death of their relatives.
I once heard the story of a Swiss citizen who owned a condominium in Bangkok and died in Thailand. At the time of his death, he was living with a Thai girlfriend. He was not married to her. Upon his death, however, she filed a claim based on her status of “common law wife”.By the time the Swiss citizen’s family finally learnt of his demise, the Court had already ruled in favor of the girlfriend. She was awarded the ownership of the condominium unit and, by the time the family acted, the condominium had long been sold. Therefore, if you have loose ties with your family, you need to have a contact person located in your country of residence who can inform your family in the case of death.
 Many countries have a mandatory reserve, i.e. the minimum mandatory share of an estate that must be transmitted to primary heirs, such as spouses and children.
 Testator is a person who made a will or a person who dies having made a will
Originally posted 2012-05-30 15:47:10.