SUCCESSION AND ESTATE PLANNING IN THAILAND

What are the general rules on succession in Thailand?

The general rules are prescribed in the Civil and Commercial Code, and the practical outcome with
respect to estate distribution is mostly contingent upon whether or not the deceased left a valid will
or died without leaving a will (intestate).

What is the position where the deceased does not leave a will?

The Civil and Commercial Code provides that in circumstances where no will is provided (or a
will is provided but held invalid), an estate is distributed among what are called ‘statutory heirs.’
There are six classes of statutory heirs and each class is entitled to inherit in the following order
of preference:

• Descendants

• Parents

• Brothers and sisters of full blood

• Brothers and sisters of half blood

• Grandparents

• Uncles and Aunts

No heir in any lower class is entitled to inherit in the event an heir of any higher class survives.
However, a spouse is treated as a special class entitled to inherit in a proportion that varies between
an equal and a full share of any estate dependent upon the existence of the remaining surviving
classes in any particular circumstance.

What is the position where the deceased does leave a will?

In circumstances where the deceased left a valid will, an estate will generally devolve on the named
beneficiary or beneficiaries. The most straightforward form of will is a simple will where two
witnesses are required to be present when the will is executed. This is the type of will we generally
recommend to our clients to ensure their wishes are carried out.

In order to be valid, a will primarily must be made by a testator who is:

• A natural person (as opposed to a juristic person)

• Not acting under the effects of mistake, duress, or fraud

• 15 years or older

• Not incompetent or of unsound mind

What is the legal process with respect to estate distribution in Thailand?

Irrespective of whether or not a deceased left a valid will or died without leaving a will, an estate
administrator will need to be appointed by the Thai court in order to practically distribute an estate
of any significant value.

A petition is filed with the provincial court having jurisdiction over the area the deceased was
domiciled at the time of death. The petition must be filed by an heir, an ‘interested party’ (e.g., a
nominated administrator or a creditor), or by a public prosecutor.

Following the filing of a petition, the court will set a date for the hearing of evidence by the
petitioner and, if satisfied, will render an order allowing the petitioner to administer the estate
either in accordance with the deceased’s wishes or, in the absence of a valid will, in accordance
with the statutory rules above. The process generally takes approximately 90 - 120 days from the
date of filing the petition but can take significantly longer if contested.

What practical considerations need to be taken into account when planning the distribution of
an estate in Thailand?

As in many other jurisdictions, the manner in which an estate is ultimately distributed in the
absence of a valid will may be undesirable or even contrary to the wishes of a potential testator. In
the event our clients own property in Thailand, our advice is always to ensure the proper draft and
execution of a will that accords with Thai law, specifically in relation to that property.

This is not only to ensure the estate is distributed in accordance with the client’s wishes but to
avoid any issues with validity or enforceability in the Thai court, which plays a significant role in
the distribution of any valuable estate. Any property held outside Thailand should generally be
dealt with in a separate will that complies with the rules of the jurisdiction in which it is located.

Other important considerations that should be taken into account include:

• The provision of trusts, which are not enforceable as a matter of Thai law and are a common
source of issues when attempting to enforce provisions of wills drafted in accordance with
the rules of a foreign jurisdiction.

• The identity of an executor or administrator whose role should be made explicit in any Thai
will. The expectations and obligations of the role should be made clear to any executor in
advance, particularly if they do not reside in Thailand, since they will need to physically
attend the Thai court. The naming of a substitute executor is also good practice.

• While a Thai will does not need to be written in Thai to be valid, it will need to be
professionally translated and officially certified before it is submitted to a court along with
any petition to appoint an administrator. With this in mind, we draft and execute Thai wills
for our clients simultaneously in Thai and English.
Is there any inheritance tax in Thailand?

The Inheritance Tax Act B.E. 2558 (2015) provides that the following persons are subject to
inheritance tax:

• Thai natural persons

• Non-Thai natural persons domiciled in Thailand

• Non-Thai natural persons inheriting an asset(s) located in Thailand

• Juristic persons (companies) registered in Thailand which are majority Thai owned or
managed

There are important exemptions from the Act, the most significant being the following:

• Inheritance that does not exceed 100 million Thai Baht in value

• Being a legal spouse of the deceased

• Being a recipient of an inheritance where the deceased passed away before the enforcement
of the Inheritance Tax Act (1st February 2016)

In the event the value of an inheritance exceeds the threshold of 100 million Thai Baht, only that
part that exceeds the threshold will be subject to inheritance tax. The rates are as follows:

• 5% for parents and descendants

• 10% for all other beneficiaries

The following assets are subject to inheritance tax:

• Immovable property

• Securities as defined by the law on securities and exchange

• Deposits or any other monies with the same characteristics capable of being withdrawn or
claimed from a financial institution or person who has received such monies

• Registered vehicles

• Financial assets prescribed by Royal Decrees

It should be noted that even in the event an estate is not subject to inheritance tax, there may be
other tax issues that need to be addressed, particularly with regard to the sale of assets and the
transfer of funds out of Thailand.
Conclusion

Succession and estate planning in Thailand is a potentially difficult and complex space, especially
when there are multiple legal jurisdictions and foreign persons or other legal entities involved.
Our lawyers have years of practical experience in dealing with precisely these kinds of issues and
providing clients with expert advice and guidance. Please contact the LAFS property practice at
info@lafs-legal.com if you need assistance with any of the following:
• Estate planning or the draft and execution of wills in accordance with Thai law

• Assistance with the estate of a relative who has passed away in Thailand

• Applying to the Thai court for the appointment of an administrator or executor (a process
sometimes referred to as a grant of letters or probate in foreign jurisdictions)

• The conduct of those applications, including the preparation of an applicant to give

evidence at any hearing

• Contested wills or challenges to the administration or distribution of an estate

• Assistance in dealing with banks, the land office, or other institutions during the
distribution of an estate

• The preparation of estate accounts and the practicalities of the distribution of an estate to
beneficiaries

• Advice on inheritance tax issues or any other tax issues related to the distribution of an
estate and the transfer of proceeds outside Thailand