Guide to protecting your assets in International estate planning

Understanding thai laws on succession and the role of domicile

In the realm of international succession involving Thailand, the foundational question is: Which sovereign law governs the devolution of the estate? Under the Thai Act on Conflict of Laws, B.E. 2481, Section 37 explicitly states that “succession as far as it concerns movable property is governed by the law of the domicile of the deceased at the time of his death.” Conversely, Section 38 mandates that “succession as far as it concerns immovable property is governed by the law of the place where such property is situated.” This creates a ‘scission’ in the estate. A foreigner living in Bangkok might find their bank accounts governed by Thai law. However, their property in London will be subject to English law. 

This jurisdictional split is further complicated by the legal doctrine of Renvoi, under Section 4 of the Conflict of Laws Act. If Thai law refers a matter to a foreign law, but that foreign law refers it back to Thailand (especially for real estate), Thai courts will apply Thai internal law to settle the succession, a critical nuance for practitioners managing ‘situs’ conflicts. 

In international estate planning, understanding domicile is crucial for managing cross-border assets. For example, a foreign national who maintains their domicile in the UK while living in Thailand ensures that their UK assets are governed by UK law, while Thai property would be subject to Thai law. Unlike “residency,” domicile requires both physical presence and an intent to remain indefinitely. For example, a British expatriate living in Thailand may choose to keep their domicile in the UK. This ensures that their UK assets, like real estate and bank accounts, are governed by UK law, while their Thai property is subject to Thai law. However, Thai courts will strictly apply Thai Civil and Commercial Code (TCCC) provisions to any property located within the Kingdom. Our firm emphasizes that a “Multi-Jurisdictional Will” strategy is often the only way to reconcile these divergent rules, ensuring that the lex situs of each asset is respected without triggering involuntary intestacy.

Comparing probate processes: common law vs. thai law

For clients with assets in Common Law jurisdictions (such as the US, UK, or Australia), the “Probate” process is a mandatory legal hurdle. Probate involves a court-supervised process to validate a will and appoint an executor. For clients engaged in international estate planning, this difference between probate systems is critical. A foreigner with assets in both Thailand and the U.S. may need to initiate probate proceedings in both countries, which can delay the transfer of assets unless the estate planning documents are coordinated across jurisdictions. For expatriates with assets in multiple countries, international estate planning ensures that both the Thai process and foreign probate systems work in harmony. This coordination minimizes delays in asset distribution.

Furthermore, Thailand’s TCCC provides a strict hierarchy of statutory heirs (Section 1629). While Thailand offers more testamentary freedom than “forced heirship” countries, a will must still be executed in strict accordance with Thai formalities—such as the “Will made before a public officer” or a “Holographic Will”—to be enforceable. Adherence to Sections 1656 to 1660 of the TCCC is non-negotiable; for instance, a ‘Will made before a public officer’ offers the highest level of security against authenticity challenges, whereas a ‘Holographic Will’ (Section 1657) must be entirely handwritten, dated, and signed by the testator to avoid absolute nullity. If a foreigner dies in Thailand without a Thai-compliant will, their Thai assets will be distributed among the six classes of statutory heirs, which may include relatives they intended to exclude. Bridging this gap requires “Mirror Wills”: separate documents for each country that are carefully cross-referenced to ensure they do not accidentally revoke one another, a common pitfall in international planning.

Optimizing taxes in cross-border estate planning

The legal devolution of property is often overshadowed by the fiscal consequences of death. Under the Inheritance Tax Act B.E. 2558, a tax rate of 5% (for ascendants/descendants) or 10% (for others) is levied only on the portion of the value of the inherited property exceeding 100 million Baht per beneficiary, making strategic distribution among multiple heirs a primary tool for fiscal mitigation. While this threshold is relatively high, the challenge for international clients is “Double Taxation.” For example, an American expatriate with assets in both the U.S. and Thailand may face double taxation: U.S. Federal Estate Tax on global assets and Thai inheritance tax on assets in Thailand. Strategic international estate planning using tax treaties can help offset this double taxation. Strategic planning through tax treaties can minimize this risk, ensuring that taxes paid in one jurisdiction are credited in another. Unlike income tax, there are fewer Estate Tax Treaties globally to mitigate this overlap.

Strategic planning involves the “Step-up in Basis” and the use of lifetime gifting. Under the Thai Gift Tax rules, gifts to descendants are exempt up to 20 million Baht per year. By strategically reducing the “on-paper” value of the Thai estate before death, a client can significantly lower the final inheritance tax burden. Furthermore, for assets located in high-tax jurisdictions like the UK or Japan, we analyze the use of Bilateral Tax Treaties to ensure that taxes paid in one jurisdiction are creditable in another. Modern estate planning requires “fiscal transparency,” meaning all international structures must be reported under the Common Reporting Standard (CRS), which Thailand has actively adopted to share financial information with over 100 other jurisdictions.