For the last one and a half years I’ve been the de-facto executor in an inheritance dispute that ripped apart the fabric of the entire family in a way which would have left the late patriarch of the family horrified. In these series of posts I want to share some lessons I’ve learned and how you can avoid a similar situation.
While you’re still alive, discuss the inheritance and how you intend to have your estate split after you’re gone. Make sure that you have discussions heirs individually and allow them to be completely honest about what their expectations are. Remember that even if one of them is dissatisfied or is harboring a grudge, it is enough to wreak havoc on the rest of your heirs. Also, don’t talk to just the stakeholders, talk to people who know your family. Sometimes informed people who are a bit distant will give you better perspective on what will happen after you pass away.
Heirs are humans too
Even if everyone is getting along now, there’s no guarantee that they won’t be influenced by a third party (such as an in law, mental illness or a mind controlling parasite) in which case all of a sudden that long forgotten incident can turn into a major point of honor, ego, stupidity and greed.
Their inherited genetic material doesn’t make them part of the same hive mind, or at least not several generations down. Let’s face it, your heirs are individuals with different aspirations, values and ideas on what they’re going to do with the windfall you’re leaving them. Tying them up together or relying on their sensibilities to sort things out is a mistake. The best thing to do is to give your heirs the option to split and go their separate ways. If they want to be together, well and good but if they don’t then make sure there is a clearly defined and sensible exit strategy as well. If you penalize the person who’s leaving then they might just stay and bicker endlessly. Don’t make it so that the other heirs have to bribe the difficult party to leave.
If you have substantial assets, it can be advisable to leave your inheritance to a corporate entity controlled by a board of trustees. It is significantly easier and safer to move around and trade in share certificates rather than title deeds and joint ownership proportions and decision making is a somewhat well organized process rather than a free for all in a joint ownership. You can also consider leaving everything to a trust however it is somewhat risky as the law is relatively new in Thailand, the concept little understood and having no precedence you won’t know what will happen under various legal challenges. Incorporating will also protect your heirs from liability that could occur through private ownership.
Thailand is pretty lax in terms of inheritance laws compared to other countries however if you’re careless about whose name you’ve put land in, transfer fees could become an unwelcome surprise. The solution get hold of a good tax lawyer and talk to him now, even while you’re acquiring assets. Tell the lawyer that you’re looking into saving taxes for your heirs and how best this can be achieved. The tax lawyer will help you plan ahead and make sure that your heirs won’t have to liquidate everything you’ve worked for just because you were unaware that you also left them a huge tax bill.
Will and testament
Make a will now, don’t put it off until you have a life threatening illness or feel that you’re starting to grow old. Make sure that it is signed and valid. When you’re thinking about your will make sure that you have a good lawyer to write it up. It is important to make sure that the lawyer specializes in commercial or inheritance issues and especially is not himself a trial lawyer. The reason for this is that trial lawyers specialize in thinking offensively and will probably not serve your best interest in planning for your heir’s future.
Part 2 of my post will be about responsibilities as an executor of someone’s will.
Copyright © 2013. All Rights Reserved.