Integrity Legal

9th May 2009

An odd question came up while I was in the office today. A married couple (one Thai and one non-Thai) was researching Thailand property ownership and after going over the usual information regarding Thai Leases, Thai Mortgages, and uses of Thai Limited Companies for property ownership a more interesting question arose. All of the questions surrounding their prospective property were routine, but then the conversation turned to Thai Wills and what would happen to the Thai Real Estate upon the death of the Thai husband.

Pursuant to sections of Thai law it is illegal for foreigners to own land without the written approval of the Thai Interior Minister. As a practical matter, obtaining written approval from the Interior Minister of Thailand is difficult, if not downright impossible. This brings up a conflict of laws because when a Thai will speaks during the Thai probate proceedings, ownership of property that was owned by a Thai could be passed to a non-Thai. What happens to this property since it is essentially illegal for a non-Thai to own land?

Thai law deals with this issue in a quintessentially Thai way. The law says that the property must be sold within 6 months of the closing of the Estate. In the United States (as well as other common law countries) probate of wills entails the closing of a deceased person’s estate. Generally Judges in common law countries wish to get estates closed as quickly as possible. In Thailand, Thai Judges are not as expeditious in getting wills probated and estates closed. The upshot is that estates will stay open for years and in some cases decades.

The practical implication of this failure on the part of Thai probate courts to quickly close estates creates a situation in which a foreigner in Thailand can maintain de facto ownership and control of an inherited piece of real estate provided the estate stays open. Should the de facto owner decide to sell the property, then all he or she would need to do is close the estate, legally inherit the property, and execute a sale. This process is probably more complicated than this and a possibility always exist that a court would close the estate quickly, but at present this does not appear to be the case.

(Please Note: Nothing written herein should be used in any way as a substitute for personalized legal advice from a licensed attorney. No lawyer-client privilege or relationship is executed between reader and author of this piece.)


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