I have been appointed to manage the finances of my late father. My intention is to withdraw all the cash, close all the accounts and put everything into my mother's name. What sort of tax liability might this entail?
So far, we've counted my father's assets as 10 million baht in deposits, five rai of land in Chiang Mai, 1 million baht in the Government Savings Bank lottery and some stocks. Please advise.
_ Anonymous
ANSWER BY... Teera Phutrakul, CFP, Chairman, TFPA I am assuming your father had a will, and in that will you are named as the executor of the estate, which gives you full authority to manage your father's assets as you see fit. Dying without a will can be quite complicated _ you would need to get a court order to appoint an executor, and under Thai law you would have to place an ad in the newspapers to see if anyone wanted to contest the will.
Depending on how rich or famous the deceased was, this is the time when the situation could easily spin out of control. The technical term for this is the probate period _ the process of legally establishing the validity of a will before a judicial authority. Apparently, the fight over the estate of Howard Hughes, the eccentric and reclusive American billionaire, dragged on for more than 10 years after his death.
Bank and brokerage accounts are quite easy to deal with. Consolidating them into your mother's name also makes sense, assuming that was your father's wish. But make sure you are thorough with the paperwork. Some people can be quite disorganised without proper record keeping, which makes it hard for the survivors to sift through the documents.
Luckily, Thailand does not have inheritance tax _ or at least not yet anyway _ so all the proceeds endowed to the beneficiaries are tax-exempt. Land title deeds, on the other hand, are a bit more complicated.
You need to go to the Lands Department to change the name of the title holder(s). The tax liability on the sale of that piece of land in Chiang Mai will depend on the holding period of the new title holder.
I am 57 years old with a monthly income of 70,000 baht and 4 million in savings. I plan to work until 65. Until retirement, should I put the maximum annual contribution in my savings account or invest it?
_ Anan
ANSWER BY... Teera Phutrakul, CFP, Chairman, TFPA Eight years to go before retirement at the age of 65 does not seem that long, but if you take into account that you may live until the age of 90, then your investment horizon is actually quite long at 33 years (8+25).
Usually, the longer the investment horizon, the more risk one can afford to take. Therefore, I would suggest you get going on the 4 million baht in savings you already have. Assuming you can achieve a 10% compound annualised return, you can almost double your savings in eight years by the retirement age of 65 and triple it to 12 million by your 70th birthday.
Compounding is extremely powerful, but you need to have the discipline to invest for the long term. Savings accounts and bonds will not give you 10%, so you need to rely on equities, real estate and commodities. As long as your portfolio is sufficiently diversified and you invest on a regular basis by dollar-cost averaging, you should be able to retire quite comfortably.
I owe a 1.5-million-baht mortgage on a house I rented out before last year's floods. Now its market price is falling short of the remaining debt by 200,000 baht, as it located in an area that was flooded. If I keep it, I'll spend a lot to renovate. Should I make short sale?
_ Jiraporn
ANSWER BY... Teera Phutrakul, CFP, Chairman, TFPA You have my sympathy. Thailand is one of those places where anything can happen and usually does. If your house is located in one of those "flood corridors" that were declared by the government, then you are up the creek (excuse the pun), as you are unlikely to obtain insurance.
But if your house is located outside the declared corridors, then it may be worthwhile to renovate. Moreover, a damaged house is almost as good as junk, and you are not likely to find any buyers.
The Thai Financial Planners Association is the certified financial planner (CFP) trademark licensing authority in Thailand. It is a self-regulated, non-profit group of financial advisers and experts from various organisations set up to give advice to investors. Questions can be submitted to them through wealthcare@bangkokpost.co.th or posted at TFPA's webboard at www.tfpa.or.th