I am a Thai citizen working in Singapore as a permanent resident. My questions are related to my assets: houses in the US, shares in a private company owning land in Cambodia, a townhouse in Bangkok, and condos in Bangkok.
1. What would happen if I become a Singaporean citizen? Keep in mind that Singapore does not allow dual citizenship.
2. Would a simple will (in English) be enough to cover all mentioned assets?
ANSWERED BY... Teera Phutrakul, CFP, Chairman, TFPA It looks like everybody is turning Singaporean these days. Eduardo Saverin, one of the co-founders of Facebook, gave up his US citizenship for a Singaporean one soon after the IPO of the company, supposedly to avoid paying US taxes.
But in your case, it's a bit more complicated since you have properties in three places: the US, Thailand and Cambodia. The condo and townhouse in Bangkok should not be a problem since you were a Thai citizen when you first bought these properties. But if you want to buy more properties in Thailand in the future, you will be treated as a foreigner and can only buy a maximum of one rai for personal and commercial use, 10 rai for agricultural purposes and 0.5 rai per family for a cemetery.
As for your homes in the US, there are no restrictions about foreign ownership but there is lots of paperwork to be filled out, and you need to file a tax return when a property is sold in addition to paying federal and state capital gains taxes. I am not an expert on Cambodian foreign ownership law so you need to seek advice from another source.
People like you with assets being managed or held across different countries face financial issues that require skilful management and regular monitoring. This is especially true when you begin to develop a plan for the orderly transfer of wealth to the next generation.
A well-crafted estate plan often relieves anxiety among family members and business partners alike. It can also help a business owner liquidate a business or transfer business assets in an organised fashion.
The most effective wealth structure is not built by simply stacking assets together; it is based on establishing a strong framework to manage all of the different aspects of your financial situation, including:
- a long-term plan for investing, borrowing and cash management;
- an estate plan for preserving and distributing investments, real estate and personal property;
- protecting assets through tax minimisation, where appropriate;
- preserving the integrity and confidentiality of personal information.
What's the best way to save my emergency funds? I'm currently putting them in my savings account. What are my other options in Thailand? Thanks.
_ Maria Gay C. Carrillo
ANSWERED BY... Teera Phutrakul, CFP, Chairman, TFPA Most financial planners recommend people have at least six months' worth of living expenses saved up in a emergency or rainy-day fund. That money should be easily accessible, such as in a savings account. Another option is to look at money-market funds.
The interest rates on both vehicles are equally low, but I would not worry too much about it since the main aim here is easy access to funds, not the return.
The good news is that you are doing the right thing. According to a recent survey by Bankrate.com, 24% of Americans have no emergency savings whatsoever. Moreover, younger respondents in the survey in the 18-29 age group were in particularly bad shape. Some 35% of this group reported having no emergency savings at all, while 28% had less than three months' worth for emergency expenses.
I bought a life insurance policy seven years ago. As it is a condition of the policy, my insurance broker called last year asking if I would like to get a partial refund plus a return since I had met the first seven-year term, or would I like to keep it put until the policy expires in 21 years. I chose to take the partial payment. Do I have to declare that as income on my tax return?
ANSWERED BY... Teera Phutrakul, CFP, Chairman, TFPA The short answer is no you don't. Payments from insurance policies are tax-exempt.
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 firstname.lastname@example.org or posted at the TFPA web board at www.tfpa.or.th
About the author
Writer: Thai Financial Planners Association