The phrase "what's mine, is yours" is often used by newly-weds to describe their attitude towards property in the marriage. These aren't just idle words; marriage creates property rights. Exhibit A: Rupert Murdoch's US$1.7 billion divorce settlement with his second wife Anna Murdoch Mann and his only slightly less jaw-dropping divorce settlement with his third wife.
Wedding ceremony
Under Thai law, marital assets are known as sin somros while personal property, which is not subject to division upon dissolution of the marriage, is referred to as sin suan tua. Typical divorce settlements in Thailand require sin somros to be divided equally between the man and the woman.
Sin suan tua is property which is exclusively owned by only one of the spouses. The owner of the sin suan tua property is free to dispose of it without having to account to the other spouse. Under the Civil and Commercial Code (CCC), property comprising the sin suan tua of a spouse consists of: (i) property belonging to the spouse before marriage; (ii) property for personal use, dress or ornaments suitable for the spouse's station in life, or tools necessary for carrying on the profession of the spouse; (iii) property acquired by the spouse during marriage through a will or gift if that property was intended to be sin suan tua; and (iv) the khongman (a betrothal gift).
The married couple's rights to the sin somros property are set out in the CCC. Property comprising sin somros includes: (i) property acquired during marriage; (ii) property acquired by either spouse during marriage through a will or gift made in writing if it is declared by such will or document of gift to be sin somros; and (iii) the fruits of sin suan tua (eg the rental derived from a personal piece of property). Interestingly, a gift presented to the couple upon their marriage can be expressly designated by the donor as either sin somros or sin suan tua. That must lead to some awkward moments. If there is doubt as to the donor's intention, the law presumes that the property is sin somros.
It is interesting to note that if the husband and wife, prior to marriage, invest in a business, the investment property is sin suan tua in the proportion of investment contributed by both parties. Supreme Court case No 4650/2545 confirmed this principle but noted that after marriage, the revenue earned from such business is sin somros as it falls under the category of "fruits of sin suan tua".
The distribution of marital assets is governed by CCC, though these rules will be overridden by contrary provisions in a prenuptial agreement (also known as an ante-nuptial agreement). These days it is common to see a couple enter into a prenuptial agreement, especially where the groom is of foreign descent.
Prenuptial agreements are legal binding agreements entered into between the prospective partners prior to the registration of their marriage. Sometimes considered to be a death knell for romance, the agreement prescribes rules regarding the ownership and distribution of personal and marital properties upon dissolution of the marriage. Under the CCC, for a prenuptial agreement to be binding it is to be (i) in writing; (ii) signed by at least two witnesses; and (iii) entered into the marriage register at the time of registering the marriage in a district office.
Marital debts are treated in a similar manner to marital assets, in that the debts and obligations owed personally by one spouse are satisfied using property which is sin suan tua to the debtor spouse. However, if the assets comprising the debtor spouse's sin suan tua are insufficient, then the creditor is permitted to recover the differential from sin somros property. Marital debts are those debts which both spouses are jointly liable to perform; such debts are typically satisfied out of the sin somros and sin suan tua of both spouses. Under the CCC, typical marital debts are: (i) debts incurred in connection with the management of household affairs and providing for the necessaries of the family, or maintenance and medical expenses of the household and for proper education of the children; (ii) debts incurred in connection with the sin somros; (iii) debts incurred in connection with a business carried on by the spouses in common; and (iv) debts incurred by either spouse only for his or her own benefit but ratified by the other.
In divorce proceedings, once the division of the sin somros is effected by order of the Juvenile and Family Court, the property allocated becomes the sin suan tua of each spouse respectively. If the couple receives property declared to be sin somros after the initial division of marital assets, that property will be equally distributed between the spouses. Marital property is a contentious issue before, during and at the end of a marriage.
Thai law does a reasonable job of providing for the fair and equal distribution of assets in the event of a divorce, but results that were unintended can occur. Particularly if there is a disparity in the assets (current or to be inherited) of the couple-to-be, consider achieving certainty from the outset by doing the unpleasant work early; get a prenup. n
Angus Mitchell (angus.mitchell@dfdl.com),
Thunyaporn Chartisathian
(Thunyaporn@dfdl.com) and
Kunal Sachdev (kunal@dfdl.com).