Issues for Inheritance

Anything and everything about Thailand
User avatar
mahjongguy
Posts: 753
Joined: Thu Aug 05, 2010 1:07 pm
Has thanked: 19 times
Been thanked: 54 times

Re: Issues for Inheritance

Post by mahjongguy »

I wanted my partner to inherit my IRA, to avoid the big tax bracket and also to provide him with the diversity of holding some US stocks.

But, the result would be him hooked up with the IRS for the rest of his life. Whether or not his US inheritance was encased in a trust, he would be heavily burdened even if he was able to hire a decent accountant/lawyer/broker.

So, for more than a decade I have been draining the IRA, slowly getting it to a level where shutting it down all at once won't trigger crazy taxes.

RichLB
Posts: 1176
Joined: Sat Jul 31, 2010 4:13 pm
Has thanked: 2 times
Been thanked: 76 times

Re: Issues for Inheritance

Post by RichLB »

I was told (by several guys and by my account manager) that an IRA can not be included in a trust. BUT, it is possible to designate a beneficiary for an IRA and this successfully avoids probate. The issue appears to be how a Thai citizen can get the money out of the US. I'm exploring the possibility of my partner opening a bank account in the US (or with a global bank), and having inherited funds (life insurance, Transfer on Death monies, and IRA) deposited in that bank and then withdrawn from here in Thailand. I don't know if that will work, but after I talk to a local lawyer I'll let users here know.

User avatar
Gaybutton
Posts: 18687
Joined: Sat Jul 31, 2010 11:21 am
Location: Thailand
Has thanked: 2 times
Been thanked: 1004 times

Re: Issues for Inheritance

Post by Gaybutton »

RichLB wrote:
Fri Jun 25, 2021 9:38 am
I'm exploring the possibility of my partner opening a bank account in the US (or with a global bank)
Why not go with TransferWise, which recently shortened its name to Wise? That is probably the best. If you have any questions their support staff responds quickly, usually the same day.

https://wise.com

User avatar
2lz2p
Posts: 815
Joined: Sun Aug 01, 2010 8:08 am
Location: Pattaya, Thailand (Jomtien)
Has thanked: 130 times
Been thanked: 87 times

Re: Issues for Inheritance

Post by 2lz2p »

Gaybutton wrote:
Fri Jun 25, 2021 10:21 am
RichLB wrote:
Fri Jun 25, 2021 9:38 am
I'm exploring the possibility of my partner opening a bank account in the US (or with a global bank)
Why not go with TransferWise, which recently shortened its name to Wise? That is probably the best. If you have any questions their support staff responds quickly, usually the same day.

https://wise.com
I agree with GB - definitely should look into Wise. You can create a virtual account which will have an ACH number (US banking system). Funds transferred to that ACH number are held in the Wise "account" and can then be transferred into a Thai bank in baht. Wise offers a fairly good exchange rate.

I don't use their "account" and transfer my funds by Wise withdrawing from my US bank account (ACH system) and sending to Bangkok Bank. But, I know of others who have set up the Wise "account" so that their Social Security direct deposit can be put in that account to be transferred to their Thai bank whenever they choose.

User avatar
Bob
Posts: 1045
Joined: Sat Jul 31, 2010 11:03 pm
Been thanked: 36 times

Re: Issues for Inheritance

Post by Bob »

RichLB wrote:
Fri Jun 25, 2021 9:38 am
I was told (by several guys and by my account manager) that an IRA can not be included in a trust. BUT, it is possible to designate a beneficiary for an IRA and this successfully avoids probate. The issue appears to be how a Thai citizen can get the money out of the US. I'm exploring the possibility of my partner opening a bank account in the US (or with a global bank), and having inherited funds (life insurance, Transfer on Death monies, and IRA) deposited in that bank and then withdrawn from here in Thailand. I don't know if that will work, but after I talk to a local lawyer I'll let users here know.
Yes, you can make your revocable living trust the beneficary of an IRA, life insurance, etc.; however, doing so would be a mistake absent one's intention to use the trust to control the funds and to pay the funds out over a period of time/years. Presuming you would be using a revocable living trust simply to only avoid probate (and necessarily to cause a faster distribution of assets), it would be unwise to name your trust as a beneficiary of anything.

Since I don't have the Thai bf as a beneficiary of my IRA's, I've never looked into whether my accounts holder (Fidelity) can simply wire the funds directly to the bf's bank account here in Thailand; however, if that's possible, that's the only way I'd do it to avoid various issues (hassle to get funds transferred, possible lousy currency conversion rates, transfer fees, having the bf report US interest earned on that account, etc.).

RichLB
Posts: 1176
Joined: Sat Jul 31, 2010 4:13 pm
Has thanked: 2 times
Been thanked: 76 times

Re: Issues for Inheritance

Post by RichLB »

Bob wrote:
Sun Jun 27, 2021 10:12 pm

Yes, you can make your revocable living trust the beneficary of an IRA, life insurance, etc.; however, doing so would be a mistake absent one's intention to use the trust to control the funds and to pay the funds out over a period of time/years. Presuming you would be using a revocable living trust simply to only avoid probate (and necessarily to cause a faster distribution of assets), it would be unwise to name your trust as a beneficiary of anything.
Thanks so much for your help. You've said it would be a mistake to make a Revocable Trust the beneficiary of anything. I'm not clear why it would be a mistake. I was thinking that establishing a Revocable Trust. placing assets within that trust. and making my Thai boyfriend the beneficiary would be wise, but you suggest I am in error. What am I missing?

User avatar
Bob
Posts: 1045
Joined: Sat Jul 31, 2010 11:03 pm
Been thanked: 36 times

Re: Issues for Inheritance

Post by Bob »

Again, presuming your intent is to minimize the process to transfer assets to your beneficiary, then making your trust the beneficiary of assets such as life insurance or an IRA just adds a layer to the process. Would note:

(1) With life insurance, all one needs to do is fill out some form and provide a death certificate and the monies are paid to the named beneficiary.

(2) Inheriting an IRA is a bit more complicated as noted above (but once your bf sets up a separate inherited IRA account...which requires signing some forms....and providing a death certificate, you're basically done). Your bf than would have the power to direct that all remaining monies be paid to him immediately (which may not be wise, tax-wise) or to simply take a RMD (required minimum distribution) based on his age or, perhaps, a different/fixed amount each year.

(3) With a revocable living trust, technically assets are generally not to be distributed in full for 4 months (rules vary by states) after publishing a Notice to Creditors. As long as the successor trustee knows for sure that there are no debts out there (however, don't forget that final tax returns need be filed and any tax be paid), the successor trustee can distribute immediately per the terms of one's revocable living trust (upon death of the settlor, it's actually just a fixed trust).

(4) Making your trust the beneficiary of life insurance, for example, would result in the life insurance company having to receive a signed form by your successor trustee, a copy of the trust, and death certificate....and then the life insurance proceeds would be paid directly to your trust. After that, the successor trustee could then distribute to himself. But, as you see, it just adds a needless layer and more paperwork.

(5) Trusts too are used at times to hold and distribute money over time. For example, if an intended beneficiary is mentally handicapped or simply extremely stupid about handling money, the trust could be set up to last a number of years (or even the lifetime of the beneficiary) while some trustee (a bank perhaps?) doles out money as reasonably needed by the beneficiary or as the settlor has directed in the trust.

P.S. I actually don't know for sure if a trust can be the beneficiary of an inherited IRA (never thought about it or asked the question as I've never thought it was a reasonable idea to do that).

werner99
Posts: 146
Joined: Tue May 21, 2019 1:27 pm
Has thanked: 93 times
Been thanked: 17 times

Re: Issues for Inheritance

Post by werner99 »

I wish you well as you deal with inheritance issues.

I would like to reiterate the suggestion of another member. Get married to your partner, if you have not already done so. Marriage will facilitate a lot of matters.

I believe that you could do such at the American Embassy. (Perhaps Forum members who are American could comment on this.)

User avatar
Gaybutton
Posts: 18687
Joined: Sat Jul 31, 2010 11:21 am
Location: Thailand
Has thanked: 2 times
Been thanked: 1004 times

Re: Issues for Inheritance

Post by Gaybutton »

werner99 wrote:
Tue Jul 06, 2021 6:19 pm
(Perhaps Forum members who are American could comment on this.)
Thailand does not legally recognize same sex marriage, but same sex civil partnerships are legal. This is not a matter for the embassy. This is a matter for use of a Thai attorney. I cannot comment on what issues such a civil partnership would resolve and what issues it might create under Thai law.

werner99
Posts: 146
Joined: Tue May 21, 2019 1:27 pm
Has thanked: 93 times
Been thanked: 17 times

Re: Issues for Inheritance

Post by werner99 »

I realize that Thailand does NOT recognize same-sex marriage, but the US now does. It is my understanding that a gay American citizen can register himself/herself at the Embassy as married to a foreign national of the same sex, even If the country of the partner or the country in which they reside does not recognize same-sex marriages. The American Embassy, and other embassies as well, do get involved in various ways when a citizen dies. A person recogized as a husband by the Embassy, has more power and status than a partner.

I knew a gay couple--an American and a Japanese. Japan does NOT recognize same sex marriage. But the couple were married in the US, and the marriage was registered at the American Embassy in Tokyo, Japan where the couple resided.
The American guy suddenly died of a heart attack. The formal marriage helped the Japanese partner to deal with all sorts of issues at the American Embassy and in the US.

Post Reply