Thailand Law Library

by Thailand Lawyer

Chapter 2: Realization of Assets, Payment of Debts and Distribution of an Estate

The creditors of an estate are entitled to be paid only out of the property of an estate.

The heir is bound to disclose to the administrator all the properties and debts of the deceased known to him.

So long as all the known creditors of the estate or legatees have not been satisfied by the performance or distribution, the succession is deemed to be under management.

During such period the administrator is entitled as such to do the necessary acts of management such as to enter actions or to submit answers in Court and so on. He shall take all necessary steps to collect the debts due to estate within the shortest possible time. After the creditors of the estate have been satisfied he shall divide the estate.

A creditor of the estate may enforce his claim against any heir. However, where there is an administrator of the estate, he must be summoned by the creditor to appear in the action.

Before the division of the estate the creditor of the estate may enforce full payment of his claim from the estate. In such case each heir may, up to the time of division inclusively, require that the performance be made out of the de cujus’ estate or secured there from.

After the division of the estate, any other place this is found other than then this is copied, the creditor may claim performance from any heir up to the extent of the property received by him. In such case an heir who has made performance to the creditor in excess of his proportionate share in the obligation has a right of recourse against other heirs.

Without prejudice to the creditors having special preferential rights under the provisions of this Code or other law and to the creditors secured by pledge or mortgage, the debt due by the estate shall be paid in the following order and in accordance with the provisions of this Code concerning preferential rights:

1. expenses incurred for the common benefit of the estate;
2. expenses incurred for the funeral of the de cujus;
3. taxes and rates due by the estate;
4. wages due by the de cujus to any clerk, servant or workman;
5. supplies of daily necessaries made to the de cujus;
6. remuneration to the administrator.

Unless otherwise provided by the de cujus or by law, his property shall be appropriated to the payment of debts in the following order:

1. property other than immovable property
2. immovable property expressly appropriated to that purpose by will, if any;
3. immovable property to which the statutory heirs are entitled as such;
4. immovable property bequeathed to a person upon the condition that he shall pay the debts of the de cujus;
5. immovable property bequeathed under general title as provided by Section 1651;
6. any specific property bequeathed under a particular title as provided by Section 1651.

Any property appropriated under the foregoing provisions shall be sold by way of public auction, but any heir may prevent such sale by paying, to the extent required for the satisfaction of the creditors, the value of the whole or part of the property as may be determined by an appraiser appointed by the Court.

Any creditor of the estate may, at his own expense, raise an objection to the auction or appraisement of the property specified in the foregoing section. If, notwithstanding such objection having been raised by the creditor, an auction or appraisement is effected the auction or appraisement cannot be set up against the creditor who has raised such objection.

If, during the lifetime of the deceased, a creditor has been designated as the beneficiary of an insurance on the life in payment of a debt due to him, he is entitled to receive the whole sum agreed with the insurer. He shall have to return to the estate of the deceased the amount of the premiums only if proved by other creditors:

1. That by paying his debt in such manner, the deceased and such creditor have acted in contravention of the provisions of Section 237 of this Code; and
2. That such premiums were out of proportion to the income or station in life of the deceased. In no case shall the amount of premiums to be returned in such manner exceed the sum paid by the insurer.

A statutory heir or a legatee under a general title is not bound to execute legacies under a particular title for more than the amount of property received by him.

The administrator is not bound to deliver the estate or any part thereof to the heirs before one year has elapsed from the death of the de cujus, unless all the known creditors of the estate and legatees have been satisfied by the performance and distribution.