Incapacity in Thailand: who manages a sick parent's assets?

Dementia, stroke or an accident leaves many older people unable to look after their own property. The legal problem starts at once, because the bank accounts, land and shares are still in the patient's name. Thai law does not give children power over a parent's property simply because they are family or are providing care. Only a person appointed by the court can act.

Families with substantial assets, or where the patient is a company director, feel the effects fastest. Hospital bills arrive every month, the company needs someone to sign, and while nobody has been appointed, property can be transferred away by a patient who does not understand what they are signing. Applying to court early prevents both the delay and the family disputes that follow.

What is the difference between incompetent and quasi-incompetent?

The law has two levels, depending on how severe the condition is. Both require a court order, and the order is published in the Government Gazette.

• An incompetent person is a person of unsound mind declared so by the court, such as a patient with advanced dementia or one who is unconscious. They are placed under a guardian, who does every legal act on their behalf. Acts the incompetent person does personally can be avoided.
• A quasi-incompetent person has a physical disability, mental infirmity, addiction, habitual extravagance or a similar condition that leaves them unable to manage their own affairs, or likely to damage their own or their family's property. They are placed under a curator. They can still do ordinary acts themselves, but important ones need the curator's prior consent.

The important acts that need consent include investing property, borrowing or lending money, giving a guarantee, leasing out land or buildings for more than three years, making gifts beyond what is reasonable, buying or selling land, major construction or repairs, starting a lawsuit, and settling a dispute. An act done without consent can be avoided. If a bedridden patient cannot do these things personally, the court may authorise the curator to do them on the patient's behalf.

Who can apply to have a parent declared incompetent, and who becomes guardian?

The application may be made by the spouse, a parent or grandparent, a child or grandchild, an existing guardian or curator, the person caring for the patient, or the public prosecutor. It is a non-contentious case filed with the Juvenile and Family Court that has jurisdiction. The court holds a hearing and may call the doctor or other witnesses of its own motion. Where no relative objects, the hearing is usually brief.

If the patient is married, the law makes the spouse the guardian or curator. A child or other interested person can ask the court to appoint someone else only where there is an important reason. The law does not define what counts as one; the court decides case by case who will serve the patient better. If the patient is unmarried, the law appoints the parents unless the court orders otherwise. In the common case of an elderly widowed parent, the court decides which child to appoint. A child who has not been appointed has no power over the bank accounts even while caring for the parent, so siblings who do not fully trust each other should agree on a candidate before filing.

• A medical certificate or doctor's report stating the diagnosis, the symptoms and the patient's capacity to understand.
• National ID cards and house registrations of the patient and the applicant.
• Documents proving the relationship, such as the marriage certificate, birth certificate, or certificates of change of name.
• Letters of consent from the spouse and the other children, with copies of their ID cards, which shorten the hearing.
• A summary list of the patient's assets, such as land, bank accounts, shares and vehicles.

Can a guardian sell land, withdraw money or manage shares?

The guardian is the legal representative of the incompetent person. The guardian may use the patient's income as reasonably needed for medical care and living costs, and may exercise the patient's rights over their property. The following acts, however, need the court's permission first.

• Selling, selling with a right of redemption, mortgaging or hire-purchasing out land and houses.
• Leasing out land or buildings for more than three years.
• Lending money, or pledging property as security for another person's debt.
• Giving property away.
• Settling a dispute, or submitting it to arbitration.
• Any matter in which the guardian, the guardian's spouse or the guardian's child has an interest that conflicts with the patient's.

A conflicting transaction done without the court's permission is void. The Supreme Court has held void a guardian's change of beneficiary under the patient's life insurance policy, naming the guardian as sole beneficiary without the court's permission.

Where the spouse is guardian, the spouse alone manages both the marital property and the patient's personal property, but selling, mortgaging, leasing for more than three years and the other major acts still need the court's permission. A guardian who is not the spouse must complete an inventory of the patient's property within three months of learning of the appointment, certified by at least two witnesses. When the patient dies, the guardianship ends, and the guardian must hand over the property with an account of the administration to the heirs within six months. The appointment of an estate administrator follows.

Does a power of attorney, a will or a directorship survive the illness?

• Power of attorney. An agency ends when the court declares the principal incompetent. The agent may then do only what is necessary to protect the patient's interests until a guardian can take over, so managing the assets from then on requires an application for a guardian, and a guardian who wants to sell or mortgage land still needs a further court permission.
• Company directorship. A director who is declared incompetent leaves office immediately, and the company must register the change of directors within fourteen days. If the patient was the only authorised signatory, the company has nobody who can sign until a new director is appointed.
• Wills. A will made after the court declares a person incompetent is void. A will made before the order fails only if it is proved that the maker was of unsound mind when making it. Anyone showing early symptoms should make a will promptly, with a doctor's certificate of mental capacity dated the same day.

Family businesses should review the company's articles and signing authority in advance, so that more than one director can sign before the founder becomes unable to decide.

A parent transferred land while ill. Can it be recovered?

A transaction the patient made before the court order can be avoided only if two things are proved: the patient was of unsound mind at the time, and the other party knew it. A transaction an incompetent person makes personally after the order can always be avoided. The guardian must avoid it within one year of the appointment, and no later than ten years after the transaction.

The Supreme Court has set aside a gift of land that the patient made while not fully in possession of their faculties, where the guardian sued within one year of appointment, and the land returned to the patient. The person seeking recovery must prove both points, however. If it cannot be shown that the patient was of unsound mind that day, or that the recipient knew of the condition, the transaction stands. Applying to court as soon as the doctor confirms the condition closes that gap far better than trying to recover property later.

This article explains the general rules and is not legal advice on your situation. Whether to seek incompetency or quasi-incompetency depends on the medical opinion and on the assets that need managing. Send the firm the medical details, the list of relatives and the assets, and the firm will explain which application to make and which documents to prepare.