There is no avoiding the crude reality, we are all going to expire at some point. When we do, we better had got our affairs in order. This, of course, includes writing a last will and testament.
Expats living in the Kingdom often face a number of complicated issues when trying to determine the disposition of their property after death. Some of the questions they might struggle with include: should I write a will in Cambodia, or should I write one in my country of origin? Should I write a will in both countries? Do I need to hire an attorney? What type of wills are there, and which one should I use?
Although wills were introduced in the Kingdom during the time of the French protectorate (1861-1941), under the Civil Code of Cambodia, which only came into effect in 2011, the law is untested in many areas of successorship, which complicates things for testators. But, don’t worry: as we explore will-writing in the Kingdom, we consult with the top experts in the industry to help you gain clarity on the subject.
Should I Write A Cambodian Will?
Let’s go over some of the basics first. The Civil Code is the document that governs will-writing in the Kingdom – specifically Book Eight (articles 1145 to 1304) which is titled “Succession”. You should also know that Cambodia has no taxes on inheritance, and that Cambodian laws apply to property located in Cambodia (lex rei sitae).
So, under what circumstances should you create a will in Cambodia?
Cindy-Marie Leicester, will writer at Wills Worldwide, says that anyone with children here, as well as immovable property, should be thinking of creating a local testament to dispose of their assets after they pass away.
West N. Hib, attorney-at-law at Skywon Law and Leicester’s associate, is of the same mind, adding that drafting a local will makes it easier to enforce the wishes of the deceased. According to the US-educated American Cambodian lawyer, a testament written in the deceased’s country of origin will have to be passed over to a Cambodian court, which will have to adjudicate on it. This, he says, adds a level of complexity that can be avoided by simply writing a Cambodian will.
Types of will
As set out in the Civil Code, there are seven types of wills. However, only the first three listed in the code are relevant for the purposes of this article – a will by notarial document, a will by privately produced document, and a will by secret document. The rest – which include the will of a person in immediate danger of death and the will of a person in quarantine – deal with very specific cases and are just variations of the first three.
A will by notarial document demands that the person orally declares the tenor (exact wording) of the will to a notary in the presence of two witnesses, who can’t have blood ties to the testator. The notary then writes down the content of the will and reads it aloud to the testator and witnesses. Finally, the testator, the witnesses and the notary sign the document.
Skywon Law’s Hib says that, by law, a notarised document like this will be accepted by most institutions. However, to guarantee that the will’s authenticity isn’t put into question and the wishes of the decedent are respected, he says the document should be brought before a court, where a judge can issue a ruling.
“Some institutions, such as banks and the cadastral office, may have certain internal procedures in place that might require a ruling by a court. It’s always best to get such a ruling that declares the will is legitimate,” added Hib.
In a will by private document the testator writes the whole text by himself – by hand – and affixes his signature. This type of will is more susceptible to fraudulency, since it doesn’t involve a notary or an attorney, explains Hib. He says that, even more so than with a notarised document, this type of testament should be taken to a court by the executor of the successors for the application of probate.
A will by secret document is what attorneys call a “hybrid”, combining features of both previous types of wills. In order to make a will by secret document, the testator writes down the text of the testament, signs it and puts it inside an envelope which he later seals. The testator can utilise the help of an attorney to write the testament.
Next, the testator produces the sealed document before a notary and at least two witnesses and declares that it is his (or her) testamentary document. The notary then writes the date of the production of the document on the envelope and signs it. The testator and the witnesses also affix their signatures.
Hib, whose law firm handles mostly wills by secret document, says that writing this type of will is generally less costly than writing a notarised testament, since it doesn’t require a notary to write the text. According to Hib, notaries usually charge a fixed percentage of the testator’s property value (as expressed in the will). If the testator is handing over a considerable wealth, the fees can be hefty.
Inheriting property as a foreigner
According to Article 1155 of the Civil Code, foreigners are unable to own property or land by means of a testamentary gift. In other words, just because you inherit a property, doesn’t mean you get to keep it. “You can’t own property through inheritance if you are not Cambodian,” says Leicester. “This is one of the biggest issues testators face here.”
In the Kingdom, foreigners can only own properties that are registered under a strata title, a special type of deed that applies only to units within co-owned buildings (also known as condominiums), excluding the ground floor. There are other ways a foreigner can enjoy practical ownership of a property, such as through a nominee structure or through a company with a majority shareholder with Cambodian citizenship. For more on this topic, click here.
If a foreigner inherits a property, and that property doesn’t have a strata title – or is not being held through a company with a Cambodian majority shareholder – he or she cannot assume ownership of the estate. In this situation, the law dictates that the estate becomes a legal entity, which the foreigner must sell within three months. The profits are then distributed among the heirs (including foreigners) and the entity is dissolved.
If the estate cannot be sold within three months, it must be handed over to the next inheritor in line holding Cambodian citizenship.
Hib says boutique law firms, such as Skywon Law, can assist testators in drafting testamentary instruments that foresee these problems and work around limitations to foreign property ownership, potentially avoiding some major headaches to foreign heirs when the testator passes away and the will becomes effective.
Both Leicester and Hib agree, however, that the law is largely untested in this area, so it isn’t clear how the court would rule on the matter of a foreigner inheriting a property that he or she cannot own by law.
Expats looking to write a will in Cambodia should also be aware of Article 1230, which stipulates that at least half of the deceased’s estate must be passed on to the descendants. This is known as the “secured portion”. If the only surviving heirs are the deceased’s parents or grandparents – known as ascendants – the secured portion that must be allocated to them is one third of the whole estate. The testator can dispose of the rest of the assets (half or two thirds, depending on the case) as he or she wishes.
Hib says that the law allows for some wiggle room in this regard. A person may give its descendants considerably less than half of his or her estate. However, as long as the portion awarded is “reasonable”, Hib argues, no court is likely to rule against what’s specified in the will.
“For example, if your son is a doctor who makes $100,000 a year, and your father, on the other hand, doesn’t have any income, you may decide to give the bulk of your wealth to the latter. Although it is against what the civil code says, if you explain your rationale and is reasonable, the court will likely agree with you,” he says.
In case the deceased didn’t leave a testament, his or her property goes first to the descendants (children and grandchildren), which are considered successors of first rank. Children of the decedent have equal shares in the succession, regardless of whether they are natural or adopted. If there are no descendants, the estate goes to the ascendants – parents or grandparents. In the absence of ascendants, the estate is distributed among the siblings of the testator. A spouse of the decedent, by law, shall become a successor in every case. If the deceased has no living spouse or relatives, the property may go to the State.
Adopting a worldview of your property
Keep in mind that only your last will is valid, with each new testamentary document produced nullifying the previous one.
Besides creating a local will, Leicester recommends writing a testament in your country of origin or in any other country where you have property.
“If you own property in Spain, for example, you really want to create a will in that country, because you don’t want the Cambodian government making decisions on your assets there,” Leicester says. “You really need to take a worldwide view of what’s going to happen when you die.”