Will and Estate

• A will is a document consisting of written instructions about the administration of an estate after a person's death, covering matters such as distribution of the estate, beneficiaries, and other terms and conditions of receiving the inheritance.
• A will that is drafted by the testator or testatrix (the person) is called a holograph will. As the Probate Registry only recognizes wills that conform to the laws of Hong Kong, controversy can be reduced by having a lawyer draft the will.
• The testator or testatrix can appoint up to four executors to administer the estate, including taking inventory of the estate, administering the estate, and arranging payment for the person's debts, taxes, funeral, and other expenses in relation to the estate. An executor can be a person or a trust company.
• The person can revoke, or revise any will made as long as he or she is mentally capable.
• The executor must distribute the estate according to the instructions written in the will as long as the will is valid.

1. The estate of a person will be distributed according to the Intestates' Estates Ordinance (Cap. 73) if a person dies without executing a will in Hong Kong. The person is called an intestate in this case.
2. Beneficiaries can be ranked in seven classes in the following order. Those ranked lower will be entitled to the estate if no person in the higher classes is present.
   • Surviving spouse, partner(s),and children.
   • Surviving parents.
   • Surviving brothers and sisters (siblings) of the whole blood or their surviving children.
   • Surviving brothers and sisters (siblings) of the half blood or their surviving children.
   • Surviving grandparents.
   • Surviving uncles and aunts who are brothers or sisters (siblings) of the whole blood of a parent of the person or their children.
   • Surviving uncles and aunts who are brothers or sisters (siblings) of the half blood of a parent of the person or their children.

Suppose the intestate (the person) has no debt, and the estate includes $2,000,000 in savings, a main residence that is worth $2,000,000 (where the person lives with the spouse), and company shares worth $1,000,000, the distribution of the estate will be as follows according to the Intestates' Estates Ordinance. Please click on the rows on the left to see the details.

• Personal chattels: Furniture; clothes; articles of adornment; articles of household, personal, recreational, or decorative use; consumable stores; garden effects and domestic animals situated at any residence of the surviving spouse, as well as motor vehicles and accessories. Does not include any chattel used exclusively or principally for business or professional purposes, or money or securities for money.
• Residuary estate: The part of estate that is disposable after payment of funeral and administration expenses, debts, taxes, and other liabilities.
• The above sample is for reference only. The estate each beneficiary is entitled to depends on various factors such as a mortgage, title to the property, debts, etc. Please consult a lawyer for details.

Distribution of an estate for an intestate (a person deceased without a will) can be very complicated. You may want to accompany the person to consult a lawyer if the following situations are present:

The spouse or partner(s) is still alive and the couple has no child.

Problem:

• The surviving spouse or partner(s) may have to share the estate with other relatives.

There is no surviving spouse, partner, child, or parent.

Problem:

• All siblings and their children are entitled to share the estate, and this may lead to conflicts.

If the person jointly owns the main residence and/or other properties.

Problems:

• If the ownership is in the form of joint tenants, the part of ownership held by the person will be passed to the other joint tenant(s) upon his or her death. The person has to go through various legal procedures before dedicating his or her part of ownership to specific beneficiaries as estate.
• If the ownership is in the form of tenants in common, the part of ownership held by the person will be distributed to all entitled beneficiaries according to the Intestates' Estates Ordinance. All beneficiaries and even the personal representatives have to agree and sign the required documents if they want to lease or sell the property.
• If the ownership is in the form of a declaration of trust, the person has to give instructions to the trustees beforehand.
• If there is an outstanding amount for the mortgage and there is no insurance to help the beneficiaries repay the mortgage, the beneficiaries have to pay the debt.

If the person has joint account(s).

Problems:

• If the person and other joint account holder(s) are regarded as joint tenants, the assets of the person in the account will be passed to the other account holder(s) upon his or her death. Family members and relatives are not entitled to declare any ownership.
• If the person and other joint account holder(s) are regarded as tenants in common, half of the assets in the account will be regarded as owned by the other account holder(s) upon his or her death. The other half will be distributed to all entitled beneficiaries according to the Intestates' Estates Ordinance. Beneficiaries have to go through legal processes to declare ownership if they think the person owned more than half of the assets in the joint account.
• If the account is an either-one-to-sign joint account, other joint account holder(s) can withdraw all assets in the account without the authorization of the person at any time. In order to recover the sum, beneficiaries have to pursue claims and prove to the court that the other joint account holder(s) embezzled the property.
• If the account is a both-to-sign joint account, but the other joint account holder(s) has access to the chop or seal of the person, the other joint account holder(s) can withdraw all assets in the account without the authorization of the person at any time. In order to recover the sum, beneficiaries have to pursue claims and prove to the court that the other joint account holder(s) embezzled the property.
• If the account is a both-to-sign joint account, the executor or beneficiaries has to apply for the grant of probate or letters of administration before administrating the assets in the account.

If the person has jointly rented a safe deposit box.

Problem:

• If any of the renters can access the box, the other joint renter(s) can withdraw all the contents of the box without the authorization of the person at any time when he or she is alive. In order to recover the contents, beneficiaries have to give proof of what contents were originally in the box in order to pursue claims that the other joint renter(s) embezzled the property.
• If any of the renters can access the box, the other joint renter(s) can withdraw all contents in the box without the authorization of the person after he or she is deceased and before the bank receives the news. In order to recover the contents, beneficiaries have to give proof of what contents were originally in the box in order to pursue claims that the other joint renter(s) intermeddled the estate.
• The other joint renter(s) have to apply to the Home Affairs Department for authorization to remove the contents from the box after the person is deceased, and this can be time-consuming.
• The other joint renter(s) is entitled to remove all contents from the box if the administration of the estate does not proceed within one year of the person's death.

1. The testator or testatrix (the person) records the contents in writing personally or has others record verbal instructions on paper.
2. Include the Hong Kong Identity Card number of the person and the Hong Kong Identity Card numbers and addresses of the beneficiaries in the will.
3. Date the will.
4. Sign the will in front of two witnesses who also have to witness each other signing it.
   • None of the witnesses should be a beneficiary or the spouse of a beneficiary under the will.
   • Having a lawyer be one of the witnesses can ensure the will conforms to the laws of Hong Kong.
   • Having a registered medical physician be another witness can ensure that the person is declared mentally capable when executing the will.
   • Informing the beneficiaries after executing the will may prevent complications.
5. Informing the executor(s) after executing the will can clarify any misunderstandings of instructions and may prevent complications and renunciations.

What is power of attorney and enduring power of attorney?

1. Power of attorney is a legal instrument used to delegate legal authority to the attorney to make property, financial, and other legal decisions on the donor's (the person's) behalf within a specific period of time.
2. Enduring power of attorney is a legal instrument used to delegate legal authority to the attorney to make property and financial decisions on the person's behalf until the person is deceased.
3. The attorney can be one or more than one person chosen from family members, other people, or trustees.
4. Power of attorney and enduring power of attorney can give authority on the following:
   • To collect and spend any income and capital due to the person, such as interests, dividends, pensions, Social Security Allowances, company's revenues, rents, etc.
   • To sell, lease, or surrender any of the person's movable and immovable property, such as his or her home, savings, investments, properties, etc.
   • To exercise any of the person's power on property and financial affairs.
5. Power of attorney and enduring power of attorney cannot give authority to execute, revoke, or revise a will.

Pros and cons of executing power of attorney or enduring power of attorney

1. The attorney can use all income, capital, and property of the donor after the power of attorney is executed or the enduring power of attorney is registered. The donor may want to introduce terms and conditions in the instrument, such as giving authority to access specific accounts or properties, or making it valid only when the person is mentally incapable.
2. Choose the attorney carefully. Improper use of the authorities may cause serious financial problems for the person and family members.

How to execute power of attorney and enduring power of attorney

1. Power of attorney
   • There is no prescribed form of power of attorney.
2. Enduring power of attorney
   • You can click here and download the "Enduring Power of Attorney (Prescribed Form)" in Chapter 501A for the person.
   • Execute the instrument in front of a lawyer and a registered medical physician who must certify the mental capability of the person.
   • Informing the attorney after executing the instrument and clarifying any misunderstandings over the instructions may prevent complications and renunciations.