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Introduction

In Hong Kong, intestacy laws govern the distribution of a deceased person’s estate when they pass away without a valid will. Being familiar with these laws can provide a helpful guide in the unfortunate event that a loved one dies intestate.

Overview

Intestacy laws in Hong Kong are primarily defined under the Intestates’ Estates Ordinance (Cap 73) and the Wills Ordinance (Cap 30). The primary goal of these laws is to ensure a fair division of the deceased’s estate among surviving relatives.

Distribution of Estates

The distribution of an intestate’s estate in Hong Kong is based on a pre-determined order of priority, starting with the spouse and children, then parents, and followed by siblings, grandparents, uncles and aunts, and so on.

If the deceased is survived by a spouse and children, the spouse is entitled to the personal chattels (household items, cars, etc.), HK$1,000,000 in cash, and half of the remaining estate. The children will share the other half.

In situations where the deceased is survived by a spouse but no children, the spouse is entitled to the personal chattels, HK$1,500,000 in cash, and half of the remaining estate. The rest of the estate then goes to the deceased’s surviving parents or, if they are not alive, to surviving siblings.

If the deceased has children but no spouse, the estate is divided equally among the children. If there are no surviving children or spouse, the estate goes to the parents, then siblings, and so on following the predetermined order.

Legal Representation

In cases of intestacy, a legal personal representative must be appointed to administer the estate. This representative, known as an administrator, is typically the highest-ranking relative according to the intestacy rules. The administrator must apply for a Grant of Letters of Administration from the Probate Registry of the High Court before they can deal with the deceased’s assets.

Conclusion

The intestacy laws in Hong Kong provide a systematic approach to distributing a deceased’s estate in the absence of a valid will. However, these laws may not reflect the deceased’s personal wishes for their property. Therefore, it’s always advisable to seek professional legal advice and to consider making a will that reflects one’s personal wishes. The complexity of dealing with intestate estates further underlines the importance of having a well-drafted, legally valid will in place.

Introduction

Estate planning is a crucial process that ensures your assets are distributed according to your wishes after you pass away. While it may seem daunting, understanding the fundamentals is essential to protect your loved ones and secure your legacy. In this article, we will address some frequently asked questions about estate planning to help you navigate this important endeavor.

1. What is estate planning, and why is it important?

Estate planning refers to the process of organizing your assets and determining how they will be managed or distributed upon your death. It involves creating a comprehensive plan that includes a will, power of attorney, healthcare directives, and potentially, setting up trusts. Proper estate planning not only ensures your assets are distributed as per your wishes but also helps minimize taxes, avoids potential conflicts, and provides for your loved ones’ financial security.

2. When should I start estate planning?

It’s never too early to start estate planning. Regardless of your age or financial status, having a plan in place ensures your loved ones are protected in the event of your passing. Life is unpredictable, and it’s wise to be prepared by initiating the process as soon as possible.

3. What documents are essential for estate planning?

The core documents for estate planning include:

– Will: A will outlines your wishes for asset distribution, appoints guardians for minor children, and names an executor to manage the process.

– Power of Attorney (POA): This document designates someone to make financial decisions on your behalf if you become incapacitated.

– Healthcare Directives: These documents, including living wills and healthcare proxies, outline your preferences for medical treatment and appoint someone to make healthcare decisions on your behalf.

4. What is a trust, and should I consider one?

A trust is a legal arrangement where a trustee holds and manages assets on behalf of beneficiaries. It can provide benefits such as asset protection, tax planning, and avoiding probate. While trusts offer more flexibility and privacy, they are not necessary for everyone. Consulting with an estate planning attorney can help determine if a trust aligns with your specific needs and goals.

5. How often should I update my estate plan?

Life changes such as marriage, divorce, the birth of children, or acquiring new assets can significantly impact your estate plan. It’s crucial to review and update your plan regularly to ensure it reflects your current wishes. Experts recommend revisiting your estate plan every three to five years or whenever a major life event occurs.

6. What happens if I die without an estate plan?

Dying without an estate plan, also known as intestacy, means that state laws determine how your assets will be distributed. This often leads to time-consuming and expensive legal proceedings. Moreover, without a will, you lose the opportunity to name guardians for minor children and potentially leave loved ones without financial support.

Conclusion

Estate planning is a thoughtful and considerate process that allows you to protect your loved ones and control the distribution of your assets. By understanding the fundamentals and seeking professional guidance, you can create a comprehensive plan that ensures your legacy lives on while providing peace of mind for you and your family. Remember, estate planning is an ongoing journey, so don’t hesitate to reach out to an estate planning professional to discuss your specific needs and goals.

Introduction:

Writing a will is one of the most important actions we can take to safeguard our loved ones and ensure our assets are distributed according to our wishes after we pass away. Despite its significance, many individuals still overlook the importance of will writing. This comprehensive guide aims to shed light on the benefits and steps involved in creating a will. From understanding the legalities to tips on how to write an effective will, this article will empower readers to take control of their legacies and provide peace of mind for their families.

Section 1: Understanding Will Writing

1.1 What is a will?

A will is a legal document that outlines how an individual’s assets and properties should be distributed after their death. It also appoints guardians for minor children and may include funeral wishes.

1.2 Why is will writing crucial?

Writing a will is crucial for several reasons:

– Ensures your assets are distributed according to your wishes, minimizing the potential for disputes among family members.

– Allows you to choose the executor of your estate, someone you trust to carry out your wishes.

– Enables you to appoint guardians for your minor children, ensuring their well-being in case of your untimely demise.

– Provides an opportunity to make charitable donations or leave specific bequests to friends or organizations.

– Allows you to outline funeral arrangements, alleviating the burden on your loved ones during an emotionally challenging time.

Section 2: The Benefits of Will Writing

2.1 Avoiding complications and conflicts

By having a clear and legally binding will, you reduce the chances of disputes arising among family members over your assets. This helps maintain family harmony during an already difficult time.

2.2 Protecting your loved ones

A will allows you to provide financial security for your loved ones, ensuring they are taken care of after your passing. You can designate specific assets, funds, or properties to individuals or charities, ensuring your intentions are met.

2.3 Appointing trustworthy executors and guardians

Through a will, you can appoint executors who will handle the distribution of your estate, ensuring it is carried out in accordance with your wishes. Additionally, you can designate guardians for your minor children, ensuring their care and well-being under the guidance of someone you trust.

2.4 Minimizing tax burdens and legal complexities

Proper estate planning through will writing can help reduce tax liabilities, allowing more assets to be passed on to your beneficiaries. It also simplifies the legal process for your loved ones, saving them time, money, and potential stress.

Section 3: Steps to Writing a Will

3.1 Gather necessary information

Compile a comprehensive list of your assets, including properties, bank accounts, investments, insurance policies, and personal belongings. Also, consider who you would like to benefit from your estate, be it family members, close friends, or charitable organizations.

3.2 Choose an executor

Select someone you trust to carry out your wishes as the executor of your will. Discuss this responsibility with them and ensure they are willing to take on the role.

3.3 Consult with an attorney or use online will writing services

Consider seeking professional advice from an attorney specializing in estate planning. They can guide you through the legalities and ensure your will complies with local regulations. Alternatively, online will writing services offer convenience and affordability, providing templates and guidance to create a valid will.

3.4 Draft your will

While specific requirements may vary depending on your jurisdiction, a typical will should include:

– A clear statement that the document is your last will and testament.

– A naming of your chosen executor.

– Instructions for the distribution of your assets and properties.

– Appointment of guardians for minor children, if applicable.

– Funeral and burial instructions, if desired.

– Signatures of both the testator (you) and witnesses, as required by your local laws.

3.5 Safely store your will and communicate its existence

Ensure your will is safely stored, whether at home in a secure location, with an attorney, or in a bank’s safe deposit box. Inform your executor and loved ones of its location to ensure its accessibility when needed.

Conclusion :

Writing a will is a crucial step in securing your legacy and providing for your loved ones. By taking the time to create a will, you can ensure your assets are distributed according to your wishes, minimize family disputes, and provide financial security for your beneficiaries. Remember to review and update your will periodically, particularly after significant life events such as marriages, divorces, births, or changes in financial circumstances. By proactively addressing your end-of-life plans, you can find peace of mind in knowing that you have taken care of those who matter most to you.

Introduction

Choosing an executor of a will is a crucial decision that requires careful consideration. An executor plays a significant role in ensuring the smooth administration and distribution of assets according to the wishes of the deceased. This comprehensive guide aims to assist you in making an informed choice when selecting an executor. We will explore the key factors to consider, the qualities to look for, and the steps involved in making this important decision. By the end of this article, you will be equipped with the knowledge needed to choose the right executor for your will.

1. Understanding the Role of an Executor

Before delving into the selection process, it’s essential to comprehend the responsibilities and duties of an executor. An executor is entrusted with managing the estate, paying debts, filing taxes, and distributing assets as per the deceased’s wishes. They should possess strong organizational skills, attention to detail, and the ability to handle legal and financial matters. Familiarize yourself with the legal requirements and obligations placed upon an executor to ensure a smooth transition.

2. Identifying Potential Candidates

Choosing a suitable executor starts with identifying potential candidates who possess the necessary qualities and capabilities. Consider individuals who are trustworthy, organized, and have an understanding of legal and financial matters. Common choices include family members, close friends, or even professional executors, such as attorneys or financial advisors. Assess their availability, willingness to take on the role, and their ability to remain impartial during the distribution process.

3. Assessing the Qualities of an Executor

To make an informed decision, it’s vital to evaluate the qualities and skills that an executor should possess. Look for someone who is trustworthy, responsible, and has good communication skills. The executor should be able to handle conflicts, make impartial decisions, and work well under pressure. Analyze their attention to detail, ability to meet deadlines, and willingness to invest time and effort into fulfilling their duties. Additionally, consider their proximity to the deceased’s location, as this can impact their availability and accessibility.

4. Open Communication and Discussion

Once you have identified potential candidates, engage in open and honest discussions with them. Explain the responsibilities associated with being an executor and gauge their level of interest, commitment, and understanding. Ensure they are comfortable taking on the role and willing to invest the necessary time and effort. Discuss any concerns or expectations you may have, and encourage them to ask questions to clarify their responsibilities.

5. Seeking Professional Advice

In complex situations or where there is potential for family disputes, seeking professional advice can be beneficial. Consult with an attorney or estate planning professional who can guide you through the executor selection process. They can provide insights into legal requirements, potential challenges, and suggestions for suitable candidates based on their experience.

6. Making the Final Decision

After considering all the factors mentioned above, it’s time to make your final decision. Reflect on the discussions and consider the candidate who best aligns with your requirements, possesses the necessary qualities, and has shown a genuine interest in taking on the role. Ensure that you inform the chosen executor of your decision and provide them with relevant documentation, including a copy of your will and any additional instructions or wishes.

Conclusion

Choosing the right executor for your will is a crucial decision that requires careful thought and consideration. By understanding the responsibilities and qualities required, evaluating potential candidates, engaging in open communication, and seeking professional advice when necessary, you can make an informed choice. Remember, selecting a competent and trustworthy executor will help ensure that your final wishes are carried out accurately and efficiently, providing peace of mind for you and your loved ones during a challenging time.

Introduction:

Creating a will is an essential yet often overlooked aspect of personal financial planning. By drafting a will, you can ensure that your assets are distributed according to your wishes, minimize potential conflicts, and provide security for your loved ones. However, it’s crucial to approach this process with careful consideration and attention to detail. In this article, we will explore some important factors to keep in mind when making a will.

1. Seek Legal Advice:

Engaging the services of a qualified attorney is highly recommended when creating a will. A legal professional can guide you through the process, help you understand complex legal terminology, and ensure that your will complies with all applicable laws and regulations. They can also provide valuable insights and experience to address any potential challenges that may arise.

2. Define Your Objectives:

Before sitting down to draft your will, take the time to consider your objectives and priorities. Clearly state your wishes regarding the distribution of assets, including personal belongings, financial accounts, real estate, and investments. Additionally, consider who you would like to appoint as guardians for any minor children or dependents.

3. Appoint an Executor:

Selecting an executor is a critical decision when making a will. An executor is responsible for carrying out your wishes and managing the legal and financial aspects of the estate. Choose someone you trust implicitly, ensuring they have the capacity to handle the responsibilities involved. It is advisable to discuss this role with the individual beforehand to confirm their willingness to accept the position.

4. Consider Tax Implications:

Understand the potential tax implications associated with your will. Depending on your jurisdiction, there may be inheritance taxes, estate taxes, or other related obligations. Consulting with a tax advisor can help you create a well-rounded plan that takes into account these financial considerations, potentially saving your beneficiaries from unnecessary tax burdens.

5. Regularly Review and Update:

Life circumstances change over time, so it is important to review and update your will periodically. Major life events such as marriage, divorce, the birth of children, or the acquisition of significant assets can warrant modifications to your will. Regularly revisiting and updating your will ensures that it remains an accurate reflection of your wishes.

6. Communicate Your Intentions:

Once your will is carefully drafted, communicate your intentions to your loved ones. While it may be a sensitive topic, open and honest discussions can help prevent misunderstandings and potential disputes among family members. Sharing the location of your will and any relevant documents with trusted individuals is also crucial.

Conclusion

Crafting a will is an invaluable step in securing your legacy and providing for your loved ones after your passing. By seeking legal guidance, defining your objectives, appointing an executor, considering tax implications, regularly reviewing and updating your will, and communicating your intentions, you can ensure that your final wishes are respected and your loved ones are taken care of. Remember, creating a will is a thoughtful act that provides peace of mind for both you and your family.

Unfortunately, disputes often arise upon the death of a family member, it is an emotional time that can be exacerbated when beneficiaries believe that unauthorized or unfair transfers were made during the life of the deceased. Aside from the emotional despair, such unauthorized or unfair transfers impact beneficiaries, as their inheritance from the Estate is reduced.

The solution is usually forensic exercises to work out which transfers were authorized or lawful; transfers that were unauthorized or unlawful will be “clawed back” into the Estate.  However, forensic investigations may be time-consuming and costly, as it usually results in litigation. According to Hong Kong’s Social Welfare Department, between January to March 2020, at least 15 cases of elder financial abuse were recorded.

Examples of unauthorized or unfair transfers

There are many ways in which unauthorized or unfair transfers may occur during the life of a testator (a person who has made a Will or given a legacy), particularly in their later years. Very often, the mental incapacity of the testator contributes to such unauthorized or unfair transfers, as he/she becomes more vulnerable. Here are a few examples:

• using the testator’s bank account or credit card without their consent;
• falsifying records or forging signatures for the testator’s Will or cheques;
• investments made without knowledge or consent – these often include high fees or trading activity that may generate commissions for financial advisors;
• inappropriate sales/purchase of insurance policies; and
• coercion into changing their Will, for example, to gift certain assets such as property title(s).

The UK Courts were faced with an uncommon inheritance dispute relating to the commorientes rule (the term literally means “simultaneous deaths,” which applies to determining title to property) and survivorship in joint tenancy in 2019 in the case of Scarle v Scarle [2019] EWHC 2224 (Ch).

Case analysis

Introduction of the case

John and Ann Scarle lived in a bungalow in Essex. They did not have children together, but both had a daughter from previous relationships – Deborah was Ann’s daughter, and Anna was John’s daughter.  The couple was found dead in their bungalow on 11 October 2016, having died from hypothermia; John was aged 79, and Ann was 69. The bungalow was jointly owned by John and Ann (worth approximately GB£280,000) and they also had a joint bank account with GB£18,000.

Issue

The central issue in the case was which of the couple died first.  The law governing the ownership of jointly owned assets “is that the last to die is entitled the whole of the property and the sums in the account.” If Ann died first, their joint assets would have passed to John under her will, and then to his daughter Anna under intestacy rules; however, if John had died first, their assets would pass to Ann on intestacy rules, and on her death to her daughter Deborah pursuant to her will. To put it simply, the survivor “takes all”. Section 184 of the Law of Property Act 1925 (“the 1925 Act”) provides that where the order of death is uncertain, a presumption that death occurred in order of seniority (i.e. the older, John, died first).

A claim was issued in 2017 by Anna (representing John’s estate), stating that the presumption under section 184 of the 1925 Act should be rebutted – if she could prove “on a balance of probabilities, who died first” – and claimed that Ann had been the first to die, thereby making her beneficiary to the couple’s assets. Deborah claimed that “the use of the word “uncertain” [in s.184 of the 1925 Act] itself indicates that a standard of proof higher than the civil standard [of a balance of probabilities] is required to render certain that which appears uncertain”, relying on the cases Hickman v Peacey (1945) and Re Bate (1947).

In recent years, one of the main issues facing the Probate Registry has been the steady increase of ‘DIY Wills’. There are a number of ways to create a Will.

Most people will either instruct a solicitor specialised in Estate Planning on their behalf. Alternatively, people may make a homemade version using an online tool or general template. Making a Will at home seems to be the most affordable option, but the lack of professional guidance can lead to ambiguities rendering many Wills invalid, or – even worse – leading to future estate litigations which end up costing time and significant expenses.

Over the years we have come across a number of homemade Wills, as a result, we have seen a series of horror contentious stories that could have been easily avoided through appropriate and professional advice.

In cases where the homemade Will has an ambiguous meaning, the Court might ultimately have to determine the outcome for the beneficiaries. The primary objective when determining the distribution of the estate would be to ascertain what the deceased originally intended when writing the Will. This is a risky position, in fact, the Court’s judgment could significantly differ from the intentions of the deceased.

Several of our clients have encountered difficulties that include the circumstances highlighted here below.

Suicide notes

Often people write a suicide note before taking their own life, some contain final wishes regarding assets. The question is, can a suicide note can be deemed as a Will?

Due execution

Another common problem is due execution of the homemade Will. Under Hong Kong laws, a Will must be in writing and signed before two witnesses. Often such requirements are not observed in a homemade Will: usually, either the signature of the testator was not witnessed or only witnessed by one person.

Poor drafting

Homemade Wills are often drafted by individuals who are not skilled at drafting Wills. For example, a person may not be trained to draft a Will to leave a specific gift to a beneficiary, rendering a certain gift unenforceable or potentially disputable.

Who may apply?

s3 of the Ordinance provides that the following persons may apply for financial provision from the deceased’s estate:

• the wife or husband of the deceased;
• a tsip (where 妾 means “concubine” in Chinese) or male partner of the deceased by a union of concubinage;
• an infant child of the deceased or a child of the deceased who is, by reason of some mental or physical disability, incapable of maintaining himself.The above categories represent family members who would otherwise be entitled to share the estate under intestacy rules, hence a claim arises when they are deliberately excluded from inheritance by the Deceased’s Will.

The following categories of persons must have been maintained before the death of the deceased, either wholly or substantially:

• a former wife or husband of the deceased – though it is to note that such order ceases to have effect should he/she remarry;
• a parent of the deceased;
• an adult child of the deceased;
• any person (not being a child of the deceased) who, in the case of any marriage to which the deceased was at any time a party, was treated by the deceased as a child of the family in relation to that marriage – i.e. a step-child;
• a brother or sister of the half-blood or the whole blood of the deceased; and
• any person who was maintained before the death of the deceased, either wholly or substantially.

Only an adult child of the deceased is entitled to share under intestacy rules, so he or she must be excluded by the Deceased’s Will, yet they have to show that they were financial dependants before they are entitled to relief under this Ordinance.

At the same time, any person who was maintained, wholly or substantially, by the deceased before the death of the deceased can make a claim, irrespective of the relationship that the claimant may have with the Deceased. However, for this category of the claimant, it would be necessary to explain his or her relationship with the Deceased, leading to the financial support made by the Deceased.

What is “reasonable financial provision”?

There are two standards for deciding whether there is reasonable financial provision for an applicant, provided by section 3(2) of the Ordinance:

1. where an application is made by the surviving spouse of the deceased (or a tsip or male partner by union of concubinage), the question is whether it would be reasonable in all circumstances for them to receive such financial provision, regardless of whether the spouse needs such provision for his/her maintenance;
2. in all other cases, the Court considers whether the financial provision would be reasonable in all circumstances of the case for the applicant to receive maintenance.

In other words, in order to assist the Court in considering a claim, it is almost inevitable for a narrative affirmation to be filed on behalf of an applicant detailing the relationship between the applicant and the deceased in order to assist the Court to consider all the circumstances of the case together with documentary evidence to show that he or she has been receiving financial support. It could be painful and embarrassing for the applicant to reveal the personal relationship in lengthy affirmation which will be disclosed to other parties to the proceedings, especially when such a relationship is often not accepted by the other family members during the deceased’s lifetime which often becomes the opposite parties to such claim.