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Where there’s a will, there’s a way: What you need to know about estate planning in Hong Kong

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By Annette M Houlihan

Wills, trusts and guardianship documents – what exactly do you need in Hong Kong?

Estate planning – it may sound like something only the wealthy need to consider, but in reality it’s something we all need to think about. Here’s what you need to know about the different options in Hong Kong.

Wills

A will is a formal document that tells everyone what should happen to your assets in the event of your death. It can cover anything from bank accounts to property, land, MPF and so on. It’s important to have a will in Hong Kong, because the law is very prescriptive about who assets should go to without one in place.

For example, did you know that if you are married and die without leaving a will, only 50% of your assets will go to your spouse, with the other 50% going to your children? If you are married without children, 50% will go to your parents and/ or siblings. This always gives people a shock!

Living trusts

While wills are important, in reality they can take months, even years to administer, especially if you have assets spread across the globe. This is where trusts come in.

A living trust enables you to set the rules about how and when your assets should be distributed. It works by effectively giving your assets to the trustee so that they can access them immediately and distribute them toyour beneficiaries; think of it as baby-sitting your assets.

Living trusts are particularly useful for people with substantial assets such as cash, shares, antiques or jewellery and can often mitigate estate taxes. Assets covered by the trust must be placed into it while you are still alive, however you can still access them by setting yourself up as a beneficiary.

Will trusts

Will trusts are useful for individuals who don’t need a living trust but who would prefer their estate to be drip fed rather than paid out all in one go, for example those with young children. Assets are placed into the trust in the event of your death and are administered by an executor.

Guardianship documents

Guardianship documents are written instructions stating what should happen to your minor children if they become orphans. They can be used to appoint a temporary guardian to look after your children if the permanent guardian is not in Hong Kong.

Guardianship documents are extremely important, as without them the government will assume responsibility for your children and it can take a long time to extract them from the care system. It is advisable to use a professional to help complete the forms in order to avoid overriding any instructions you already have in place regarding permanent guardians.


For more estate planning advice, contact Annette M Houlihan, managing director of Carey, Suen Will Services at [email protected], or visit www.careysuen.com.


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