Making a will is something that almost everyone puts off, but it’s never too early to guarantee your loved ones are cared for and your assets are distributed according to your wishes.
If you have family, pets, or prized possessions, making a will in Hong Kong is certainly something you should consider. Allowing you to declare how you’d like your finances and dependents handled after life, wills provide you peace of mind, knowing that your loved ones will be supported and your wishes respected. They also remove uncertainty from major life changes such as marriage, parenting, accidents, or loss. First time that making a will crosses your mind? We’re here with Phoenix Wills, a leading specialist in will writing and estate planning services in the Asia Pacific region, to break things down to you in simple terms. It’s time to check one more adulting task off your to-do list!
Everything you need to know about making a will in Hong Kong
Do I really need a will?
Technically, you don’t “need” a will, but if you don’t have one, you (or rather your loved ones) would have to make do with how the law determines who gets what, which may not be quite as you’d expect! Many assume that everything would automatically pass to their spouse, but the reality is it’s not quite that simple. In fact, if you don’t have a will, your assets would usually be divided between your spouse and children, and sometimes your parents, siblings, grandparents, or even distant family. So, if you’d like to decide who manages your estate after your passing, who inherits your assets, and most importantly, who looks after your children until they come of age, then yes, you really do need a will – having a solidly drafted, legally valid will in place is the only way to make sure that your wishes are met.
Is there such a thing as being “too young” to make a will?
Anyone over 18 who owns anything or has a minor child should start thinking about having a will. You might think that you don’t own much, especially if you don’t own real estate, but the threshold under which your assets can be accessed without a lengthy court process is actually quite low – it’s as little as HK$50,000 in Hong Kong.
If I own assets in multiple countries, do I need separate wills for each one?
It’s a common misconception that you can have only one will – on the contrary, it’s recommended that you have separate wills in place for each country where you have assets and, as a minimum, you should have a will for your “home” country and one for your country of residence, if not the same. You could have just one will covering assets in multiple countries, but some countries don’t readily accept wills set up in other countries; even if they do, the one will can only be processed in one country at a time. This means that if you have assets in several countries, but only one will, you could be looking at years before the beneficiaries would gain access to their inheritance.
On the other hand, if you have separate wills in each country where you have ties or assets, each will can be processed simultaneously in their local jurisdiction, and everything would be wrapped up much quicker. It’s important that all your wills are drafted in a way that they work around one another. For instance, a later dated will automatically voids an earlier dated will, so it’s crucial that you work with a will writer with experience in cross-border estate planning, rather than working with a local provider in each country.
If my kids live abroad, what can I do in my will to help protect them?
No matter where your children live, if they’re under 18, you need to appoint a guardian who can step in if both parents have passed away. This is even more important if you and your children live away from family. If the guardian doesn’t live in the same country as your child, then you should also appoint someone locally to act as a temporary guardian, until the permanent guardian could fly in to collect the child. If your children live in another country to you, then you’ll also need to consider whether there could be any tax implications for your children on their inheritance, and plan accordingly.
What happens to my children if both my spouse and I pass away and we haven’t legally appointed a guardian?
In this scenario, the children would become “wards of state”, meaning that the state would be responsible for them, which in turn means that the court would need to appoint a guardian for them on your behalf. As an immediate response, the children would be placed in care with family, if possible. Or, if there’s no suitable family close by, then the children could end up in an orphanage or foster care temporarily.
Next, the process of finding a suitable long-term guardian is initiated – and again, they may not be who you’d think to be deemed suitable by the court. The first set of grandparents who step forward aren’t necessarily granted care of the children, as the court needs to look at both sides of the family to verify that the appointed guardian is capable and suitable. Should the two sides start fighting over who should take the children, the process would be lengthened as the court would need to hear both parties – all the while, the children would be stuck in the foster care situation. Setting the seal on an up-to-date will is crucial to ensure that your children don’t end up in state care, as well as to make money readily available to the guardians for their custody.
In addition to a will, what other documents should I consider for full protection?
For a holistic estate plan, there are other legal documents that should be considered, including Advance Medical Directives (or Living Wills) and Enduring Powers of Attorney (EPA). The former lists out your wishes for medical treatment if you’re suffering from a terminal illness and no longer able to communicate, or if you’re in a coma following an accident. The latter nominates someone to manage your finances for you if you’re mentally incapacitated. These two documents cover during your lifetime, whereas the will comes into effect only after you’ve passed away.
If you have young children, you may also consider nominating a living guardian, who could step in if neither parent was able to care for the children, but at least one was still alive. This would typically be in an accident situation, where both parents were incapacitated, but covers any scenario where you’re unable to look after your children temporarily. Finally, it’s prudent to consider your financial estate plan while you’re at it, especially if your estate could be liable to estate tax. This includes financial planning as well as having appropriate critical illness cover and life insurance.
Got more questions? Book a free consultation with Phoenix Wills for bespoke professional advice today.
Phoenix Wills, Unit 2606, 26/F, AXA Southside, 38 Wong Chuk Hang Road, Wong Chuk Hang, Hong Kong, p. 5500 5260
This post is in partnership with Phoenix Wills.