When it comes to managing your assets in Hong Kong, understanding the importance of drafting a will is crucial. This Q&A article is tailored for individuals who possess various assets—such as bank accounts, insurance policies, securities, shares in private companies, and real estate—within Hong Kong.
To assist you in this process, you can refer to the attached template list of worldwide assets, which can help you organise your affairs effectively. Drafting a will becomes even more relevant when considering the complexities surrounding domicile, nationality, and tax implications.
The law in this respect is complex. Please note that this article does not, and is not intended to, constitute legal advice, and should not be relied upon as such. Slotine can assist with queries on drafting wills in Hong Kong. Please contact us if you wish to learn more about this.
Q1. Will or no will?
The short answer is yes (will). It is advisable to draft a will for your assets in Hong Kong.
A will can serve several important purposes:
- indicates the domicile of the person drafting the will, which determines the law governing the transmission of the estate;
- ascertains who should be in charge of the probate by appointing executors or executrixes of the estate;
- facilitates the making of gifts;
- expresses specific requests regarding cremation, burial or other funeral arrangements;
- lists the main assets and debts in a codicil to the will. Consider using our worldwide assets list template questionnaire to simplify this process.
Q2. Should I draft a will for my Hong Kong estate only or for my worldwide estates, too?
There is no short answer. A will drafted in Hong Kong may cover your Hong Kong estate only, or also cover your estates in other jurisdictions. The choice will depend basically on the nature and location of the estates (for instance, securities or properties), your domicile and your beneficiaries’ tax residency for the probate.
From a practical point of view, the executors or executrixes appointed in a will covering estates in multiple jurisdictions will have a different experience obtaining the grant of probate in common law jurisdictions, where the resealing of the grant of representation obtained in Hong Kong is possible, in comparison to civil law jurisdictions:
- In other common law jurisdictions, it is likely the grant of representation obtained in Hong Kong may be resealed. The resealing of a grant of probate avoids the need to reapply for a fresh grant in another jurisdiction. Once resealed, the documents can be used in the same way as a local grant of representation.
- In civil law jurisdictions, such as France or Québec, the wills and probate process is managed differently. There is no grant of representation made by a court. Instead, a public notary, who has public ministerial responsibilities, prepares a document to the same effect.
The role of the executors or executrixes (who may also be the beneficiaries) is pivotal to initiating the necessary actions to execute the deceased’s will (see part 2 of this Q&A on Probate for details).
Q3. Domicile, nationality, and tax rules: are they the same or different?
In a nutshell, to properly understand how one stands prior to making a will involving estates or beneficiaries in multiple jurisdictions, seeking legal and tax advice is recommended.
Domicile describes the country that an individual treats as their permanent residence, or lives in and has a substantial connection with. The deceased’s domicile determines the law governing the transmission of the estate, i.e. who gets what and in which proportions in the absence of a will or the proportion of the estate that can be freely disposed of in a will. While nationality and domicile coincide for most people, this is not always the case. Hongkongers who have lived and passed away overseas may still be domiciled in Hong Kong. On the other hand, expats who have lived and passed away in Hong Kong may still be domiciled in their country of nationality. Besides this, the European Union has adopted a different approach since 2012, focusing on the residence of the deceased (a practical concept) instead of the domicile of the deceased (a technical concept as illustrated by leading case law (Winans v Attorney-General [1904] A.C. 287, House of Lords and the Hong Kong Domicile Ordinance (Cap. 596).
Tax residency and taxation of the estate are governed by a different set of rules than domicile and nationality.
When the domicile, nationality, and tax residency of the deceased and their beneficiaries align, the only law that applies is the law of this commonplace. However, this is rarely the case in Hong Kong, where multiple nationalities and international mobility distinguish many residents.
Q4. Are joint properties part of the estate of a deceased person?
The answer depends on the type of shared ownership: tenancy in common (yes) or joint tenancy (no)
> When bank accounts or property are said to be joint, it usually means they are co-owned as joint tenants by two individuals. Upon the death of one of the joint tenants, the deceased’s ownership interest in the bank account or property automatically passes to the surviving joint owner. It is not part of a deceased person’s estate. Upon the death of a joint holder, the surviving holder becomes the sole owner of the jointly held asset. A grant of representation is not required for these joint properties.
For administrative changes, such as changing the name of a bank account, banks require the presentation of the death certificate. The same goes for changing the name of the owner of a joint property, where the land registry only requires the death certificate.
> In contrast, tenants in common have defined shares or divided interests in a co-owned asset and are regarded as separate individual owners. When one co-owner passes away, their share of the asset forms part of their estate and will be distributed according to their will or by the laws of intestacy in the absence of a valid will. A grant of representation shall be obtained to transfer the ownership of the deceased’s share to their beneficiaries.
Understanding the framework concerning wills in Hong Kong is essential for effective asset management. By drafting a will that follows the above guidelines, along with a list of the main assets and debts in a codicil that takes reference from our attached template, you can ensure that your estate is handled according to your preferences.
Being proactive about your assets will help minimise potential disputes in the future. If you need further help or guidance regarding the legal and tax analysis (which is a suggested preliminary step) and will drafting process, please get in touch with us today.