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Jan 2017 - The opportunity has now come to draft your Will & work out your Estate Planning

The opportunity has now come to draft your Will & work out your Estate Planning.


Although some of us might have a Will in place, the majority does not have one. One reason for this could be because one is still not aware of the negative consequences of not having created a Will at all. However, it seems that the more likely reason for having no Will is simply because lack of time: having a busy work and family life and the fact that drafting of a Will requires some preparation are often the main contributors for not having yet started the Will’s process.


Why a basic Will?



Although it is appreciated that we all have a busy work and family life, one should at least have a basic Will in place for the same reason as why most of us do have a health insurance. Passing away without a Will means that one’s estate will be divided according to the Hong Kong Intestates’ Estates Ordinance (“Rules”), which Rules amongst others do not regulate or provide any insurance for:


- a particular executor that one might have in mind for the execution of one’s estate. If this person is not expressly stipulated in the Will, the Rules will provide for (another) one;


- in case various real estate is involved, which descendant or offspring is gifted with what type of immoveable property and whether these gifts would be free of any mortgages or charges. Please also note that when minors are involved, as they cannot hold any immovable property until the age of 18, one might want to arrange for a particular trustee in advance instead of having an appointed trustee provided by the Rules;


- how one should deal with particular personal assets, such as whom should be gifted that special jewelry or those beautiful paintings or what for example to do with any pets one might have;


- what will happen to one’s minor children in case both parents pass away at the same time? The last thing that parent usually want to happen is that a court has to decide on the guardianship of their children whereby it is decided that the children have to stay with an unknown family. Although in practice, a court is likely to provide guardianship to closely related family members, the process itself to obtain guardianship might be rather burdensome and causes for unnecessary stress for all interested parties involved, in particular to the minors themselves when family lives overseas;


- whether one wants to be cremated or buried: although one during lifetime might have made it clear to their loved ones what to do with his or her body after death, arguments between family members may arise after he or she has passed away. Therefore, it would not harm to set-out in a Will a ‘wish’ for either being cremated or buried as this would avoid any uncertainty. At the same time, especially when one is from an overseas jurisdiction and also wants to be cremated or buried in that jurisdiction, it would give the executor of the Will clear guidelines on what to do with the deceased as simply speaking dealing with one’s estate can be a rather stressful process; and


- whether one wants to gift any monies to charity.


Please note that the testator inside his/her Will should also stipulate his or her domicile, for example Hong Kong, and that his or her Will should therefore be construed and effected according to the laws of Hong Kong. However it should be noted that in international context, such as when a person is ‘also’ having a domicile somewhere else or when overseas real estate is involved, different laws of succession might apply.


Therefore, whenever a larger estate is involved and/or there is an estate that is spread across the world, next to drafting a more extensive Will instead of just a basic Will, it is also recommended to set-up a Trust or a Foundation.


Trust, Foundation & Probate




Although a Will itself also can provide for a trust, i.e. for a so-called testamentary trust, such trust is often set-up by the testator for the benefit of his or her minors, whereby the assets that are being transferred into the trust are still subject to probate and the trust itself might even become subject to regular control checks by the courts. However, a trust that has been set-up during life time, i.e. a so-called intervivos trust, is not subject to any probate (neither the assets it contains) as such trust, simply speaking, cannot ‘die’. Intervivos trusts are therefore used a) to avoid probate and b) for asset protection as all assets transferred into this trust are no longer considered to be part of one’s personal estate but c) also for tax planning purposes.


It should be noted that as a Foundation like a Trust also provides for asset protection, most people that are from a civil law jurisdiction would have a preference to use a Foundation instead of a Trust as they tend to be more familiar with the civil law terminology that surrounds the Foundation.


Enduring Power of Attorney & Directions of Medical Treatment




In addition, next to a Will and potentially also a Trust or Foundation, it is recommended to have as well an Enduring Power of Attorney (“Power”) and Directions of Medical Treatment (“Directions”) in place. The Power basically grants certain powers by one person (“Grantor”) to another (the “Attorney”) in the event that the Grantor becomes mentally incapacitated. The rules that are surrounded by this Power are governed by the Enduring Powers of Attorney Ordinance and have to be in a prescribed form. The Power itself is however limited to the control of the Grantor’s properties and his/her financials only. Therefore, in case one also wants to give directions (although not binding) to a person such as a family member on how to deal with certain medical treatments when one becomes mentally incapacitated, for example what to do when one becomes dependent on a life machine support, separate Directions of Medical Treatment should be stipulated.


Wills Questionnaire


The opportunity has NOW come to draft your Will and to work on your Estate Planning. If interested, please send us an email on willem-jan.hoogland@haldanes.com and we will forward you a Wills Questionnaire after the relevant client enrolment procedure and payment of deposits.


Written by: Willem Hoogland, Trainee


Reviewed by: Warwick Haldane, Consultant

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AWARDS

AWARDS

We are delighted to announce that Haldanes has been recognized by peers and industry as "Criminal Law Firm of the Year" for the 13th year in succession.  Our reputation as the premier criminal law firm in Hong Kong has been built over four decades with a strong pedigree of local and international legal practitioners.  The commitment, credibility and client focus of our teams has been recognized once again and we would like to thank our staff, clients and industry partners for their loyalty and support. We look forward to many more years of faithful service and dedication.

Haldanes has cemented its reputation as the leading firm for criminal defence in Hong Kong. John Kang of Asian Legal Business looks into the local firm’s rise to the top and finds out how it stays it there. Earlier this month at The Macallan ALB Hong Kong Law Awards 2017, Haldanes beat the likes of Deacons – Hong Kong’s largest domestic firm – and international disputes firm Kobre & Kim to win the Criminal Law Firm of the Year award. But its victory was no shock: Haldanes has won the award for 18 straight years. The local firm’s dominance in this category is even less surprising for barristers like Peter Duncan SC and Gary Plowman SC, who work closely with Haldanes. “The firm has a universal and well-deserved reputation for its fearless protection of its clients’ interests whilst always remaining true to the rules of the judicial process and the public interest in the integrity of the profession,” says Duncan. Plowman adds, “I have worked with Haldanes many times over the years, and I have no difficulty at all understanding why they are the consistent winners of this prestigious award. They are a class act.” Haldanes has the biggest criminal law practice in the city: it has eight qualified lawyers who do nothing but criminal defence work. This focus is different from the majority of firms whose criminal defence work is just a small part – if at all – of their practice. Given these factors, it certainly isn’t difficult to understand why Haldanes is the undisputed leader in this area…… To read the full article please visit: http://www.legalbusinessonline.com/news/alb-insights-how-haldanes-became-go-firm-criminal-defence-hong-kong/75135