Mr. A and Mrs. B were a couple but Mr. A died recently. Mr. A has left behind a considerable amount of assets and now his family members have to deal with the following problems in relation to the distribution of his estate.
1. Mr. A and Ms. B have two children. In case Mr. A did not make a will, must the matrimonial home (the main residence of Mr. A and Ms. B) be sold and distributed as part of the estate?
Not necessarily. The surviving spouse (Ms. B) has a right to take the matrimonial home by law. She can choose to take the matrimonial home as part of her entitlement in the estate.
For example, the couple lived in a matrimonial home valued at $1million, held solely in Mr. A's name. Mr. A died without making a will and was survived by Ms. B and two sons. He leaves an estate valued at $1,450,000 (inclusive of the matrimonial home but exclusive of his personal items, which will be given entirely to his wife). Ignoring the funeral and administration expenses, Ms. B is entitled to $500,000 plus one-half of the remaining estate [($1,450,000 – $500,000) ÷ 2] which gives a total of $975,000. Mr. A's two sons would equally share the other half of the remaining estate, i.e. $475,000.
Ms. B can claim the matrimonial home by using her $975,000 (i.e. the flat is not sold and she does not take this $975,000) and paying the balance of $25,000 to the estate by her own means. The estate to be taken by the two sons remains at the value of $475,000.
2. Can Ms. B choose to keep the matrimonial home if Mr. A had made a will?
There must be a specific gift that the matrimonial home must be given to the surviving spouse in the deceased person’s will. If there is no such instruction in the will the surviving spouse has no right to keep the matrimonial home as part of her entitlement under the will.
3. Suppose Mr. A has left behind no children of his own but only his surviving wife (Ms. B) and his mother, brothers and sisters, how much could each party take from the estate if Mr. A has made no will?
If Mr. A has an estate valued at $1,450,000 (excluding his personal items to be fully taken by his wife), his wife Ms. B could first obtain the sum of $1,000,000. And so, ignoring the funeral and administration expenses, the distribution of estate to all relevant parties is as follows:
Ms. B is entitled to $1,000,000 + ($450,000 ÷ 2) = $1,225,000;
Mr. A’s mother is entitled to ($450,000 ÷ 2) =$225,000;
Mr. A's siblings are entitled to nothing (they will only have a share if Mr. A leaves no descendant and no parent).
4. How about if suddenly a man appears and proves that he is the “secret child” (illegitimate child) of Mr. A? Can he get a share from Mr. A’s estate?
An illegitimate child means a child whose natural parents were not married in the manner that the laws of Hong Kong recognize when he or she was born. For details, see Family, Matrimonial and Cohabitation on the CLIC website.
Illegitimate children enjoy the same succession rights as legitimate ones if their parents die after 19th June 1993.
Suppose Mr. A has a surviving wife (Ms. B), two legitimate sons and one illegitimate son, and his estate is valued at $1,450,000 (excluding his personal items to be fully taken by his wife). Ignoring the funeral and administration expenses, the distribution of estate to all relevant parties would be as follows:
Ms. B is entitled to $500,000 + half of the remaining estate [($1,450,000 – $500,000) ÷ 2] = $975,000;
After deducting the amount that Ms. B is entitled to take, the two legitimate sons and the illegitimate son can share the remaining estates equally.
The two legitimate sons are each entitled to ($1,450,000 - $975,000) ÷ 3 = $158,333 each;
The illegitimate son is entitled to ($1,450,000 - $975,000) ÷ 3 = $158,333.
5. Further to the question of illegitimate children, would the situation be different if the deceased has made a will?
It depends on the drafting of the will. For wills executed after 19th June 1993, if the words "to my children" are used, illegitimate children will be included as well. If a person does not wish any illegitimate children to benefit from his will and receive a portion of his assets, he should specifically name each of his legitimate children in his will.