Probate

How your assets are going to be distributed?

When you have reached the end of your life, how are your hard earned assets such as apartments, bank deposits, shares or jewelry, going to be distributed? Is it going to be governed by the laws of Hong Kong or the laws of some other jurisdictions?

Different kinds of assets in your estate may be governed by the laws of different jurisdictions. For those immovable assets (e.g. housing and land), their succession is generally governed by the laws of the place where the assets are located and not the place in which you live. If you own an apartment in Dongguan, China, for example, the succession of that apartment would generally not be governed by the laws of Hong Kong but by the laws of that place regardless of whether you live in Hong Kong or Dongguan. Likewise, even if you have lived in Dongguan for years, and you have an apartment situated in Hong Kong, the succession of that apartment would generally be governed by the laws of Hong Kong.

The succession of movable assets (e.g. bank deposits, shares or jewelry) is generally governed by the laws of the place you live in when you pass away. For example, if you live in Canada, no matter whether your jewelry is stored in Canada or in Hong Kong; its succession would generally be governed by the laws of Canada.

For assets in foreign countries and foreign laws, you may need to consult foreign legal professionals or refer to other sources to learn about the way your assets are going to be distributed.

If you live in Hong Kong, under Hong Kong law you may make a will to decide how your assets are going to be distributed. In general, you may leave your assets to your family members, or you may leave your assets to anyone else, such as friends or charities. You may specify that certain items should go to certain persons or you may simply specify certain portions (for example, portions of shares or money) go to certain persons.

If you make no will or if your will has not taken care of all your assets, then your whole estate (if no will at all) or those parts of your assets that have not been taken care of will be distributed in accordance with the law as follows:

A. If you leave behind only your husband or wife

According to section 4(2) and section 5 of the Intestates’ Estate Ordinance (Cap. 73), if you leave behind only your husband or wife and no surviving descendent, no surviving parent, and no surviving whole brother or sister, then your assets, after deducting your debts, tax, funeral, legal and other expenses, will all be given to your husband or wife. Note that if your husband or wife and you are under judicial separation, he or she will not be considered as your husband or wife.

B. You leave behind only your descendent(s)

According to section 4(5) of the Intestates’ Estate Ordinance (Cap. 73), if you leave behind [some descendent(s) but no surviving husband or wife, then, no matter if you also leave behind your parent(s) or brother(s) or sister(s), all your assets, after deducting your debts, tax, funeral, legal and other expenses, would be distributed to your descendent(s) as follows:

According to section 5 of the Intestates’ Estate Ordinance (Cap. 73), if your child(ren) survives you, your assets will be divided among them equally and your grandchild(ren) will not receive a dime (An unborn fetus is also a child (section 2 of the Intestates’ Estate Ordinance (Cap. 73)). But if your child(ren) unfortunately dies young before you do and leaves behind his or her own child(ren), then his or her child(ren)(i.e. your grandchild(ren)) will take up the share of your fallen child(ren) on an equal basis. But if a child of yours died young and leaves behind no children of his or her own, then the share of that child of yours will be divided equally among your other child(ren).

For example, you have child A and child B and an estate in the sum of $2 million. If both A and B survive you, each of them will be given $1 million and their children will not receive a dime. If A dies young, leaving behind two children, then B will get $1 million and A’s two children will each receive half a million. If A dies young and leaves behind no child, B will take all $2 million. And if both A and B die young, and A leaves behind one child and B two, then A’s child will get $1 million and B’s two children half a million each.

On the other hand, if you have given or are about to give your child (or children) substantial financial support, e.g. paying the down payment for him/her when he/she purchases an apartment when he/she gets married, those monies would probably be considered to be a part of your estate and be distributed equally to all your children together with other assets of yours. For example, you have child A and child B and an estate of $2 million. If you had given A $1 million for the purchase of an apartment but not B, then at the end A and B would each get [$2 million (your estate) + $1 million (the money A received from you)) ÷ 2 = $1.5 million.

C. You leave behind a husband or wife and descendent(s)

If you leave behind both a husband/wife and descendent(s), according to section 4(3) of the Intestates’ Estate Ordinance (Cap. 73), no matter whether your parents or brothers or sisters survive you, your husband or wife may first receive the following items:

All of your personal items such as furniture, clothing, accessories and vehicles;
A sum of $500,000 out of the remaining assets.

If there are any assets left, then, they would be divided into two halves. One half will be given to your husband or wife, and the other half to your child(ren) equally. (and if a child of yours dies young, that is, dies before you do, his or her children take over his/her share equally.
For more details, please refer to part (B).

According to section 7 of the Intestates’ Estate Ordinance (Cap. 73), if your matrimonial home is a part of your assets, your husband or wife will have priority, and the right to take that home to satisfy his/her share of your estate. But if his or her share is not enough to take over the home entirely, he or she will have to pay for the shortfall before he/she can take it.

D. You leave behind no descendent (that is, you leave no offspring) but you leave a husband/wife as well as your parent(s) or brother(s) or sister(s)

If you leave behind no descendent, according to section 4(4) of the Intestates’ Estate Ordinance (Cap. 73), even if your husband or wife survives you, your parent(s) or brother(s) or sister(s) may also receive a share of your estate. Your surviving husband or wife will first receive the following:

All of your personal items such as your furniture, clothing, accessories and vehicles; and
A sum of $1 million out of the remaining estate

The remaining assets, if any, would be divided into two halves. One half would be given to your husband or wife, and the other half equally to your surviving parent(s). If no surviving parent, then equally to your whole brother(s) and sister(s).

E. You leave behind illegitimate children

According to section 3 of the Intestates’ Estate Ordinance (Cap. 73), illegitimate children can now enjoy the same succession rights as legitimate ones if their parent died after 19th June 1993.

F. You leave behind adopted children

According to section 2 of the Intestates’ Estate Ordinance (Cap. 73), children who are adopted in accordance with the law enjoy the same succession rights as biological ones that is, they have the same right to inherit their parent’s estate as biologically related children do.

G. You leave behind no husband or wife and no descendent

In this case, according to section 4(6), 4(7) and 4 (8) of the Intestates’ Estate Ordinance (Cap. 73), after deduction of your debts, tax, funeral, legal and other expenses, your assets would be equally distributed to your surviving parent(s); if no parent survives, your assets would be equally distributed to your surviving whole brother(s) and sister(s); if no such brother or sister, equally distributed to your half brother(s) or sister(s); if no such relative exists, your grandparent(s); if no grandparents survives, whole brother(s) and sister(s) of your parents; if you have no whole brother(s) or sister(s), then half brother(s) and sister(s) of your parents. If no qualified relative survives at all, your assets will go to the Government.

H. You leave behind a concubine

Since 7th October 1971, the laws of Hong Kong no longer allow a man to take a concubine. Yet, according to section 13 and schedule 1 of the Intestates’ Estate Ordinance (Cap. 73), those concubines taken before that date still have certain rights of succession. Roughly speaking, your surviving concubine(s) will take around one third or one sixth of your
assets depending on what family members you also leave behind.

More specifically, if:
(1) your wife survives you; AND
(2) anyone of your descendants, parents, brother or sister also survives you;

then your concubine could receive only 1/6 of your assets after deducting the said miscellaneous expenses and the cash and personal items that your wife is entitled to (if more than one concubine, the 1/6 to be divided equally)

If:
(1) your wife does not survive you, OR
(2) your wife survives you but not any of your descendants, parents, brother or sister;

then your concubine could receive 1/3 of your assets after deduction of the said miscellaneous expenses and the cash and personal items that your wife (if surviving) is entitled to (if more than one concubine, the 1/3 will be divided equally).