2. What other matters should be considered before making a Will?
Although the following ten points are not an exhaustive list of matters to be considered when making Wills, they can be treated as a good starting point:
i) Domicile (place and right of abode)
Your domicile as at the date of death can have implications on the disposition of estate in your Will. The law of your country of domicile as at the date of your death governs gifts of movable properties such as shares and money in bank accounts. The law in some countries (but not in Hong Kong) requires that you must leave a certain proportion of your estate to your children or widow. Unless you specify to adopt a domicile of choice, your domicile will usually be the domicile you acquired at birth from your father, rather than the place of your birth.
On the other hand, the law governing disposition of land/flats (real estate) which are "immovable" is the law where the land/flats are located. For example, if the deceased has two flats (one of them in Hong Kong and the other is situated outside Hong Kong), then the foreign property will not be included in the estate in respect of the Grant of Representation in Hong Kong.
ii) The Executor(s) of your Will
- Executor(s) are the people whom you wish to appoint to be responsible for administering your estate. According to section 39 of the Probate and Administration Ordinance, the executor must be over 21 years old at the time of administering the deceased's estate. Instead of individuals, you may also consider appointing a trust corporation to act as Executor(s).
- You should consult with the executor(s) to determine whether he or she is willing to accept this role.
- If you choose your spouse to be the only executor/executrix, you must take into account the possibility that you both may unfortunately die in the same accident.
- You may name two or more persons (up to a maximum of four) to act as your executors. If so appointed, they must do everything in relation to your Will together.
iii) Survivorship Clause
A survivorship clause is a clause in a will that requires the beneficiary must outlive the testator by a specific period before is eligible to receive the gift.
If the beneficiary does not outlive the testator for the specific period, the gift will go to another designated beneficiary if the will so specifies. This type of gift is known as a substitute gift.
This clause gives a testator control on the ultimate destination of his estate. Without the clause, even if the spouse of the testator:
- outlives him for only a short period, or
- presumed to have died after the testator by the operation of the commorientes rule (i.e. where the couple died and it is impossible to determine which spouse died first, the younger spouse is presumed to have died later), the spouse will be presumed to have outlived the testator and be eligible to inherit the estate of the testator.
iv) Funeral Arrangements
Traditionally, declarations for funeral arrangements/burial/cremation are included in Wills. There is however a risk that if the Will cannot be located immediately, these wishes might be overlooked as a result.
v) Personal Effects (personal belongings)
Most often, you will leave your personal belongings to your spouse. If the Will is silent on this matter, these properties will fall into the residue of the estate and will be sold, with the proceeds forming part of the cash residue.
You may wish to make specific gifts of money, shares, or real estate to certain persons or charities. One point to note before the abolition of estate duty is that any gift to a registered charity in Hong Kong according to your Will is exempt from estate duty.
vii) Distribution of your Estate
Age of Distribution: If any beneficiary of an estate is under the age of 18, the executor must hold the child’s share in trust (to keep the relevant assets properly on behalf of this child). Some parents also state in their Wills that a child should not receive his or her inheritance at the age of 18, but at a later age such as 21 or 25, when it is more likely that the child will be mature enough to manage his or her inheritance. Discretionary powers will therefore be given to the executor to distribute as much of the income and/or capital for the benefit of the child as the executor sees fit before the child can formally receive all the assets.
viii) Common Disaster Clause (in relation to married couples)
Most married couples choose to deal with common disaster in their Wills because it is probable that such an event could occur, given that married couples do often travel together. If no provision is made in a Will and a common disaster occurred rendering it uncertain which spouse survives the other, then the younger is deemed to have survived the elder. In other words, the estate of the elder deceased will pass to the younger deceased, which will then be further dealt with according to legal regulations.
ix) Persons under Disability
When making a Will, it is advisable for special trust provisions to be arranged for a beneficiary who is a disabled. For example, a trustee or a guardian may be appointed to monitor the assets inherited by the disabled.
x) Guardianship of Minor Children
You should consider appointing a person to act as guardian (to have legal custody) of any children who are minors (below the age of 18) at the time of your death. The guardian cannot however displace the rights of a surviving legal parent.
xi) Obligations to Maintain Others
This will be discussed under the heading of "Free Testamentary Capacity".
- A survivorship clause is a clause in a will that requires the beneficiary must outlive the testator by a specific period before is eligible to receive the gift.
- If the beneficiary does not outlive the testator for the specific period, the gift will go to another designated beneficiary if the will so specifies. This type of gift is known as a substitute gift.
- This clause gives a testator control on the ultimate destination of his estate. Without the clause, even if the spouse of the testator: (i) outlives him for only a short period, or (ii) presumed to have died after the testator by the operation of the commorientes rule (i.e. where the couple died and it is impossible to determine which spouse died first, the younger spouse is presumed to have died later), the spouse will be presumed to have outlived the testator and be eligible to inherit the estate of the testator.