Probate and Estate Planning
Alfred Ip, Partner
Olivia Kung, Associate
An executor is a person appointed by Will to carry out the administration of the estate. As a result, beneficiaries rely on the executor to perform his/her duties properly including:-
1. Take out probate; and
2. Administer the estate efficiently and in accordance with the Probate and Administration Ordinance (Cap 10)
Unfortunately, in reality, sometimes the executor turns out to be far from perfect. Beneficiaries may find themselves stuck with an executor who is unresponsive, difficult, hostile, or simply unfit for or uninterested in the job. The followings are ways to “dispose” of the unwanted executor:-
Option 1- Caveat
This is a form of caution placed against the estate to prevent the issue of a grant of probate without notice to the caveator. A caveat will remain in force for 6 months, after which it ceases to have effect. A caveat can be repeatedly renewed every 6 months.
Procedure and requirements in respect of caveat can be found in Rule 44 Non-Contentious Probate Rules (Chapter 10A)
Option 2- Renunciation of the right to probate by the executor
This option is only possible if the executor is willing to do so. No one can be forced to be an executor even if he/she has agreed to do so during the testator’s lifetime. If the appointed executor no longer wishes to act in such capacity, he/she should exercise the right of renunciation.
Renunciation can be made orally on the hearing of any petition or probate action or in writing signed by the person renouncing. The form for added of renunciation of Probate can be found on the judiciary website (please hyperlink he form.)
Once made, although a renunciation can be retracted on the order of the court, the court is normally reluctant to do. In particular, where probate has already been granted to someone else, only in exceptional circumstance will the court allow such retraction.
Option 3 – Citations
Where the executor is unwilling to renounce, citation is a useful, non-contentious way to force the executor to take action in relation to the taking of the grant of probate. However, before issuing a citation, the citor needs to issue a caveat first.
There are 2 types of citations:-
1. A citation to accept or refuse to take a grant; and
2. A citation to propound the Will
Citation to accept or refuse to take a grant
Where an executor has failed to take any steps to obtain a grant of probate, the executor can be cited by the person next entitled to a grant to accept or refuse probate. If the executor fails to appear or apply for a grant, the citor is entitled to apply for a grant to him/herself.
Where an executor has intermeddled in the estate but has not taken a grant within 6 months of the testator’s death, the executor can be cited by any person interested in the estate. If the time limit for appearance has expired and the executor has failed to enter an appearance, the citor may apply for an order requiring the executor to take a grant within a specified timeframe or for a grant to him/herself or to a third party.
Citation to propound the Will
This may be issued by anyone who has an interest contrary to that of the executor.
If the time limit for appearance has expired and the executor has failed to appear, the citor may apply for an order for a grant as if the Will were invalid.
Procedure and requirements in respect of citations can be found in Rule 45 Non-Contentious Probate Rules (Chapter 10A)
Post Grant - What if the executor has taken out probate but subsequently refused or unwilling to administer the estate?
Option 1 - Inventory and account
The cheapest and quickest way to force an executor to account for his activities is by making an application to court for an order to compel him to exhibit inventory and account in respect of the administration.
Once obtained, the beneficiaries can examine the documents and consider whether any further steps will be required.
However, where the excecutor is simply uninterested to continue to administer the estate, beneficiaries may be better off focusing their attention on replacing the executor.
Option 2 – Removal of the executor
Section 33(3) Probate and Administration Ordinance gives the court the power to remove an executor and provide for the succession of another person in place of him/her if it is satisfied that the due and proper administration of the estate and the interests of the “persons beneficially entitled” requires it do so.
Section 36(3) of the Ordinance also gives the court the power to appoint some person to be the administrator of the deceased’s estate if it appears to the court to be “necessary or convenient “ to do so. What constitutes “necessity or convenient” is fact sensitive. [see Re Loo Che Chin (HCCA3131/2011)]
In the case of Chan Sau Heung v Kwan Siu Fai (HCMP2620/2012), Hon Poon J takes the view that the applicant should consider the following:
1. Whether removal of the grantee (executor) without revocation of the grant is sufficient. If so, then he should proceed under section 33(3);
2. Whether there are additional special circumstances that require revocation of the grant as well. If such circumstances exist, then he should proceed under section 33(1).
What constitutes additional special circumstances depends on the actual facts of the case. Examples include mental incapacity of the grantee; disappearance of the grantee who had not administered the estate; and exceptionally, the grantee wishing to be relieved of his duties.
This article is for information purposes only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances.
- Title Alias How to “execute” an Executor?
- Optional Description How to “execute” an Executor?
By Alfred Ip, Partner
Who can administer an estate?
The deceased’s estate can be administered by the Executor named in the Will of the deceased or an Administrator appointed by the Court.
If the deceased left no Will, who may be the Administrator of the estate?
This is called intestacy. In such circumstances, the persons having a beneficial interest in the estate can become an Administrator. The priority is as follows:-
2. Children, natural or adopted;
4. Siblings or issues to predeceased siblings;
6. Uncles or aunts or issues to predeceased uncles or aunts;
7. Official Administrator; and
Duties of an Executor/Administrator
The Executor or Administrator is entitled to administer an estate, and all the deceased’s assets will rest with that person pending distribution.
The Executor or Administrator owes duties to beneficiaries and creditors of the estate for due administration of the estate. Such duties can be broadly described as follows:-
a. Locating and safeguarding the assets;
b. Obtaining Grant of Probate/Letters of Administration;
c. Arranging payment of any tax, debts and expenses due;
d. Maintaining proper accounts; and
e. Distributing the estate to the beneficiaries.
What is Grant of Probate/Letters of Administration (Grant)?
A Grant is a legal document issued by the Probate Registry authorising the Executors to administer the estate.
According to section 60J of Probate and Administration Ordinance (Cap. 10), it is an offence if any person who, without lawful authority or reasonable excuse, deals with any part of the estate of a deceased person which is not set out in the schedule of property annexed to a Grant made to an estate.
What should I do before obtaining a Grant?
• You should locate all assets and liabilities in the name of the deceased, such as bank accounts, insurance policies, real properties and stocks and shares.
• You should inform the bank about the demise of the account holder, and ascertain the balance of the account as at the date of death.
• You should also find out whether the deceased owned a safe deposit box, apply to the Home Affairs Bureau for a certificate to open the box, and attend the inspection of the box.
• You should also ascertain whether the deceased owned any insurance policy, and notify the insurer promptly.
Where should I apply for a Grant?
You should go to the Probate Registry in the High Court, Hong Kong.
What should I prepare before making an application?
1. Gather all documents necessary to support your application; such as:-
a. death certificate certified by the Birth and Death Registry;
b. deceased’s will;
c. documents proving your relationship with the deceased, such as birth certificate or marriage certificate or adoption certificate; and
d. documents relating to the deceased’s assets;
2. Complete the appropriate forms prescribed by the Probate Registry
(click here to download the appropriate form);
3. Make an appointment with the Probate Registry;
When you apply for the Grant, you swear to the Probate Registry to:
1. Well and truly administer and faithfully dispose of, all such property and estate, rights and credits as the deceased at the time of his or her death was entitled to within Hong Kong;
2. Pay whatever debts the deceased did owe, so far as such property and estate, rights and credits, shall extend;
3. Exhibit a true and perfect inventory of all the estate and effects; and
4. Render a just and true account thereof whenever required by law so to do.
In the course of the administration of the estate, you owe duties to protect the interests of the beneficiaries and creditors of the estate. Such duties may include but not be limited to:-
o liquidating and closing all bank accounts;
o taking necessary measures to protect the assets;
o settling all debts and liabilities;
o Arranging to transfer the title of real properties to the beneficiaries;
o Distributing the estate to the beneficiaries.
What is my liability for being an Executor/Administrator?
If you fail to discharge your duties properly as an Executor/Administrator, you may be personally liable for people who suffer from your failure to discharge your duties.
Can I be remunerated for being an Executor/Administrator?
Unless the Will specifically provided for the same, you cannot be remunerated as an Executor/Administrator.
However, all expenses incidental to the discharge of your duties, such as professional fees, bank charges or other expenses properly incurred in the administration of the estate may be deducted from the estate.
Should I instruct a professional to administer the estate for me?
While it is not essential for you to engage a professional to administer an estate, it is advisable for you to do so, especially in the following circumstances:-
a. When the assets of the deceased spread across a number of countries, with very different legal and tax systems;
b. When the amount of the estate is substantial;
c. When there are a lot of beneficiaries; and
d. When your relationship with any of the beneficiaries is not harmonious.
The benefits of engaging professionals to administer the estate in any of the above scenarios outweigh the expenses for their retainers.
I do not want to be an Executor/Administrator. What should I do?
If you do not want to be an Executor/Administrator, you can either:-
i. Delegate your duties to a professional; or
ii. Renounce, i.e. give up your right as an Executor/Administrator
I live overseas and I cannot come back to Hong Kong and be the Executor/Administrator. What should I do?
If you cannot come back to Hong Kong to be an Executor/Administrator, you can either:-
i. Appoint an attorney to deal with it for you; or
ii. Renounce your right as an Executor/Administrator
If you have any other questions in relation to administration of estate, please feel free to contact us.
This Article is for information purpose only. Its contents do not constitute legal advice and readers should not regard this article as a substitute for detailed advice in individual instances. If you have any questions in relation to the matters contained in this Article, please do not hesitate to contact our Partners of the Probate and Estate Planning Practice Group of OLN.
- Title Alias Probate and Letters of Administration – FAQ
- Optional Description The deceased’s estate can be administered by the Executor named.
By Alfred Ip, Partner and Notary Public
Domicile is a concept which is so complex and novel that most people do not understand, and yet it plays an integral part in estate planning.
Domicile Ordinance came into effect on 1st March 2009. According to that ordinance, every individual has a domicile and a domicile only, and the court will determine an individual’s domicile based on Hong Kong laws.
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By Alfred Ip, Partner and Notary Public
In some intestate or resealing of foreign grant cases, the court would require guarantee1 to be provided by two sureties2 as a condition of issuing Letters of Administration in order to ensure due administration of the estate by the administrator. Such requirement has been removed in the UK as early as 1972, but it is nevertheless retained by the Probate Registry in Hong Kong.
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In an age when digital possessions are increasingly becoming an important part of our lives, questions arise as to who will own our online data? How can we make sure our loved ones can legally bequeath our online information?
Why is it important to pass on your digital footprints in a will?
Many of us are only concerned about passing on our financial assets, properties, cars and other valuables but we have overlooked the importance of passing on things like our emails, online accounts, photos, blogs, and contacts. Living in the age of the birth of machines, these ‘e-affairs’ are equally important.
It is very well for online providers to uphold users’ privacy. Without logins and passwords, our family may never be able to get access to our online assets. Social websites such as Facebook and MySpace offer the option for family to freeze the deceased’s profiles by way of ‘memorialisation’ but Flickr refuses all access. While some email providers, including Gmail and Hotmail, will give up the deceased’s password upon the proof of death and proof of relationship, Yahoo! refuses all access. A deceased’s e-affairs can forever be left undone if relatives have no access to these digital possessions.
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