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Will

ABCs of Charitable Giving

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The most beautiful bequests fulfil the dreams of their donors. Donors make charitable bequests in their wills in the hopes of leaving the world a slightly better place.

Types of bequests

Charitable bequests can be general, demonstrative, specific or residuary gifts. A general bequest is the gift of a specific amount of money or asset to a charity, without specifying how it should be used. A demonstrative bequest is a gift of a specific asset by the donor, such as an art piece, to a charity. A specific bequest is the gift of a specific amount of money or asset to a charity for a targeted purpose, such as funding for a research project. A residuary bequest is a gift of the remainder of a donor’s entire estate after all other bequests in a will have been made.

The type of charity that one selects may be cultural, environmental, scientific/medical, political or specifically targeted at a disadvantaged group/minority. For example, a donor may choose to support a cultural institution, such as a museum or a theatre, to promote arts and culture. They may choose to support an environmental organization, such as a wildlife conservation group, to protect the natural world. Scientific and medical charities, such as those focused on cancer research or disease prevention, are also popular choices. Political charities, such as those advocating for human rights or social justice, may also be considered. Finally, donors may choose to support charities that target specific groups, such as the elderly or those with disabilities.

Contact the charity

It is always a good idea to contact the charity directly to discuss a bequest in order to better understand their specific needs and their ongoing or latest initiatives. This can help ensure that the bequest is used effectively and efficiently and equally importantly, that the donor’s goals are aligned with those of the charity. Charities may also be able to provide guidance on the best way to structure the bequest, and may be able to offer recognition or other benefits (e.g., tax deductions) to the donor. The donor’s solicitor can review the guidance provided by the charity when drafting the donor’s will and/or trust document.

Targeted or general bequests can be made to specific charities, depending on the donor’s goals and preferences. A targeted bequest is a gift to a specific charity or research program, while a general bequest is a gift to a broader category of charities or causes. For example, a donor may choose to make a targeted bequest to a favourite hospital or research institution, or a general bequest to support medical research more broadly.

Perpetual/lump sum donation?

Perpetual or lump sum bequests can also be made. A perpetual bequest is a gift that is intended to last indefinitely, such as an endowment that provides ongoing funding to a charity. This type of bequest would require careful drafting by the donor’s solicitor in terms of ongoing management of the endowment fund. A lump sum bequest is a one-time gift of a specific amount of money or asset. Perpetual bequests can provide long-term support to a charity, while lump sum bequests can provide immediate/short to medium term funding for a specific project or initiative.

Always consider taxation

When making a charitable bequest, it is essential to consider taxation. In most jurisdictions, charitable bequests are eligible for tax deductions and possibly other benefits. Donor-advised funds, popular in the US and the UK, offer a flexible solution, allowing donors to make their gifts and then recommend how the funds are used over time. This approach can be particularly useful in instances where living donors are undecided about a specific charity but wish to take advantage of the available tax deductions immediately. The drawback is a loss of control over how funds are disbursed as the institution managing the donor advised fund takes control of the fund.

Bequests are revocable

If circumstances or affiliations change during a donor’s lifetime, the revocation of a charitable bequest can be made by asking a solicitor to help write a new will or a codicil to the existing will. This can be done at any time and can help ensure that the donor’s wishes are respected and their goals are achieved.

Charitable bequests can be a powerful way to make a positive impact. By understanding the different types of bequests, selecting charities that align with one’s goals and considering taxation and other implications, donors can ensure that their bequests are used effectively and efficiently to achieve a better world.

Disclaimer: This article is for reference only. Nothing herein shall be construed as Hong Kong legal advice or any legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.

The Three Instruments of Peace Simplified

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Similar to other major advanced metropolitan areas, Hong Kong is facing an aging population. As of 2021, the median age of Hong Kong’s population was 46.31. According to the Census and Statistics Department’s population projection, the percentage of elderly persons aged 65 and above in the population will gradually increase from 20.8% in mid-2022 to 25.3% in 2028, and then to 35.1% in 20692. The continued rise in the number of seniors therefore increases the demand for various elderly and healthcare services.

In light of this, the Government has been proposing more extensive life and end-of-life education to members of public, hoping to break the taboo surrounding discussions about death, helping people to view death in a positive light and raising awareness about the “three instruments of peace”, i.e., wills, Enduring Power of Attorneys (EPOAs), and Advance Directives (ADs).

Three instruments of peace are viz.:-

  • Will (also known as “平安紙”): the execution of a will is governed by the Wills Ordinance (Cap. 30). A will provides instructions on the distribution of the estate of the testator after he/she passes away.
  • Enduring Power of Attorney (EPOA): the execution, registration, powers and scope of EPOAs is governed by the Enduring Powers of Attorney Ordinance (Cap. 501). An EPOA seeks to appoint one or more attorney(s) to manage the financial affairs of a person when he/she becomes mentally incapacitated.
  • Advance Directive (AD): there is no specific statute addressing the execution and the power of scope of ADs. However, the Hospital Authority has published a recommended form of AD, and has also published guidelines for Hospital Authority clinicians. An AD seeks to address a patient’s desires about whether to receive life-sustaining treatments.

To promote the use of the “three instruments of peace”, the Government has already been subsidising and organising talks on life and end-of-life education every year. The Hong Kong Public Libraries collaborate with organisations to organise talks on life and end-of-life education every year, including talks on the “three instruments of peace”3. The Social Innovation and Entrepreneurship Development Fund (SIE Fund) also subsidises ventures related to life and death, education and the “three instruments of peace”4. It is hoped that if planning in different areas can be done in advance, better preparations can be made for the elderly and their families.

Although the concept of the three “instruments of peace” has been widely circulated among the community, it must be noted that in practical and precise terms, the execution, registration requirement, and the scope of the affairs to be covered vary for each of the three instruments of peace. Pitfalls could arise if they are not understood correctly. It is therefore hoped that the table below has summarised the requirements in order to assist members of the public:

 Will (also known as “平安紙”)  Enduring Power of Attorney (EPOA)  Advance Directive (AD)
FormNo prescribed form, but wills drafted by lawyers will take into account important details, e.g., more contingency plans in place for alternate executor(s) and/or beneficiaries  Must be made using the prescribed form  Not applicable
When does it take effect?  When the testator passes awayOn the date stipulated in the EPOA (usually when the attorney has reasons to believe the donor is becoming mentally incapable)When 2 doctors (the patient’s attending doctor and another doctor) confirm or certify that the patient is: terminally ill; in a persistent vegetative state or a state of irreversible coma; or in other end-stage irreversible life limiting condition  
Property and financial affairsExecutor can distribute the testator’s  estate according to the willAttorney may apply assets of the donor to: maintain the donor; prevent loss to the estate; maintain the attorney or other persons (e.g., where the donor is expected to provide for the needs of such persons); and make limited seasonal gifts to persons related or connected to the donor  Not applicable
Scope and restrictionsTestator may also express his/her wishes towards funeral arrangementsDonor may include any restrictions he/she likes on the attorney’s authority unrelated to health and welfare of the donor  Patient may decide whether to receive life-sustaining treatments.  
NOTE: Medical practitioners cannot perform euthanasia or carry out illegal instructions.  
Mental state at signing1. Of sound mind
2. Having mental capacity
3. Making the instructions voluntarily
4. Knowing the nature of the instrument and its consequences
Execution requirements  Execution before 2 independent witnesses, who do not have to be lawyers.  Execution before a registered medical practitioner and a solicitor (At the same time, or first before a registered medical practitioner and within 28 days before a solicitor).
Registered medical practitioner must certify that he/she was satisfied that the donor at the time of signing was mentally capable.
Solicitor must certify that the donor appeared to be mentally capable. 		Execution before 2 independent witnesses: First witness must be a registered medical practitioner, who could be a doctor treating or has treated the patient. Second witness must be 18 years of age. Confirm that the first witness has explained to the patient the nature and implications of the directive.
Independence of witnesses  A witness should not be a beneficiary under the will, otherwise the gift to that beneficiary will be voidWitnessing registered medical practitioner and solicitor must not be: the attorney; the spouse of the attorney; a relative (whether by blood or marriage) of the donor; ora relative (whether by blood or marriage) of the attorney  The 2 witnesses must not be beneficiaries under – the will of the patient; orany insurance policy held by the patient; orany other instrument made by or on behalf of the patient.
Requirement regarding execution by executor/attorney  An executor need not sign to confirm his/her appointment. Therefore, it is recommended that the testator discusses and informs the proposed executor of his/her appointment in advance.  Attorney must sign the EPOA before a witnessInapplicable
Requirement of registration  After the testator passes away, the executor shall arrange for applying for the grant of probate, and shall file the original will with the Court.  An attorney must bring the EPOA to the High Court for registration once he/she has reason to believe the donor is or is becoming mentally incapable. As a safeguard against abuse, the donor may decide whether he/she wants to receive or have other person(s) receive notifications of registration. One of the factors to consider before registration is that once an EPOA is registered, the record that an EPOA is created by a donor and the name of the attorney becomes public information.  No requirement of registration. The patient is recommended to provide family or close friends with a copy of the AD and inform them where the original is stored.
RevocationA will is generally not revoked unless: the testator enters into a marriage subsequent to the execution of the will; the testator executes another will to revoke the previous will; by written revocation executed in the same manner as the testator could validly execute a will; or the testator intends to revoke the will and he/she personally destroys or causes others to destroy the will in his/her presence and by his/her direction  When the donor is mentally capable, or after his/her recovery from mental incapacity, he/she may revoke the EPOA.   Otherwise, an EPOA is revoked in limited situations, for example- bankruptcy of the attorney; death of the attorney or donor; by an order or direction of the Court.By written revocation    

If you have any questions on the above, please contact the Co-head of our Elder Law practice Ms Helena Hu or our Associate Mr Dexter Yuen.

1 Census and Statistics Department. “Demographic Trends in Hong Kong 1991-2021” published [29 Dec 2022]. The Government of the Hong Kong Special Administrative Region. 29 Dec. 2022, https://www.censtatd.gov.hk/en/press_release_detail.html?id=5338. Accessed 24 Jun 2024.

2 Press Releases. LCQ6: Measures to cope with an ageing population. The Government of the Hong Kong Special Administrative Region. 22 Mar 2023, https://www.info.gov.hk/gia/general/202303/22/P2023032200177.htm. Accessed 24 Jun 2024.

3 Press Releases. LCQ6: Making the “Three Instruments of Peace”. The Government of the Hong Kong Special Administrative Region. 28 Jun 2023, https://www.info.gov.hk/gia/general/202306/28/P2023062800356.htm. Accessed 24 Jun 2024.

4 Press Releases. LCQ6: Making the “Three Instruments of Peace”. The Government of the Hong Kong Special Administrative Region. 28 Jun 2023, https://www.info.gov.hk/gia/general/202306/28/P2023062800356.htm. Accessed 24 Jun 2024.

Disclaimer: This article is for reference only. Nothing herein shall be construed as Hong Kong legal advice or any legal advice for that matter to any person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.

Ten Common Handwritten Will Mistakes

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Handwritten wills i.e., holographic wills are valid in Hong Kong and in most jurisdictions around the world. Perhaps the most famous holographic will was that of Napoleon Bonaparte, who seemingly had plenty of time on his hands while exiled on the island of St Helena in 1821. He wrote a whopping five long pages and numerous codicils by hand, which was the requirement under French law for a valid will, in the absence of a notary. After praising his loved ones and lashing out at each of his political enemies, he bequeathed to over 7,500 beneficiaries the contents of his entire estate, down to a pair of slippers. The beneficiaries were not only his immediate family members but everyone from his General Montholon (2 million francs) to regular soldiers (100 francs each) in his army. It took the executors of his will 40 years to complete their tasks. 

Handwriting your own will is likely to be easier than the task that Napoleon undertook, but here are some of the more common (but not all of the) pitfalls to avoid:

1. Not appointing a willing executor

There will be no one to execute your wishes in this instance and this will lead to administrative delays. The beneficiary entitled to your residuary estate has first priority to apply to be your executor by virtue of rule 19 of the Non Contentious Probate Rules in Hong Kong where there is no named executor willing to take on this role. Your residuary estate is the whole sum of your estate after deduction of your debts, taxes, funeral, legal and administrative expenses and distribution of your cash and specific gifts to your beneficiaries.

2. Being too specific or not being specific enough

You may bequeath your Rolex Explorer II watch to your son but you own two Rolex watches at the time of your death, none of which is the Explorer II. You may state clearly “I bequeath my grand piano to my cousin.” but it transpires that you have three cousins (who coincidentally all play the piano up to grade 8 level) at the time of your death. These are examples of gifts that are too specific or not specific enough.

3. Not updating your will 

If you marry, divorce, enter into a committed relationship or any combination thereof, there may be significant impacts on the validity of parts of your will. Some committed relationships that may be recognised under overseas laws are not recognised in Hong Kong. It is important to review your will at regular intervals in order to take stock of significant changes in your relationships and assets.

4. Writing only one will when you have substantial assets in another jurisdiction

The legal concept of domicile may be different from your birthplace, nationality and/or jurisdiction where you have permanent residency. Your domicile at the time of death affects your will. You may write a will in Hong Kong that can be overridden due to laws in another jurisdiction that do not allow you to leave out certain beneficiaries, for instance. It is important to consider the laws of the countries where your substantial assets are located.

5. Writing wills in every jurisdiction you have assets in but inadvertently revoking some of the wills

You may have carefully considered all your worldly assets and handwritten your wills in accordance with where your assets are located. One common pitfall is not making reference to your other international wills, such that your last will and testament referring to your assets in Canada may inadvertently revoke your prior last will and testament referring to the distribution of your assets in Hong Kong.

6. Improper execution of the will

In Hong Kong, two witnesses are required when you sign your will. They and their spouses may not be your beneficiaries. Your executor may be a witness to your will but again, this executor should not be a beneficiary if such executor is to be a witness to your will. In the absence of proper execution, the court must be satisfied that there is no reasonable doubt your purported will satisfies your testamentary wishes.    

7. Forgetting to appoint guardians including temporary guardians for your minor children

If both parents pass away, minor children without appointed guardians will become wards of the Social Welfare Department. It is important to consider appointing temporary guardians who reside in Hong Kong in the event that permanent guardians are overseas, again to avoid having children becoming wards of the Social Welfare Department during the time it takes permanent guardians to arrive in Hong Kong.

8. Forgetting to include back up beneficiaries, executors and guardians

No one knows with certainty when their time will come. It is entirely possible to outlive one’s beneficiaries, executors and/or appointed guardians, especially the longer that one lives. Some care needs to be taken to think through some possible alternatives in the event that these persons predecease you or refuse to act as your executor or as guardians of your children.

9. Keeping the will in your own safety deposit box at the bank

This is a very safe place to keep your will but is it too safe? In Hong Kong, singly and jointly held safety deposit boxes require a “Certificate for Necessity of Inspection of Bank Deposit Box”  issued by the Home Affairs Department before a deceased’s safety deposit box may be inspected. A bank official and two public officers authorised by the Secretary for Home Affairs must be present during the inspection. Keeping one’s will in one’s own bank safety deposit box (even jointly held) leads to administrative delay and this should be weighed against the security afforded by a bank safekeeping your will.

10. Not signing your will

Many people take the time to carefully put together a will and then trip up on the final step – they omit to sign the will properly or put off signing the will. This may be due to any number of reasons – not prioritising this important final step (life often gets in the way) or even due to an inability to find witnesses for the will. Unfortunately, an unsigned will is an invalid will.

The legal requirements for a validly written will are both easy and difficult to fulfill – easy in the sense that a handwritten will showing intention and capacity signed by an adult which is properly witnessed is a legal document in Hong Kong, yet difficult because there are some common pitfalls that many a do-it-yourselfer has failed to avoid.

Beat Napoleon Bonaparte and have your will professionally drafted. To celebrate the inauguration of our groundbreaking Elder Law Practice (the first of its kind in Hong Kong), we are proud to relaunch our hugely popular FreeWill initiative, an opportunity for Hong Kongers to have their wills prepared for a nominal donation to a registered charity. To find out more, visit our FreeWill campaign page.

Disclaimer: This article is for reference only. Nothing herein shall be construed as legal advice, whether generally or for any specific person. Oldham, Li & Nie shall not be held liable for any loss and/or damage incurred by any person acting as a result of the materials contained in this article.