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Probate and Estate Planning

Problems for Your Family by Not Leaving a Will

By Emily Chow & Sherry Ng

When someone passes away without having put into place a valid will, the ‘Law of intestacy’ governs the administration and distribution of their estate. In Hong Kong, the two key pieces of this legislation are the Intestates’ Estates Ordinance (Cap. 73) (the “IEO”) and the Non-contentious Probate Rules (Cap. 10A) (the “Rules”).

Before dealing with the deceased’s estate, a Grant of Letters of Administration must be obtained from the Probate Registry. Individuals who are allowed to apply for a Grant of Letters of Administration of the deceased’s estate are those set out in rule 21 of the Rules, in the following order of priority:

1.    A surviving spouse
2.    Children
3.    Parents
4.    Siblings
5.    Grandparents
6.    Uncles and aunts.

Those who are successful in obtaining a Grant of Letters of Administration are the administrators and are empowered to deal with the estate in accordance with the IEO.

After obtaining the Grant of Letters of Administration and having arranged for the funeral of the deceased, the administrator should first collate all the assets of the deceased and settle any debts and expenses. After that, the administrator should distribute the estate to the beneficiaries in accordance with section 4 of the IEO, with the table below illustrating some examples of entitlement under section 4 of the IEO.

Order of Entitlement When There is No Will

 

Surviving Relatives

Status of Other Relatives Entitlement Arrangement

1. 

Spouse No issue* of the deceased, parent, full sibling or issue* of full sibling  All to the surviving spouse

2.

Spouse and issue* of the deceased Other relatives immaterial

The surviving spouse takes the personal chattels, HK$500,000 and half of the residuary estate.The other half is held on statutory trust** for the surviving issue*.

 

3.

Spouse and one or more of the following relatives, namely:

  • parent or
  • full sibling or
  • issue* of full sibling 
  The surviving spouse takes the personal chattels, HK$1,000,000 and half of the residuary estate. The other half is held for the surviving parent(s) or on statutory trusts for the surviving full sibling(s).

4.

Issue* of the deceased No spouse All to the surviving issue* on statutory trust. 

5.

Parent(s) No spouse, no issue* of the deceased All to parent(s)

6.

Full siblings No spouse, no issue*, no parent All to full siblings on statutory trusts**

7.

Half siblings No spouse, no issue*, no parent, no full siblings All to half siblings on statutory trusts**

8.

Grandparent(s) None of the above All to grandparent(s)

9.

Full uncles and aunts None of the above All to full uncles and aunts on statutory trusts.

10.

Half uncles and aunts None of the above All to half uncles and aunts on statutory trusts.

11.

None of the above relatives

 

All to the Hong Kong Government as unowned property.

*Issue in succession law means the descendant of a person, such as children and grandchildren.
**For details on statutory trusts, please refer to the IEO 

Despite the prescribed entitlement under the IEO, beneficiaries of an estate may sometimes redistribute their entitlement through a Deed of Family Arrangement executed by all beneficiaries and setting out the agreed redistribution of the deceased’s estate. Do note though that the redistribution through a Deed of Family Arrangement may attract stamp duty. 

While the law prescribes a specific priority for the distribution of an intestate’s estate and may leave certain wiggle room for beneficiaries to alter their entitlement, it would certainly be useful to make a valid will to ensure your estate will be inherited exactly as planned. 

If you have any questions or would like to obtain further information on our probate and estate planning services, please contact one of the members of our Probate and Estate Planning team, who are listed here: https://oln-law.com/probate-estate-planning.  

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.

January 2021

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