Because you never know what tomorrow will bring…
We all know that wills are something grownups are supposed to have, but how many of us actually have one? While it’s true that wills may be less relevant to those who are single and/or those still in the process of building up their assets, that will all change as soon as you get married, have kids or come into a significant amount of money and property. As such, it’s worth familiarising yourself now with the ins and outs of making a will. After all, preparation is key!
Ahead, we’re breaking down everything you need to know about the process of putting a will together. Keep reading for more.
What Exactly Is A Will?
A will is the instrument by which money, personal items or real estate is distributed after your death. It is also how you formally appoint guardians to look after your kids if something happens to you.
Why Do I Need A Will?
If you are an expat with no relatives in Hong Kong, appointing a guardian and temporary guardians for your children is the number one reason to arrange the drafting of your wills. However, this is not the only reason. If you die and don’t have a will, then your assets fall “intestate”, meaning that the law in the country where the assets are held will be imposed. These vary from country to country, and state to state in places like the US, Australia and Canada.
In Hong Kong, the law states that a statutory amount ($500k at time of writing) will pass from husband to wife or vice versa. Everything else will be split between your spouse and any children you have. What this might mean if you don’t have a will is that you are limiting your spouse’s ability to control how and when assets are distributed to your children. If you do not have children then your parents, or even your siblings, might receive a portion of your estate.
If you are unmarried and were to die without a will, all of your bank accounts would be frozen (this may include joint accounts too!). Access would be restricted until probate releases the funds. Without a will, this could take years.
What Do I Need To Consider When Making A Will?
From physical assets to money and children, there’s a lot to consider when putting together your will. Here’s a rundown of some of the most important issues to cover.
If you have assets outside Hong Kong, you may need a separate will in that country. For those who die here, you ought to mention where you would prefer to be buried and make sure those wishes are known. It’s also very important to take into consideration any inheritance taxes at this point as well. You want to ensure any transfer of assets goes smoothly and that there’s enough money available to pay these taxes if required. It’s definitely worth thinking about these factors now and working out ways to mitigate their effect.
For LGBTQ Couples
Your partner or spouse needs to be specifically mentioned in a will, especially given the fact that in Hong Kong law, there’s a grey area about the acceptance of same-sex marriages. If you have kids, both partners need to make sure that they are legally associated with them (whether genetically related or not).
For Married Couples
Will everything go to your spouse? And will they get it as soon as possible? What if you have assets owned with your family or from before the marriage, what happens to them? A will can make this a smoother, more transparent process.
For Single People And Unmarried Couples
Make sure that assets go to the people or places you want. This includes assets you own now or will own in the future and also any insurance that you have independently or through your work. If you are in a relationship and not married, your partner will have no legal claim on your estate unless there is a will in place.
First and foremost, you need to name a guardian. If no guardian is appointed, your children may become “wards of the state” and there is a chance that they might end up in state-run care if both parents are deceased. Families who are geographically isolated from their extended family are particularly at risk when things go wrong. There is no legal status for Godparents for instance. Any guardians must be stated in a legal document in order for them to be allowed to step in.
Keeping Your Will Updated
The awkward conversations and thoughts that go into making a will can put most people off the process altogether. But it needn’t be that painful. And when drafted correctly, it should be able to last you a long time (unless things change drastically).
We recommend storing your will at the will writers in order to keep it from loss or damage. They’ll also be able to send a reminder to double check that the will is up to date and ensure that any changes in your circumstances are accurately represented. Being reminded to do this is incredibly helpful and stops lapses which might cause problems!
For the majority of people, a simple will and guardian documents will suffice for their assets here.
If you would like a chat about your particular circumstances and your need for a will, please contact Eleanor Coleman on 9885 2192 or email [email protected].
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