And don’t forget about guardianship documents as well.
As a new parent, there seems to be a never-ending list of things to do and learn. With all the day-to-day responsibilities and worries, organising legal documents might seem like the last thing you want to tackle. A while ago, I wrote about 5 things to do before you become a parent and having a will and legal guardianship in place for your kids should be top of your list, no matter if they are eight days, eight years or approaching eighteen.
Why do I need a will?
A will is an 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.
In Hong Kong, the law states that a statuary amount ($500,000 at the time of writing) will pass from husband to wife or vice versa. Everything else will be split between your spouse and children. 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. It is also worth noting that you can specify in a will when your kids are given access and responsibility for managing any assets that you want to leave them – this could be based on age or milestones in their life, for example, when they turn 18 or when they finish university. A very young adult having access to a lot of money might not do them any favours, so most of my clients decide age 25 is about right. Not only that, who do you want to be able to help them and control the assets?
Whilst you might have a will in your home country if you are an expat, it is always good to make sure that this would cover your assets in Hong Kong and that any guardianship provisions would apply here.
Why do I need to appoint a legal guardian for my kids?
It’s hard to imagine but if something were to happen to both parents, kids under 18 years of age will need a legal guardian to look after them. This includes looking after their daily wants and needs, as well as making legal and financial decisions on their behalf.
Guardians are appointed either as part of the will or as separate legal documents that are held apart from the will (which might be sent to the courts for probate) and enable your trusted guardian to have immediate access to the children in the event of the death of both parents.
What happens if there is no guardian?
In short, this is a massive problem. If you are a parent (or planning to be one) and do not have a will or guardianship documents, you need this to move to the top of your to-do list.
If no guardian is appointed, your children become “wards of the State”. If both parents die, there is a good chance that your kids might end up in State-run care, for example at Po Leung Kuk orphanage, until the courts appoint a guardian. The Hong Kong courts would then consult with each remaining family member to gauge their opinion and this can take a long time. If there is any disagreement, this process can be incredibly tedious and drawn out and the kids would remain in care until it is settled. There are specific limitations on visiting kids in care until the matter is resolved, which would be incredibly distressing at a point in their lives when they are grieving and missing their parents.
In a lot of cases, the father’s family is given more preference in getting guardianship due to traditional HK laws which might not be what you want or what is best for the kids.
Why do I need to appoint a temporary legal guardian?
As well as appointing a permanent guardian, it might be relevant to appoint a temporary guardian too. If you are an expat with no relatives in Hong Kong, appointing a guardian and temporary guardianship for your children is the number one reason to arrange drafting of your will and something that clients overlook.
Families overseas who are isolated geographically from their extended family are particularly at risk when things go wrong. There is no legal status for Godparents, guardians and temporary guardians, so they must be stated in a legal document in order to step in.
For example, when my husband and I looked at how we wanted our will to be structured, we took into consideration where our kid’s guardian lives and how long it would take him to get to Hong Kong. For us it was easy as my brother lives in Macau but, as he travels for work, we wanted to make sure there is a backup guardian in case he is away.
Read more: 5 Tips To Help You Adapt To An Empty Nest
How it varies for different cases
You need a will and clear guardianship paperwork particularly if there is an estrangement between you and the other parent. It may be better for your children to be cared for by someone other than their remaining parent if something happened to you or if there is no other parent. In cases like this, you need to make sure you have specified the friend or family member who will take over (and anyone else who might be involved in making financial, legal and parental decisions).
Your partner or spouse needs to be specifically mentioned in a will and guardian documents, as there is a grey area in Hong Kong law about the acceptance of same-sex marriages. If you have kids, both partners need to make sure that they are legally associated with them (genetically related, legally adopted or not) so that either one will be recognised as a parent/legal guardian immediately if one spouse dies.
Will everything go to your spouse? Will they get it as soon as possible? A will can make this process (which can take months, or even years) smoother. What happens to assets owned with your family or from before the marriage? It can seem hard to make a decision on which side of the family the kids would go to. It can be a tough conversation to have, but it is vital that both parents agree.
Second (and more) marriages and blended families
When there are multiple marriages, step-children and half-siblings, it is vital that the division of assets is written down. When there is a death, families can be torn apart by unclear wishes especially with more than one party assuming a claim. Get it in writing. It will save a lot of problems in the long term.
If you have assets outside Hong Kong, you may need a will in that country. For people who die here, you ought to mention where you would prefer to be buried or cremated and make sure those wishes are known. It is also very important to note that you will need to take into consideration inheritance taxes at this point as well.
As a Brit, I want to make sure that my assets pass to my husband and kids smoothly and that there is money available to pay these taxes. It is worth taking these factors into consideration now and working out ways to mitigate their effect. If you have become a non-domicile and made Hong Kong your home, what you put in your will can be very important. Even something as simple as stipulating that your ashes be spread in the UK could change your inheritance tax bill, so it is vital to get proper advice.
Keeping your will updated
The awkward conversations and thoughts that making a will can bring up may put people off, but it need not be all that painful. I worked with Peter Fenyves, our in-house Wills and Estate Planning specialist at St. James’ Place, to make sure that ours was done properly. When drafted correctly it should be able to last a long time (unless things change drastically).
My husband Sean and I have appointed my brother as a guardian if something were to happen to us. He lives close by. What happens if that changes? The next 10 years are bound to bring changes in our lives, including potentially more kids, more assets (I hope!) and a need for temporary guardians.
Being reminded to do this is incredibly helpful and stops lapses which might cause problems. By storing these documents at the will writers, you can keep it from loss or damage. They will also send a reminder to double check it is up to date and ensure that any changes in your circumstances are accurately represented.
For the majority of people, a simple will and guardianship document will suffice for their assets here and make sure that you and your family are protected.
If you mention that you are a Sassy Mama reader, I am happy to extend a 20% discount to you and your family. Let’s have a coffee and a chat and see how I can help to make this process simpler, cheaper and painless!
Other solicitors and will companies are available. In the past, some of my clients have used Hugill and Ip Solicitors who can be reached at firstname.lastname@example.org. Also, Professional Wills in North Point may be able to help. You can reach them on [email protected].
No matter which company you choose to go with, if you haven’t done so already, it is time to get around to making a will and legal guardianship document for your children.
Featured image courtesy of Anna Shvets via Pexels, image 2 courtesy of Myriams-Fotos via Pixabay, image 2 courtesy of StockSnap via Pixabay, image 3 courtesy of Mojpe via Pixabay, image 4 courtesy of Ryan Crotty via Unsplash, image 5 courtesy of rafabordes via Pixabay, image 6 courtesy of Engin Akyurt via Pexels.