Like an umbrella you'd bring on what looks like a rainy day, a legally binding will functions as a protection of your assets, as ultimately, you'd want your assets to be managed and distributed the way you wish.

Will – What is it and How it Works?

"Essentially, a will is a legal document which will take effect upon the death of the testator, and will set out whom he/she wishes to appoint to manage and distribute his/her assets after death," said Pearl Lam, legal consultant at Withers Worldwide. "While any mentally sound person aged 18 or over can draft his/her own will, for the will to be effective and beyond challenge after the death of the testator, it is  important to ensure that the will is drafted with clear and concise language and that the will is  properly executed, without room for disputes regarding the will's validity or interpretation." Under the existing law of Hong Kong, those who witness the execution of the will are not allowed to be included as a beneficiary of the will.

How Effective is the Will?

To ensure the effectiveness and indisputability of the will, the documentation of the testator's wishes must be clear. "It's wise to seek legal advice before drafting the will as technicalities may arise, depending on the nature of the assets. For instance, if you have a landed property held through a company in Hong Kong, then you should gift your shares in the company, not your shares in the landed property, to your designated beneficiary in your will."

It is important to note, however, that the will also has its shortcomings. "A will must undergo probate procedure, which can cause inconvenience to any family members who are fully dependent on the deceased for their living, as the assets will be frozen until the grant is issued," explained Lam.

Trend of Will Establishment

Gone are the days when establishing a will was something only senior citizens felt compelled to do. "We see people as young as 35 years of age drafting their wills, possibly because people nowadays are more aware of the importance of wealth planning," said Lam. "It's particularly true in the case of landed properties. For landed properties situated in Hong Kong owned by two or more persons, the title to the property may be held as either joint tenants or tenants in common. In the case of joint tenants,  the ownership of a deceased person's share will pass on automatically to the surviving tenant. However, in the case of property held as tenants in common, a deceased owner's share will pass to his/her successor according to the terms of his/her will. This is where the will becomes useful: most people use a will if their assets are held in a structure which doesn't allow automatic transfer of share ownership."

With the unpredictability of life, a will goes a long way in ensuring the proper management and execution of your assets in an undisputable manner. So there, one thing off your list of things to worry about later in your life!

Special Thanks:
Pearl Lam, legal consultant at Withers Worldwide