If a loved one passed away, who could administer their estate?
It would depend on whether the deceased left a Will. If the deceased left a Will, the executor appointed in the Will is entitled to administer the estate.
If the deceased did not leave a Will, he/she would have died intestate. The question regarding whom could administer the estate would be governed by the law of intestacy. According to Rule 21 of the Non-Contentious Probate Rules (Cap. 10A), the order of priority is as follows:
1. Spouse;
2. Children, or the issues to predeceased children,
3. Parents;
4. Siblings, or the issues to predeceased siblings;
If no one in the above 1 – 4 survived the deceased, then
5. Grandparents;
6. Uncles or aunts, or the issues to predeceased uncles or aunts;
If they have a beneficial interest in the estate. If no one has a beneficial interest in the estate, then
7. Official Administrator; and
8. Creditors
As an executor or administrator, what do I have to do?
The executor/ administrator of an estate owes a duty to the beneficiaries and creditors of the estate. In order to effectively administer an estate, the executor/ administration would have to:
Ascertain the assets and liabilities of the estate;
Locate and safeguard the assets;
Apply for a Grant of Representation from the Probate Registry;
Collect in assets, paying off liabilities including but not limited to tax, debt, testamentary and funeral expenses due from the estate;
Keep proper accounts of the estate; and
Make distribution of the estate to the beneficiaries.
The golden rule to administration is “act in the best interests of all the beneficiaries” !
As an executor or administrator, can I get paid?
The expenses incurred by the executor/administrator in relation to administration of the estate could be reimbursed out of the estate. But an executor/administrator cannot be paid for their services unless:
However, there is nothing to prevent an executor/ administrator to enter into a remuneration agreement with all the beneficiaries for him/her to get paid.
Who are the beneficiaries of the estate of a deceased person? What are their entitlements?
If the deceased person died leaving a Will, then the identity of the beneficiaries and the allocation of the estate would be in accordance with the Will.
If the deceased person died without leaving a Will, then the entitlement of the estate would be in accordance with Section 4 of the Intestates’ Estates Ordinance (Cap 73):
Then the remaining residuary estate would be divided into half, with one half to the spouse and the remaining half to the issue(s), in equal shares if more than one.
Illegitimate children of deceased persons who died after 19 June 1993, have the same sucession rights as legitimate children.
Then the remaining residuary estate would be divided into half, with one half to the spouse and the remaining half to the parent(s), in equal shares if both survived the deceased. If both parents predeceased, then the remaining half to the sibling(s), in equal shares if more than one.
For other scenarios, feel free to contact us for a quick consultation.
If my spouse left nothing to me under his Will, do I have any recourse?
We have full testamentary freedom in Hong Kong, but according to the laws of Hong Kong, we also have to make financial provisions from our estate to our spouse and those who are dependant on us financially. Under the Inheritance (Provision for Family and Dependants) Ordinance (Cap 481), certain people are eligible to make a claim out of the estate if they are not financially provided under the Will or under the laws of intestacy. A spouse is under the eligible class of people to make such a claim, but the claim has to be made within 6 months from the issuance of the Grant of Representation.
What is mental capacity?
Mental capacity is the mental ability of a person to make a particular decision or carry out a certain action. Mental capacity is task-specific, which means that a person could be mentally capable of making some decisions (e.g. making welfare decisions for him/herself) but mentally incapable in another area (e.g. managing their own financial matters). Legally, it is presumed that a person has capacity unless it is shown otherwise.
My mother is exhibiting symptoms of dementia, does it mean she cannot manage her financial affairs?
As mentioned above, mental capacity is task-specific. Just because an individual is displaying symptoms of early dementia does not mean he/she is unable to manage their financial affairs. If you are in doubt, it is best to have the relevant individual assessed by a medical practitioner to find out.
What should I do if my husband is assessed to be mentally incapable to manage his finances?
If your husband has previously executed an Enduring Power of Attorney (“EPA”), then the Attorney validly appointed in the EPA could step in and handle his property and affairs. It should be noted that an EPA must be registered with the High Court for it to be valid after your husband became mentally incapacitated.
If your husband did not execute any EPA, a Committee could be appointed by the Court under Part II of the Mental Health Ordinance (Cap 136) to manage and administer his property and affairs. It should be noted that a Committee does not have the power to make welfare decisions for your husband (i.e. authorize any medical or dental treatment, or make any decision regarding the husband’s residence etc).
What could be done if my friend is mentally incapable to make welfare decisions for himself?
If a person is mentally incapable to make welfare decisions for him/herself, a guardian could be appointed by the Guardianship Board to make welfare decisions for him/her.
In general, organisations such as elderly homes or hospitals would take instructions from next-of-kin. But in situation where there is no next-of-kin, or where there is conflicting views between the family members, it might be necessary to apply for a guardianship in order for a valid decision to be made for or on behalf the mentally incapacitated person.
Is there any advance planning that I could do to avoid a Committee or a Guardianship application?
In Hong Kong, an individual (“the Donor”) could appoint an attorney to handle his/her financial matters in the event of his/her mental incapacity. The Enduring Power of Attorney is governed by the Enduring Powers of Attorney Ordinance (Cap.501), and has to be executed in a specified format and method as stipulated by law. An EPA executed in Hong Kong could only be used to handle assets in Hong Kong, and does not cover welfare decisions (i.e. an attorney appointed in an EPA could not make welfare decisions for the Donor). Despite its limitations, the EPA is a relatively uncostly way to ensure the Donor’s assets could be managed in the event of mental incapacitation.