Everything You Need To Know About Estate Administration And Executors in Hong Kong
We explain what the executor of an estate does, who can be one and how to appoint one
Yesterday, we discussed the importance of drafting a will with a lawyer. If done without legal advice it may give rise to potential issues such as unintentionally subjecting your beneficiaries to litigation. Today’s article we move onto the next step after you have decided to draft a will: administrating your estate and appointing a nominated executor within the will.
When it comes to administering an estate, you may wish to appoint a nominated executor. In this article, we’ll explain the role and responsibilities of an executor in Hong Kong.
What Is An Estate Administrator/Executor?
An executor is a person appointed to administer a deceased’s person’s estate. They can either be named in the deceased’s will, or else be appointed by the court as required. Although not typically remunerated, an executor has the right to deduct any expenses that they may incur during their duties, for example bank charges or professional fees, from the estate.
What Are The Duties Of An Estate Administrator/Executor?
While specific duties vary from case to case, broadly speaking, an executor’s role is to manage the deceased’s estate until their assets are distributed according to their will. This management can include the following:
- Identifying, locating and safeguarding assets
- Closing bank accounts
- Keeping detailed accounts of the estate
- Applying for grant of probate or letters of administration (more on this below)
- Paying any outstanding debts owed by the deceased, for example taxes or other debts outstanding to creditors
- Ensuring that the terms of the will are fulfilled, by distributing the estate to the beneficiaries
It is important to note that estate administrators can be held personally liable for any loss that arises from their failure to discharge their duties correctly, and so an executor’s role should certainly not be undertaken lightly.
Who Can Be An Estate Administrator/Executor?
This depends on stipulations made in the will. If the deceased has specified an individual to act as estate administrator, then they will typically be appointed as such. On the other hand, if someone dies without a will, the estate is then described as “intestate”, and an executor must be chosen – this will usually be someone who has some interest in the estate.
Administrators are chosen in order of priority:
- The widow(er) of the deceased
- Their children
- Their parents
- Their siblings, or their sibling’s children if there are no surviving siblings
- Their grandparents
- Their aunts or uncles, or cousins if there are no surviving aunts or uncles
- Official administrators appointed by the court
- Their creditors
Exceptions To Executor Duty
Of course, you may look at the above list of duties and simply decide that an executor’s role isn’t for you. Perhaps you live outside of Hong Kong, and so are unable to discharge the duties here, or maybe you are simply too busy to take on the additional responsibilities of the role. In the event that you are unwilling or unable to discharge your executor’s duty, you have two options: renounce your right to be the estate administrator entirely or delegate the estate administration role to a lawyer.
Appointing A Professional Administrator
Many people decide that the best course of action is to delegate their executor’s duties to a professional estate administrator. This can be especially helpful when dealing with expatriate estates, or those in which the deceased had assets in multiple territories with varying legal and tax systems.
It may also be helpful to turn to a lawyer for advice if:
- There are a large number of beneficiaries to the estate
- The estate is of a particularly high value
- If there is conflict within the beneficiaries
In these more complex situations, a third-party administrator’s fees are offset by the peace of mind gained from knowing the estate – and any complications arising from its administration – is being professionally managed.
Grant of Probate/Letters of Administration
Whoever you choose as executor will require a grant of probate, also known as letters of administration, issued by the High Court’s Probate Registry. It is an offence under Hong Kong law to proceed with estate administration until this document is issued; however, obtaining this paperwork is a relatively straightforward process.
First, gather all the deceased’s asset and liability details – this may include property deeds, shares or insurance policies.
Contact the deceased’s insurance companies and bank(s) to notify them of their death. The bank can then confirm the balance of any accounts held in their name. The bank can also confirm whether the deceased held any safe deposit box in their name. You will need to apply to the Home Affairs Bureau to open this.
During Your Appointment
Once you have obtained the above information, you will need to make an appointment to attend the Probate Registry at the High Court, on Queensway.
Bring the following documents to your appointment, if available:
- Death certificate
- A copy of the deceased’s will
- Any document proving your relationship with the deceased, for example a marriage, or a birth certificate
You will also need to provide specific forms relating to the disposal of the deceased’s assets, and these may be downloaded from the Judiciary Court Services & Facilities.
During your appointment, you will be required to swear an oath to the Probate Registry, specifying that you will administer the estate to the best of your ability, be responsible for settling any debts owed from the estate, and provide accurate accounts and inventories of the estate’s particulars when called upon to do so.
Once this is completed, you will be issued with the necessary grant of probate, enabling you to begin the process of administering the estate.
For more information on Estate Administration, please contact us.
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.