International Estate Planning: Worldwide Wills vs Multiple Wills

Contributed by Hugill & Ip Solicitors, 06 January, 2021

Written by Alfred Ip, Partner at Hugill & Ip Solicitors

In the past decades, the number of expats has dramatically risen, reaching a total global population of about 230 million people who live in a country other than their country of origin. Explosive growth in emerging markets has created a significant demand for companies to move their employees around the world to explore and seize new opportunities. There are already over 9 million U.S. citizens and almost 5.5 million British nationals who live and work abroad, we are also seeing a huge increase in the number of expats retiring in foreign countries for various reasons, including new lifestyle choices, lower costs of living and efficient medical care.

Given its unique history, Hong Kong has long been a territory where many foreigners settle and one where many locals migrate overseas. Currently there are about 650,000 foreign residents in Hong Kong, in addition to 1 million residents originally from Mainland China that have made the territory their permanent home.

With increasing wealth in the past 30 years, the portion of Hong Kong residents who hold assets in foreign countries has grown tremendously.

The number of expats, locals and Mainland Chinese in Hong Kong who need cross-border Estate Planning is considerable, so is the value of assets in the hands of these individuals. When putting in place a Will it is important to keep in mind the potential complications that might arise from administering an Estate which has a component of overseas assets.

What is the main difference between worldwide and multiple Wills?

A worldwide Will - also known as multijurisdictional Will - is a testamentary document that governs the succession of assets located in several jurisdictions and part (or all) of the testator's worldwide Estate. Multiple Wills - sometimes also called "situs" Wills - on the other hand are a series of separate testamentary documents for assets located in different legal jurisdictions, which are typically executed in that jurisdiction in accordance with local succession laws and regulations. The former covers all testamentary needs with a series of separate Wills, which take effect and are handled separately.

Pros and cons to consider

Each situation and location can involve substantial differences to achieve the best Estate Planning solutions that fit a specific testator's situation. An experienced Private Client lawyer is in the position to make a judgment as to the advantages and disadvantages of using a single worldwide Will compared to a series of separate multiple "situs" Wills.

Generally speaking, multiple Wills deal specifically with assets in each particular jurisdiction, ultimately minimising delays and conflicting laws. However, there are several factors that should first be considered:

There can also be some significant disadvantages to think about:

The benefits of using separate multiple Wills can sometimes help to limit costs of probate fees. Limiting the probate process to assets covered by the Will can avoid the chance of local probate fees being charged on the worldwide Estate and probate fees being paid in multiple jurisdictions on the same assets. Moreover, a greater level of privacy and confidentiality is guaranteed if during the probate process there's only an obligation to disclose asset values administered under the separate multiple Wills, as opposed to assets held globally.

Separate multiple Wills can be drafted in the local language and comply with local rules and requirements, this will help ease the overall administration process when dealing with local executors and courts.

Final thoughts

To prevent costly and lengthy disputes which can significantly reduce the size of an Estate, it is imperative to thoroughly consider all the specific circumstances, issues related to the testator and his/her asset type and location. Whilst in most cases it is desirable to have a single Will covering all eventualities and having a single jurisdiction to cover the probate process, separate multiple Wills can also be used effectively when some of the above mentioned scenarios are involved.

Ultimately it will be to the discretion of the testator, after carefully considering the advice provided by a Private Client lawyer, to establish which option to take to achieve the most efficient international Estate Planning. If multiple Wills are made, they should be managed by a Private Client lawyer to make sure that the originals of those Wills are properly stored and reviewed regularly.

In any event and for either type of Will, it is necessary to put in place a coordinated and seamless preparation to reap the benefits of a well-drafted Estate Plan, that is easier to administer and doesn't leave room for later disputes.

Our Private Client, Probate, and Trust team at Hugill & Ip has extensive experience in dealing with Wealth and Estate Planning issues, as well as trusted connections with other legal professionals based in other jurisdictions - so kindly get in touch with our solicitors to find out how we can help.

Tags: Wealth | services | legal services |

 

 





Articles Archive