People ask me a lot, before I have even met them how much it would cost to put a will in place and can underestimate the power of the will. Don’t get me wrong, of course it is important to know how much you pay for the document BUT it is more important that you know how much it would cost you (your estate) if you don’t.

When we write a will, we leave someone in charge – Executor – and provide direction as to how our assets should be distributed with named beneficiaries. There are instructions in place to guide the Executor and they can appoint a probate lawyer to handle the final paperwork to make the process easier.

Therefore, it is important to let people know where we keep the will AND to leave a list of what we owe and own through a schedule of assets and liabilities.

Writing your Will in Hongkong can cost anything from HK$2,000 – if you know what you are doing and don’t need advice – important emphasis on this as you would not be here to argue about any mistakes – up to HK$20,000 – with advice and guidance – many mistakes are made by not understanding the probate process and can cause needless financial stress for the ones you leave behind.

The overall probate process time would be reduced as efficient documentation is in place and can save costs. Probate costs can be anything from 1% – 7% of your estate value so the more you have constructed in your estate plan, the less this will cost your estate. Probate lawyers (with a will) charge around HK$40,000 – HK$60,000.

So, by writing your will and having a schedule of assets would cost you (your estate) around HK$80,000 entirely.

For a start, without a will, your loved ones would have to decide who would be in charge of your estate (administrator) which can cause conflict within families (our loved ones would argue about who should be in charge or worse still, no one wants to administer your estate, leaving it open until someone takes over.) Then a lawyer would have to be appointed and without a will, the legal fees will double. Your family are now facing a bill of HK$80,000 – HK$120,000 to acquire your assets.

Most times, our loved ones have no idea what we own entirely so how do they know what to collect? It is usually easy to establish our bank as we have ATM cards and if we are employed, families can ask HR to see if there is life insurance within the company. HK has compulsory MPF so we can ask the MPFA for information using our HKID. If we own a property, the land registry can be checked for ownership details – but what if we have a mortgage? How would loved ones know of the lender?

What about everything else? Personal life insurances, investments, pensions, stocks and shares, ETF’s, cryptocurrencies, Bitcoin, overseas assets …

If our loved ones have to appoint someone to find our other assets, this costs more money. If there are loans outstanding, then this can cause further interest charges – our loved ones don’t know about the debt/s so don’t make arrangements to pay and the lenders can impose penalty charges. If there is a mortgage outstanding, the lender can threaten to repossess the property. If lenders know we have assets, they can put a lean them – meaning that your loved ones have to pay them first.

Not to mention the time delays in trying to find out what we own and owe. This makes your probate process more towards the cost of 7% of the value of your estate.

The artist Prince died without a will and his estate has already paid out US$45,000,000 in expenses (administration and legal fees) and not a penny to heirs yet – his estate was worth around US$200,000,000 when he died…

Much, much more than if he put his instructions in place beforehand.

A lot of people also think they have to be old to write a will but my advice is to say that if you own assets that you want to give to others and save them time and costs, you should write a will, no matter what age.

Building a legacy is hard but passing it on is easy.

Recommend0 recommendationsPublished in Hong Kong, Death
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