Ask Melanie

Consider all the angles when preparing a will

Melanie Nutbeam, a certified financial planner based in Hong Kong, addresses common personal finance queries. Send your questions to

PUBLISHED : Monday, 21 January, 2013, 12:00am
UPDATED : Monday, 21 January, 2013, 3:49am

My wife and I are equal owners of our company. My will provides for my share of the company to pass 50 per cent to my wife and 50 per cent to my three children. Our home is in both our names. If something happens to me or my wife what happens to the company's assets?

If you die and your wife survives you, she will own 75 per cent of the company shares and your three children will share 25 per cent equally. Likewise, if your wife dies first you will own 75 per cent of the company and your children will share 25 per cent equally.

The cash and shares will remain in the company until you or your wife decide otherwise.

The survivor will need to consider how to provide for the passing of their majority holding after death, or make changes to the shareholding while alive.

Terry Wong, a specialist at The Hong Kong Trust Company, adds: "If the husband and wife die at the same time and the wife's will mirrors the husband's, shares in the business will default to the children. If the children are minors, a guardian should be appointed to make decisions about the company's operation and assets."

If your home is jointly owned as joint tenants it falls automatically to the surviving spouse on death. On the death of that surviving spouse it will pass according to his/her valid will. If it is owned as tenants in common, the share of the deceased spouse will fall to their estate and be dealt with under the provisions of their will.

How can my wife and I ensure our children are looked after in the event of simultaneous death or incapacity?

"Deeds of appointment of guardian" are legal documents that make clear your preferred guardian - usually parents, siblings or close friends - to take care of your children if you are unable to. Nominating guardians avoids family wrangles about guardianship after your deaths.

Lesley McLean, a partner at Robertsons Solicitors, says some arrange for temporary guardians.

Temporary guardians may be needed to fill in for permanent guardians who are, perhaps, coming from overseas, and need some time to reach your children. Without temporary, or permanent, appointments children become court wards until a guardianship application is approved.

Deeds of appointment of guardian, temporary or permanent, can be prepared quickly for a few thousand dollars. Guardians can also be appointed under a will. This is more expensive but it prompts consideration of how the guardians will pay for your children's upbringing and education.

I've prepared a will but how should I plan for mental incapacity?

Not enough people think about this even while able to think clearly. Adult children should tactfully address this with ageing parents.

At any stage in life, an illness or accident may render us mentally incapable. As we age, the risk of strokes and dementia increases.

The operation of bank accounts and decisions in relation to real property held in your own name, for example, can only be acted on where the instruction is given by you personally. Power of attorney will only be in effect until you become mentally incapacitated.

By contrast, an Enduring Power of Attorney (EPA) is made considering a future mental incapacity. It will not lapse when most needed.

The government recently made the process easier. Before, a doctor and lawyer had to both be present to witness the signing of an EPA; but now a doctor can witness it first, followed by a lawyer within 28 days.

An EPA is not difficult to draft. It can be general or specific in relation to assets and powers and it can be changed at any stage while still mentally capable. It must however be made strictly in accordance with legal requirements.

The views presented are of a general nature. For specific advice, talk to a professional planner. See the column archive at