29 April 2014

Legal Eye: Taking care of the children should be a well-crafted will's priority

There can be no greater reason for parents to make a will than to ensure their children are properly cared for. The books A Series of Unfortunate Events, written by Daniel Handler under the pen name Lemony Snicket, come to mind. Each novel features a terrible adult who fails to take proper care of their orphaned charges, with disastrous results.

That is clearly something to be avoided. Appointing a guardian is the most straightforward way to ensure a child gets the best possible care if the parents die.

It is common to first appoint a temporary guardian who lives here and knows the children. This is the usual course for expatriates.

A temporary guardian can look after the children immediately after the parents’ deaths, ensuring they are cared for until it is appropriate for them to return home. Once back home, arrangements to repatriate the children can begin, and the legal guardians, as stated in the will, can take charge.

Most parents say this is the best solution, and drawing up a deed for the appointment of a temporary guardian can be done easily and efficiently. However, few people will include such a provision.

About 70 per cent of expatriates here do not even have a will, which is an extraordinary statistic considering the negative impact on a child if both parents died.

Hong Kong law states that if one parent dies, the surviving parent becomes the guardian, either solely or jointly if someone else has been appointed. If both parents die, the court can appoint a guardian if one has not been named.

Anyone can apply to the court to be a guardian in the absence of a parent or other recognised legal guardian. The provision was introduced in 2012 to ease the problems faced by grandparents and other family members who were in line to become official guardians.

Before the law was changed, anyone other than the parent or appointed guardian was considered a “stranger” and had no right to apply.

Clearly the amendments are welcome, but the removal of the old restrictions may present problems if an inappropriate person applies. Applicants are, of course, vetted by the court and it can appoint, remove or replace guardians – although that means the end result may not be as had been envisaged.

Further complications might also arise if there is an estate to settle. The effect of guardianship is that the appointee assumes all the rights of a parent and control over a minor. The court can also authorise payment for the guardian’s services.

A guardian has control of a minor’s estate, including all legal rights, powers and duties. They also have the right to receive and recover any property that a minor is entitled to.

If the parents have died intestate – that is, without making a will – the estate will go to the children on trust until they reach the age of 18. In these cases, the court will appoint a trustee that could be the guardian or a trust corporation, if deemed appropriate.

Not only is it crucial that guardians are appointed to ensure a child’s safety, but also that there is a will that determines who should be the executors and trustees of the estate.

The will avoids the need to ask the court to appoint a trustee and guardian to deal with the finances, which is important if the investments are complicated and involve multiple jurisdictions.

It is also less than ideal to make an application to court at such an emotional time.

A deed of appointment of a guardian is made by simply stating who should be the guardians of the children in the event of the death of either or both parents.

The deed must be in writing, and be dated and signed by the person making the appointment in front of two witnesses.

Everyone with children should make a will appointing testamentary guardians, as well as trustees and executors to handle the estate.

If it is intended that the children return to their country of origin if both parents die, temporary guardians should be named to deal with the transition.

One final consideration is that under the new provisions of the law, the child’s view should be taken into account when a choice of guardian is made. That depends on their age and level of understanding, but, hopefully, the children will be cared for by people they know and like if they have to deal with the loss of their parents.

The article was originally published in South China Morning Post on 29 April 2014. 

Category: Article