Where forced-heirship and cross-border succession risk stands now

An Asian family holding assets across Hong Kong, the Cayman Islands, a European jurisdiction and a Mainland Chinese operating company does not have one succession problem. It has four – and they do not resolve in the same direction. The question is not whether forced-heirship rules apply somewhere in that map. The question is which system asserts priority, how it reaches across borders, and whether the structures in place are actually positioned to hold.

Forced-heirship risk in a cross-border estate arises when the laws of one or more jurisdictions on the family's asset map impose minimum inheritance entitlements that override testamentary freedom – and those rules can reach assets held in a different legal system through conflict-of-laws principles, domicile analysis, or direct enforcement action. Under Hong Kong law, there is no forced-heirship regime; the Trustee Ordinance (Cap. 29), substantially reformed with effect from 1 December 2013, reinforces Hong Kong as a structurally resistant holding and trust forum. The interface problem is not in Hong Kong. It is at the boundary between Hong Kong's position and the rules of the jurisdictions where family members reside, where the settlor was born, or where the operating assets sit.

This analysis works through the commercial stakes, the governing instruments, the comparative position across the systems our clients actually use, and the practical points where risk concentrates today.

What is commercially at stake when forced-heirship rules enter the picture?

The commercial exposure is not abstract. When a principal dies domiciled – or arguably domiciled – in a jurisdiction with a mandatory heir entitlement, a successful forced-heirship claim can unwind years of pre-death structuring. Assets held in a trust can be re-characterised as part of the estate. A holding structure built on a BVI or Cayman company can be looked through if the court in the claimant's jurisdiction treats the interposition of a company as a bare device. A shareholder loan repaid before death can be treated as an advance on the estate.

The sums involved are typically large. Family-office portfolios, multi-generational real estate books, and operating businesses with cross-border revenue are exactly the asset classes where forced-heirship claims are brought. A successful claimant in a French, Spanish, or civil-law Gulf jurisdiction may obtain a judgment that they then attempt to enforce against assets wherever they can be found – including in jurisdictions that, on their face, do not apply forced-heirship rules at all.

For Asian families with European residency, Mainland Chinese nationality, or assets in civil-law jurisdictions, the risk is immediate and structural, not theoretical. The cross-border enforcement question is whether a foreign forced-heirship judgment can reach Hong Kong assets. The structuring question is whether the instruments in place prevent the assets from being characterised as part of the estate in the first place.

How does the governing framework work, and where does the cross-border interface bite?

Succession law is a conflict-of-laws minefield. Different systems use different connecting factors – domicile, habitual residence, nationality, situs – and they do not converge. A Hong Kong court applies common-law rules: generally, the law of domicile governs movables; the law of situs governs immovables. A civil-law court in continental Europe may apply the law of the deceased's nationality. A Gulf jurisdiction may apply Sharia inheritance rules to any Muslim national regardless of where assets are held.

The practical consequence is that a principal holding movable assets in Hong Kong, domiciled in France at death, faces a French succession analysis under the Succession Regulation (the EU framework governing succession matters with cross-border elements within the EU) that can draw those assets into the French estate. The French reserved-share entitlement – the réserve héréditaire (the portion of the estate that French law mandates descend to statutory heirs, regardless of testamentary instruction) – is not merely a domestic rule. France has shown a preparedness to assert the réserve against foreign structures.

The Hong Kong Trustee Ordinance's 2013 reforms strengthened the position considerably. The Ordinance provides statutory protection against foreign forced-heirship claims attacking a Hong Kong-law trust. A trust governed by Hong Kong law is not invalidated merely because the settlor reserved certain powers. The abolition of the rule against perpetuities means a properly structured Hong Kong discretionary trust can hold assets across generations without the structural disruptions that earlier time-limits created. But the firewall is not absolute, and it is not extraterritorial. It protects Hong Kong-law trusts from foreign forced-heirship challenges in Hong Kong proceedings. It does not prevent a foreign court from making its own order against the settlor's estate and then pursuing enforcement internationally.

The question that determines real exposure, therefore, is not simply "is there a Hong Kong trust?" It is: can the trust be attacked in a foreign jurisdiction, and if so, can any resulting judgment reach assets that sit outside Hong Kong?

How do Hong Kong and the Mainland position compare?

Mainland Chinese succession law does not use the term forced heirship in the European sense, but the 必留份 (mandatory inheritance portion) principle – which requires that certain close dependants receive a minimum share of an estate – means that testamentary freedom is not unlimited. The practical effect for a Mainland national with a Hong Kong holding structure is that the Mainland succession rules apply to estate assets situated in the Mainland, and potentially to movables if the deceased was domiciled there.

The Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) – in force since 29 January 2024 – materially changes the enforcement picture. Cap. 645 allows effective Mainland civil and commercial judgments to be registered with Hong Kong's Court of First Instance. Succession matters are excluded from the current scope of Cap. 645, which is relevant: a Mainland succession judgment cannot currently be enforced in Hong Kong via that mechanism. But the broader enforcement architecture is tightening. Mainland courts are becoming more willing to assert jurisdiction over assets held through offshore structures where the underlying beneficial interest belongs to a Mainland national. That assertion does not require Cap. 645; it proceeds through the Mainland court's own characterisation of the structure.

For a family with both Mainland-national members and Hong Kong-resident members holding assets in the same structure, the Mainland succession analysis and the Hong Kong trust analysis can run in parallel – on different legal tracks, potentially reaching different conclusions. We see this in practice: an offshore structure designed to achieve testamentary flexibility from a Hong Kong perspective can simultaneously face a Mainland challenge based on the beneficial-interest characterisation. The resolution depends heavily on how the structure was built, how it was documented, and whether the substance genuinely matches the form.

What does the comparative read across civil-law and common-law systems tell us?

The sharpest structural contrast is this: common-law systems – Hong Kong, the BVI, the Cayman Islands, England and Wales, Singapore – generally respect testamentary freedom as the default. Civil-law systems – France, Germany, Spain, Luxembourg, the Netherlands, and most of the Gulf civil codes – impose fixed inheritance shares for statutory heirs as a matter of public policy. The offshore holding centres in common use above Hong Kong operating companies – BVI and Cayman – are emphatically common-law jurisdictions with no forced-heirship rules and mature trust and company legislation.

The problem arises when the principal connecting the structure to a civil-law system is not the asset location but the person. A settlor who moves from Hong Kong to France, or whose family members reside in France, imports a potential forced-heirship claim into what was designed as a protected structure. The EU Succession Regulation allows EU residents to elect the law of their nationality to govern their succession, and a British or Hong Kong-permanent-resident national might use that election to maintain common-law succession rules. But the election must be made, documented, and understood – and it operates only within the EU system's own logic.

Singapore offers an instructive comparison. Like Hong Kong, Singapore has no forced-heirship regime. Singapore's trust legislation has been developed in parallel with Hong Kong's, and both jurisdictions compete for the same cross-border family-office mandates. The practical difference is that Singapore's closer integration with the ASEAN legal environment and its own conflict-of-laws position on Mainland Chinese and South Asian estates creates a distinct set of challenges that differ from Hong Kong's. A family choosing between the two as the primary trust and holding forum should assess the specific jurisdictional pull of their actual family map – not a generic comparison of the two cities.

The United Kingdom – often on the map because of residential or investment properties – applies its own domestic succession rules and its conflict-of-laws analysis independently. A UK situs asset held in a non-UK entity is generally governed by the law of that entity's domicile for succession purposes, but the UK has its own inheritance (provision for family and dependants) regime that can reach assets transferred in the period before death.

Where does the risk concentrate in practice?

Our read, based on cross-border succession matters handled by this desk, is that risk concentrates at five points.

First, domicile ambiguity. A principal who has spent years moving between Hong Kong, the Mainland, Europe and the Middle East without clearly establishing domicile in any one place is the most exposed. Every jurisdiction on the travel map has a potential claim to apply its succession rules. The solution is not to avoid travel; it is to build and maintain a documented domicile position.

Second, thin substance in the holding structure. A BVI or Cayman holding company or trust that exists only on paper – without genuine management, without documented trustee decision-making, without a real separation between the settlor's assets and the trust fund – is vulnerable to look-through in a civil-law jurisdiction. Courts in France, Germany and Spain are experienced at re-characterising sham trusts or nominee structures as transparent devices that form part of the estate.

Third, recent transfers. Assets transferred to a trust or offshore structure shortly before the principal's death – or during a period when their health was declining – are vulnerable to challenge on grounds of fraud on forced-heirship rights (the French action en réduction) or equivalent civil-law remedies. Timing matters. A structure assembled over ten years, with documented distributions and genuine trustee discretion, is materially harder to attack than one assembled in the eighteen months before death.

Fourth, cross-border enforcement of foreign judgments. Even if a forced-heirship claimant wins in a foreign jurisdiction, enforcement depends on where the assets are. As noted above, Cap. 645 currently excludes succession matters, which provides structural protection for Hong Kong-held assets against Mainland succession orders. But assets held in the UK, France, or a jurisdiction that recognises the civil-law foreign judgment face a different analysis. The structure must be stress-tested for enforcement, not just for originating jurisdiction.

Fifth, changing residency patterns. Families are more mobile than a decade ago. A principal whose children have taken residency in Germany or Spain may find that their children's residence – not the principal's own – creates a forced-heirship exposure through the children's right to bring claims in their own jurisdiction. The 2013 Hong Kong Trustee Ordinance reforms protect the trust in Hong Kong, but a German court applying German law to a German resident's entitlement from a German-domiciled claimant operates on its own jurisdictional foundation.

What foreign counsel and in-house teams regularly misread

The most common error we see is the assumption that a trust established in Hong Kong or a common-law offshore centre solves the forced-heirship problem across all jurisdictions. It does not. It solves the problem in the jurisdiction of the governing law and where assets are physically situated or registered. It does not prevent a foreign civil-law court from making its own order against the estate and then pursuing enforcement wherever it can reach.

A related misconception is that a choice-of-law clause in a trust deed is determinative. It is powerful evidence of the parties' intentions and generally respected in common-law jurisdictions. In a civil-law court, it may be overridden where the claimant argues that the trust structure was a device to defeat their mandatory inheritance rights – which is precisely the fraude à la loi (evasion of the law through artificial structuring) argument that French courts have applied to offshore trust arrangements.

A third misreading is that the Hong Kong firewall provisions mean that foreign courts cannot touch assets in a Hong Kong trust. The firewall is procedurally potent in Hong Kong proceedings: a Hong Kong court will not give effect to a foreign forced-heirship claim attacking a Hong Kong-law trust. But it does not bind a French court sitting in Paris, and it does not prevent a French court from making an order that the claimant then enforces against the settlor's estate assets outside Hong Kong.

Finally, some in-house teams treat the absence of a will as a lower-risk position because the estate "just follows the intestacy rules." In a cross-border estate, intestacy is typically more dangerous than a properly drawn will, because intestacy rules differ sharply between jurisdictions and the family's asset map may produce intestacy outcomes in each jurisdiction that contradict each other and contradict the principal's evident intentions.

A micro-scenario: the civil-law-resident beneficiary problem

A family-office principal with Hong Kong permanent residency, holding assets through a Cayman Islands discretionary trust, had two adult children, one resident in the Netherlands and one resident in Hong Kong. The trust had been in place for several years, with documented trustee distributions and a genuine third-party trustee. The principal's will, governed by Hong Kong law, allocated the residue of the estate to the trust.

After the principal's death, the Netherlands-resident child brought a claim in the Netherlands asserting a forced-heirship entitlement under Dutch law, which – by reference to the EU Succession Regulation and the principal's habitual residence in a non-EU state – applied Dutch law to the portion of assets the Dutch court characterised as forming part of the estate. The trust assets themselves were not directly attacked. The claim focused on liquid assets held in a Hong Kong bank account in the principal's own name at death, which had not been transferred to the trust.

The enforcement question became: could a Dutch judgment against those liquid assets, if obtained, be enforced in Hong Kong? The analysis turned on whether the Dutch judgment – not being a Mainland judgment within Cap. 645's scope, and falling within the succession exclusion in any case – would be enforceable at common law in Hong Kong. The answer required a close review of the common-law requirements for enforcing a foreign judgment in Hong Kong and the specific grounds on which a Hong Kong court might decline enforcement of a judgment obtained in circumstances affecting mandatory succession rights.

The structural lesson is straightforward. Assets held in the principal's own name outside the trust remain fully exposed to forced-heirship claims wherever the claimant has jurisdiction. The trust protected what was in the trust. It did not protect what was outside it.

A second micro-scenario: the Mainland national with a BVI holding structure

A Mainland Chinese national – a founder of a manufacturing group – had over a period of years moved the family's offshore holdings into a BVI holding company, in turn held through a Hong Kong intermediate company above the Mainland operating entities. No formal trust structure was in place. The principal held the BVI shares directly. A will existed, governed by Hong Kong law, leaving the BVI shares to the founder's surviving spouse, with the children to receive specific gifts.

A family dispute arose among the children following the founder's death. One child, relying on the Mainland succession rules applicable to the founder's domicile at death, sought a share of the BVI company's assets on the basis that the BVI shares formed part of the estate of a person domiciled in the Mainland, and that Mainland succession rules – including the mandatory-provision principle – should apply.

The dispute proceeded on multiple fronts: in the Mainland (over the operating company stakes), in the BVI (over the BVI holding company shares), and in Hong Kong (over the intermediate company and the bank accounts). Each forum applied its own conflict-of-laws analysis. The absence of a trust meant there was no structured argument for separating the beneficial interest from the estate. The argument was fought on the narrower ground of which court had jurisdiction and which law governed the BVI shares as a matter of situs.

The matter settled, but the structuring lesson was pointed: a trust established during the founder's lifetime, with genuine substance and documented trustee decision-making, would have positioned the family's argument materially differently. The BVI shares, if held by an independent trustee under a properly constituted discretionary trust, would not form part of the deceased's estate in the same way. The litigation arose precisely because the pre-death structuring had not been completed.

Where the risk sits now: our view

Three developments shape the current risk environment for cross-border succession.

The first is the increasing assertiveness of civil-law jurisdictions in applying their forced-heirship rules to offshore and common-law structures. French courts, in particular, have developed a consistent line of cases treating sham or nominee trusts as transparent, and have applied the réserve héréditaire to assets ostensibly held offshore. While we do not cite specific case references, the doctrinal direction is clear and sustained. Structures must be genuinely separate from the settlor in form, substance, and documentation if they are to withstand this scrutiny.

The second development is mobility. The families that were, a decade ago, primarily based in Hong Kong or Singapore with occasional European travel have, in many cases, shifted their residency patterns materially. Greater numbers of principal family members now hold European residency, UK non-domiciled status (itself undergoing reform), UAE residency, or US green cards. Each status brings a different succession law analysis into the picture. The family's succession map is not static; it shifts every time a family member changes their residency position.

The third development is the tightening of cross-border enforcement generally. Even where Cap. 645's succession exclusion provides near-term protection for Hong Kong assets against Mainland succession orders, the broader trend in international private law is toward greater mutual enforcement of civil judgments. Families should not assume that enforcement exclusions remain static. The succession exclusion exists now; its scope and permanence are policy questions, not permanent fixtures.

Our desk's view is that the immediate priority for families with civil-law exposure is to stress-test two things: the completeness of the trust – whether all intended assets have been properly transferred in and properly held – and the domicile documentation. A trust that holds the portfolio assets but leaves personal bank accounts, life-insurance proceeds and retained operating-company interests outside the structure is a partial solution. Partial solutions fail at the margin, which is where disputes actually occur.

For families with Mainland Chinese nationals in the succession line, the interaction between Mainland succession rules and Hong Kong holding structures remains the most operationally live issue. The answer is not to avoid Hong Kong structures. It is to build and maintain them properly, with substance, documentation, and a clear account of why the trust – and the Hong Kong choice of law – should be respected by a court sitting elsewhere.

The broader analytical point is that cross-border succession planning is not a one-time exercise. It requires periodic review whenever the family's residence pattern changes, whenever assets are added to or removed from the structure, and whenever the relevant jurisdictions change their rules. The risk profile of a structure built in 2018 for a family then resident in Hong Kong looks different in 2027 if two of the principal beneficiaries have since become EU residents.

For a structured assessment of your cross-border succession and forced-heirship exposure, including the interaction between your trust arrangements and the jurisdictions where family members now reside, write to us at info@lockhartyip.com.

Related practice areas that interact with this analysis include the firm's Private Wealth practice, which covers succession planning, trust structuring and asset-protection arrangements across the principal offshore centres, and the matter note on succession planning across Hong Kong and the Cayman Islands. Families with UK real-estate exposure or UK residency in the succession line should also review the desk note on asset protection for principals with United Kingdom exposure.

If an earlier structuring attempt has produced an incomplete or contested position – a trust that was never fully funded, a will that does not engage with the cross-border dimension, or a holding structure that a foreign court has already looked through – a second read can identify the gaps and the routes still open. Contact info@lockhartyip.com.

Related practices

• Private Wealth – succession, trust structuring, asset protection and family-office arrangements
• Holding Structures – offshore and Hong Kong holding-entity design, substance and governance
• Tax Positions – residence, treaty analysis and FSIE implications for cross-border structures

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This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.