Where a will and estate plan covering assets in the CIS stands now

For a principal whose wealth spans the Commonwealth of Independent States and a holding structure anchored in Hong Kong or an offshore centre, succession is not a single legal question. It is a collision of at least three systems – the CIS (the Commonwealth of Independent States, the grouping of former Soviet republics whose domestic succession laws share common Soviet-era roots but diverge sharply in forced-heirship rules, notarial requirements, and cross-border recognition) – the common law as applied in Hong Kong, and the law of the offshore jurisdiction where the holding entity sits. No single will and estate plan governs all three. The question on every principal's desk is which instruments govern which assets, and whether a gap in one system will undo the plan built in another.

A will and estate plan covering assets in the CIS requires a layered structure: a will or succession arrangement valid in each jurisdiction where assets are situated, a holding architecture that isolates the offshore and Hong Kong layer from the reach of CIS forced-heirship rules, and a trust or similar vehicle governed by a law – such as Hong Kong trust law as reformed in 2013 – that has a tested firewall against foreign heirship claims. Under Hong Kong's Trustee Ordinance (Cap. 29), the rule against perpetuities and excessive accumulations has been abolished, and a trust is not invalidated merely because the settlor retains certain reserved powers. These two features make Hong Kong a credible governing law for the trust layer of a CIS-family structure.

This analysis sets out the commercial stakes, the governing instruments, the cross-border points where plans most often fail, and our read on where the risk is concentrated now. It is written for the principal or general counsel who already has some structure in place and is assessing whether it will hold.

What is commercially at stake for a CIS family with offshore and Hong Kong exposure?

The assets in play are typically a combination of operating businesses held through a BVI or Cayman holding entity, real property in multiple jurisdictions, liquid assets in custodian accounts, and minority stakes in regional funds. The family map usually spans two or three CIS states, a European residence, and a hub in Hong Kong or Singapore through which the group is managed. Each layer of that map engages a different succession law.

The commercial stakes are not abstract. A forced-heirship claim asserted in a CIS court against assets that the plan was designed to pass through a discretionary trust can freeze a business transfer, delay probate for years, and expose the trustee or executor to conflicting instructions from claimants in different jurisdictions. We regularly see this tension in instructions from families who have built a technically correct offshore structure but left the CIS-sited assets – often real property and operating company shares – exposed under local succession law without a corresponding local will or mandatory-heirship bridge.

The second commercial pressure is residence. A principal who has moved from a CIS state to Hong Kong for business reasons may have changed their domicile (the legal connection to a jurisdiction that determines which succession law applies to their movable property worldwide) – or may not have, depending on how that concept is applied under the relevant CIS domestic law. CIS civil-law systems do not generally apply the common-law concept of domicile. They use citizenship or habitual residence as the connecting factor. That divergence is the single most common source of unplanned outcomes in CIS-family succession.

What does this mean in practice? A principal who has lived in Hong Kong for a decade, holds Hong Kong permanent residency, and is advised under common law that they have acquired a Hong Kong domicile may still find that a CIS state where they hold citizenship applies its own succession law to their movable assets worldwide. Two systems claim jurisdiction. Neither defers automatically to the other.

What are the governing instruments, and how does the cross-border interface actually bite?

The primary instruments in a CIS-family estate plan are: one or more local wills drawn under the applicable CIS civil code, a Hong Kong will or trust instrument governed by Hong Kong law, and a holding-entity constitutional document in the offshore jurisdiction that deals with transmission of shares on death. Each instrument must be valid in its own system and consistent with the others. That is harder than it sounds.

In most CIS jurisdictions, a will must be notarised domestically. A Hong Kong will executed before a Hong Kong solicitor is not automatically recognised. Some CIS states have adopted bilateral or multilateral conventions on the recognition of foreign notarial acts, but coverage is uneven and the practical experience of local notaries and registries varies considerably. Where a CIS-sited immovable asset is not covered by a locally valid will, intestacy rules apply – and those rules in most CIS civil-code systems impose forced-heirship (mandatory reserved shares for certain categories of heirs, including children and, in some systems, surviving spouses and parents) that cannot be overridden by a foreign trust or will.

The Hong Kong layer operates under a fundamentally different logic. Hong Kong law has no forced-heirship regime. The Trustee Ordinance (Cap. 29), substantially reformed with effect from 1 December 2013, provides that a Hong Kong trust is not invalidated solely because a foreign law would give a claimant rights over the trust assets. This firewall is one of the reasons Hong Kong is chosen as the governing law for the trust layer of structures where the family has exposure to civil-law forced-heirship systems.

The offshore layer – a BVI or Cayman holding company above the operating group – is governed by the BVI Business Companies Act or the Cayman Islands Companies Act respectively. Shares in a BVI or Cayman company are movable property and, absent a trust or specific testamentary disposition, pass under the succession law applicable to movable property of the deceased. That connecting factor loops back to the domicile or citizenship question. If a CIS state claims the principal as its citizen and applies citizenship as the connecting factor, shares in the offshore holdco may be within the reach of CIS mandatory-heirship rules, even if the company itself is BVI or Cayman.

The sequence of risk is therefore: the CIS civil code bites first on CIS-sited immovable assets; it may bite second on CIS-sited movable assets; and it may bite third – through the citizenship connecting factor – on offshore shares. A well-designed plan addresses each layer independently.

To understand how the offshore and trust layers interact with CIS-family asset protection more broadly, see our related matter note on asset protection for a principal with Cayman Islands exposure.

The sequence above describes the standard analytical position. Your matter turns on the specific CIS states engaged, the nature and location of the assets, and the citizenship and residence profile of the principal and intended beneficiaries – which is where the plan is won or lost.

To discuss how these instruments apply to your cross-border position, contact info@lockhartyip.com.

How do CIS succession rules compare with the Hong Kong and offshore position?

A direct comparison reveals the structural tension that drives most planning decisions.

Hong Kong law – common law, no forced heirship, tested trust firewall, perpetuities abolished – gives a principal maximum testamentary freedom over assets governed by that law. A discretionary trust settled with Hong Kong as governing law can hold assets for a wide class of beneficiaries across generations, with no mandatory share for any individual heir. The settlor can reserve powers of revocation, amendment, and investment direction without invalidating the trust. This is the Trustee Ordinance (Cap. 29) position confirmed by the 2013 reform.

CIS civil-code systems are at the opposite end. In most, children of the deceased – and in many systems, disabled or minor children of prior relationships, surviving spouses, and dependent parents – hold a statutory right to a reserved share of the estate. That share is calculated on the notional estate as at the date of death and, in some systems, on gifts made within a defined period before death. The reserved share cannot be waived by the testator alone; in some CIS states, it can be waived by the heir in a formal notarised agreement, but the validity and enforceability of such waivers in practice is jurisdiction-specific and changes with court interpretation over time.

The offshore position is neutral as to forced heirship in the sense that BVI and Cayman company law does not itself impose heirship claims. But shares in those companies, as noted, carry a succession tail depending on the connecting-factor analysis. A trust interposed above the offshore holdco severs that tail, provided the trust is validly settled and the assets are transferred into it while the settlor has capacity and no existing heirship claim is already asserted.

What do foreign advisers most often misread? The single most common error we see in instructions from European or CIS-based private counsel is the assumption that a properly structured offshore trust automatically ring-fences the holding company shares from CIS forced-heirship claims. It does not, automatically. The trust must be settled under a governing law with a tested firewall provision; the transfer of shares into the trust must be completed with full capacity and absent a pending heirship dispute; and the trust must be able to demonstrate that the transfer was a genuine, irrevocable settlement and not a testamentary disposition in disguise. Each of those conditions requires specific drafting and timing decisions that are not default positions under any standard offshore trust document.

For a practical guide to structuring a private trust for family assets through an offshore centre, see our guide on private trust structures for family assets through the Cayman Islands.

Where does the planning actually break down? A cross-border scenario

A mid-sized industrial group controlled by a CIS-based family, with operating subsidiaries in two CIS states and a Cayman holdco managed from Hong Kong, came to our desk in the second half of 2025. The principal held citizenship in two CIS states and had been resident in Hong Kong for several years. A European private-bank adviser had structured a Cayman discretionary trust some years earlier. The trust held the Cayman holdco shares. On its face, the plan appeared complete.

The issues that emerged on a cross-border review were material. First, the trust instrument was governed by Cayman law, not Hong Kong law. Cayman law has a forced-heirship firewall, but its scope and judicial interpretation differ from the Hong Kong position. The families' anticipated beneficiary class included children from two relationships across different CIS states. Second, the real property in the CIS states – substantial in aggregate – had never been covered by a locally valid notarised will. Those assets would pass under the intestacy rules of each CIS state, triggering mandatory shares for all qualifying heirs in each jurisdiction. Third, the principal's CIS citizenship meant that one of the CIS states claimed its own succession law applied to the Cayman shares, notwithstanding the trust. That claim had not been tested, and the trust deed had not been drafted to address it.

The work required to re-sequence the structure was considerable: local wills in each CIS state for the immovable assets; a re-governing of the trust instrument under Hong Kong law with the Trustee Ordinance firewall expressly engaged; and a formal analysis of the citizenship connecting-factor risk in each CIS state, with the trustee's legal position documented. The outcome was qualitatively better than the starting position – a materially reduced exposure to unplanned heirship claims – but the reworking took longer and cost more than building it correctly the first time would have.

A second scenario, from the same period, involved a CIS family office in the process of relocating to Hong Kong. The principal was establishing a family office vehicle in Hong Kong and wished to consolidate the succession plan at the same time. Here the planning sequence was different: the trust was settled under Hong Kong law from the outset, the immovable CIS assets were addressed by parallel local instruments, and the residency transition was mapped alongside the succession structure rather than after it. The difference in complexity and exposure between the two instructions was significant.

How does the enforcement and recognition picture affect the plan?

A succession plan is only as strong as its enforceability. In the CIS context, enforcement raises three specific questions: will a Hong Kong court recognise a CIS probate or heirship order? Will a CIS court recognise a Hong Kong trust or will? And where assets are held through a Cayman or BVI vehicle, what is the enforcement route if a beneficiary or heir challenges the structure in a CIS court?

Hong Kong courts apply common-law conflict-of-laws rules to succession. For immovable assets, the law of the place where the asset is situated governs. For movable assets, the law of the deceased's domicile at the date of death governs. A Hong Kong court will not simply apply CIS law because the principal held CIS citizenship; it will apply the domicile test. If a CIS court has issued a probate order based on citizenship as the connecting factor and that order conflicts with a Hong Kong probate proceeding based on domicile, the result is conflicting orders in two jurisdictions. Neither automatically yields to the other.

Since 29 January 2024, the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) has been in force, substantially broadening the scope of Mainland Chinese court judgments registrable in Hong Kong. This is directly relevant where assets sit in Mainland China, but it does not extend to CIS-state court orders. CIS-state probate or heirship orders seeking enforcement in Hong Kong must be recognised under common-law principles or, where applicable, bilateral treaty arrangements – of which there are relatively few between CIS states and Hong Kong directly.

What this means practically is that assets held directly in a CIS state under a Hong Kong or offshore succession instrument may be unreachable without local enforcement proceedings. Conversely, a CIS heirship order seeking to enforce against Hong Kong-held assets, including shares in a Hong Kong-governed trust, faces the full weight of the Trustee Ordinance firewall. The plan should be designed so that the most contested assets – those where the forced-heirship risk is highest – sit inside the structure that provides the strongest defence.

The BVI and Cayman layer adds a further enforcement consideration. A CIS court order against the Cayman holdco requires recognition in the Cayman Islands under Cayman conflict-of-laws rules. Cayman is a common-law jurisdiction. Its courts apply the same general principles as Hong Kong: the law of the place of incorporation governs the company's internal affairs, and movable property of a foreign deceased passes under the law of the deceased's domicile. If the trust is validly interposed above the holdco, the shares are trust assets, not estate assets. A CIS heirship claim against trust assets faces both the Cayman trust firewall and the governing-law question.

Our cross-border practice regularly handles the mapping of these enforcement routes before a structure is finalised. The objective is not to defeat legitimate heirship claims – it is to ensure that the plan operates as intended for the beneficiaries it was designed to protect, and that no unintended gap in the local-instrument layer gives an unplanned claimant a back door.

What is our read on where the risk sits now?

Several developments in recent years have shifted the risk profile for CIS-family estate plans.

First, CIS states have, at varying speeds, updated their private international law and conflict-of-laws rules. Some have moved to habitual residence as the primary connecting factor for movable property, reducing (but not eliminating) the citizenship-based claim. Others have retained or strengthened the citizenship approach. The position is not uniform across the CIS, and it has not stood still. An estate plan built five or more years ago on a legal analysis that was accurate at the time may now be exposed by a rule change in one of the relevant states.

Second, the practical enforceability of heirship claims in CIS courts against offshore structures has increased. Courts in several CIS states have shown greater willingness to pierce the corporate veil of offshore holding entities and treat the underlying assets as part of the deceased's estate for mandatory-heirship purposes, particularly where the beneficial ownership connection is clear and the trust or holding structure was settled close to the date of death or during a period of family dispute.

Third, the Hong Kong position has remained stable and favourable. The Trustee Ordinance firewall and the abolition of the perpetuity rule have not been reversed. The Hong Kong courts continue to apply common-law conflict-of-laws rules in a manner that respects the internal affairs of properly structured trusts. For principals with the option to choose a governing law for their trust layer, Hong Kong remains one of the strongest available choices for a CIS-family structure with forced-heirship exposure.

Fourth, the residence and tax picture has changed. The Hong Kong FSIE (foreign-sourced income exemption) regime, in force from 1 January 2023 as amended, requires economic substance for qualifying income to remain exempt. Family offices using Hong Kong holding entities must demonstrate genuine substance if they wish to rely on the exemption. That substance requirement interacts with succession planning: a family office that is genuinely managed from Hong Kong strengthens the domicile or habitual-residence argument under common law and may weaken the CIS citizenship-based claim over movable assets held there. Residence planning and succession planning are no longer separate conversations.

Fifth – and most relevant for the mofu reader assessing an existing plan – the combination of updated CIS conflict-of-laws rules, more aggressive local court practice, and the new Hong Kong reciprocal-enforcement regime (for Mainland assets specifically) means that a review of any plan more than three years old is warranted. The review should cover: whether the local wills for CIS-sited assets remain valid and sufficient; whether the trust governing law continues to provide the strongest available firewall; whether the citizenship and residence analysis is current; and whether any new beneficial-ownership disclosure requirements in the offshore jurisdiction have changed the transparency picture in a way that assists a heirship claimant in identifying the asset held inside the trust.

If an earlier filing, structure, or succession attempt produced an adverse or stalled result – or if a family dispute has emerged since the plan was last reviewed – a fresh cross-border assessment can identify what remains open and what needs to be rebuilt.

To map the options for your succession structure across Hong Kong, the CIS, and the relevant offshore centre, reach us at info@lockhartyip.com.

The objection handler: do I really need a layered structure if I already have a will?

The most common objection we encounter from CIS principals who have engaged European private-banking or domestic legal advisers is that they already have a will. A single-document answer to a multi-jurisdictional succession question is the most pervasive myth in CIS-family estate planning.

A will governs what it governs under the law that validates it. A Hong Kong will, executed and witnessed correctly under the Wills Ordinance, is a valid testamentary instrument in Hong Kong for assets governed by Hong Kong law. It does not automatically extend to immovable property in a CIS state. That property is governed by the lex situs – the law of the place where the land sits. A CIS notary dealing with the estate of a deceased foreigner will not accept a foreign will in place of a locally executed testamentary instrument unless there is a treaty or specific domestic rule permitting it, and the practical reality in most CIS registries is that a locally notarised instrument is required in any event.

The converse is equally true. A CIS notarised will, dealing with all assets worldwide, may be technically valid as a matter of CIS domestic law, but it will not override the trust instrument governing the offshore holding layer. A discretionary trust that was validly settled in the principal's lifetime is not a testamentary disposition. Its assets are not the deceased's estate. A CIS notarised will cannot direct the distribution of trust assets, regardless of what it says.

The practical answer is neither a single will nor a single trust. It is a coordinated set of instruments, each valid in its own system, each addressing the assets within its reach, and each drafted to be consistent with the others rather than in conflict. That coordination is the work. The individual documents are the output of it.

For a fuller discussion of the private wealth and succession services we provide across the CIS, Hong Kong, and principal offshore centres, see our Private Wealth practice page.

What does a cross-border review actually involve?

A structured review of a CIS-family estate plan, as our desk conducts it, covers six areas.

The first is the asset map: a complete picture of where assets sit, in which legal form (direct holding, company shares, trust assets, custodian accounts, real property), and in which jurisdiction each is situated. This is not always available at the start of an instruction; part of the work is reconstructing it.

The second is the citizenship and residence profile: the current citizenship and residence status of the principal and key beneficiaries, and how each relevant jurisdiction characterises those facts for succession-law purposes. This drives the connecting-factor analysis.

The third is the instrument audit: a review of each existing testamentary or succession instrument, its governing law, its scope, and its interaction with the others. Gaps and conflicts are identified at this stage.

The fourth is the forced-heirship exposure analysis: for each CIS jurisdiction in the asset map, an assessment of who the qualifying heirs are, what mandatory share they hold, and whether the existing plan adequately addresses or limits that exposure.

The fifth is the trust and holding-layer review: an assessment of whether the existing trust instrument (if any) and offshore holding structure provide the intended protection, and whether the governing law, firewall provision, and transfer mechanics were correctly implemented.

The sixth is a forward-looking recommendation: a set of actions, sequenced by priority and urgency, covering what needs to be amended, what new instruments are required, and in which order the work should be done to avoid creating new exposure while closing existing gaps. The timing matters. A trust settled during an active family dispute, or a will executed when capacity is in question, can be challenged. The sequence of the work is as important as the content.

We work alongside locally licensed Hong Kong firms and allied counsel admitted in the relevant jurisdictions for all matters requiring in-country execution. The international and cross-border analysis is the centre of what we do.

Related practices

• Private Wealth – succession, trusts, family office and cross-border asset protection
• Holding Structures – BVI, Cayman and Hong Kong holding architecture for international groups
• Tax Positions – FSIE, residence, Pillar Two and cross-border tax structuring from Hong Kong

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Related

• Private Wealth
• Asset Protection Principal Cayman Islands Exposure Cayman Matter
• Private Trust Family Assets Cayman Islands Cayman Guide

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