Update: a will and estate plan covering assets CIS

For families holding assets across the CIS (the Commonwealth of Independent States, comprising most of the former Soviet republics) while anchored in Hong Kong or another common-law hub, succession planning has never been a single-document exercise. The interaction between domestic inheritance laws in CIS jurisdictions – several of which retain features of forced heirship (mandatory inheritance shares that statute reserves for close relatives, regardless of a testator's wishes) – and the absence of any such regime under Hong Kong law creates a structural gap that an unrevised will or an ageing estate plan is unlikely to bridge.

This briefing flags the conditions that are pushing that gap wider and identifies the immediate steps that principals should take.

What the current environment means for CIS-connected estate plans

Several developments are converging. Residence patterns for CIS-origin families have shifted materially over the past two years. Principals who were once tax-resident and habitually resident in a single CIS state now frequently hold assets – real property, operating stakes, liquid funds – across two or three jurisdictions simultaneously, while their personal residence has moved to Hong Kong, the UAE, a European country, or some combination of these.

That dispersal matters because succession law, across most CIS jurisdictions, follows either the law of the deceased's last habitual residence or the lex situs (the law of the place where an asset is situated). A will drawn up for a single-country profile will not automatically govern assets that have since moved or been acquired elsewhere. Where immovable property sits in a CIS state, the lex situs rule typically applies regardless of the testator's residence or the governing law chosen in the will.

At the same time, a number of CIS states have amended or are reviewing their private international law rules on succession, and several have tightened the administrative requirements for recognising a foreign will or a probate grant issued by a common-law court. An estate plan that worked three years ago may no longer produce the outcome the family intends.

Who is affected and where the risk concentrates

The principal exposure falls on three groups.

First, families where the primary testamentary document is a will governed by Hong Kong law or the law of another common-law jurisdiction. Hong Kong law has no forced-heirship regime. That is an advantage for estate planning, because the Trustee Ordinance (Cap. 29) – substantially reformed with effect from 1 December 2013 – gives a Hong Kong trust strong firewall protection against foreign forced-heirship claims. But a will alone, without a trust structure sitting above the CIS assets, may not carry that protection to assets physically located in a forced-heirship jurisdiction.

Second, principals who have not updated their structure since their residence or domicile changed. The state whose law governs the succession of movable assets is generally the state of the deceased's domicile at death. A principal who was domiciled in Russia or Kazakhstan when the will was drafted but is now resident in Hong Kong faces a real question about which system will govern. That question should be answered in advance, not by a probate court after death.

Third, families where the asset map has expanded – new real property, a new operating company, a digital-asset holding – without a corresponding review of the estate plan. Each new asset category adds a potential conflict-of-laws point.

In our cross-border private wealth practice, we regularly see plans that were well-constructed at inception but have not kept pace with the family's actual position. The administrative and legal cost of correcting a succession dispute across jurisdictions is orders of magnitude higher than the cost of a timely review.

What to do now

Three actions are warranted without delay.

Map the current asset and residence position. The starting point is a clear picture of where assets sit, what category they fall into (movable or immovable, held directly or through a structure), and where the principal and their family members are resident and, if different, domiciled. This map drives the conflict-of-laws analysis.

Review the will and any trust documents against the current map. A will that does not reflect the current asset and residence profile should be treated as incomplete. Where CIS immovable property is held directly, local counsel admitted in the relevant CIS jurisdiction will need to confirm whether a foreign will is recognisable and whether a separate local will or a notarial disposition is required. We coordinate with allied counsel admitted in the relevant jurisdictions for that step.

Assess whether a trust or holding structure above the CIS assets improves the position. The firewall provisions introduced by the 2013 reform to the Trustee Ordinance are one tool. Offshore holding structures – commonly through the BVI or the Cayman Islands, which are common-law holding centres with established economic-substance regimes – are another. Neither is a universal solution; the choice turns on the nature of the assets, the family's tax-residence position, and the enforcement environment in the CIS states concerned. Relevant structuring options for families with comparable cross-border profiles are discussed in our briefing on private trusts and family assets in the Cayman Islands.

The interaction of succession law with the family's tax-residence position is a further variable. Under Hong Kong's territorial tax system, there is no estate duty and no capital-gains tax. That position does not automatically extend to assets in CIS jurisdictions, several of which impose inheritance taxes or require a notarial inheritance certificate that carries its own costs and timelines. The correct sequencing of a review – succession first, then tax – matters.

The sequence above describes the standard position. Your matter turns on the documents, the jurisdictions actually engaged, and the order of steps – which is where the route is won or lost. To discuss how these developments affect your cross-border estate plan, write to us at info@lockhartyip.com.

For further context on the private wealth practice and the succession and asset-protection work we handle across Greater China and the CIS corridor, see our private wealth practice page and our matter note on succession planning across Hong Kong and Singapore.

Frequently asked questions

How long does a will and estate plan covering assets in the CIS usually take?

There is no single answer, because the timeline depends on the number of jurisdictions engaged, whether immovable property requires local documentation in each CIS state, and the complexity of any trust or holding structure above the assets. A focused review of an existing plan – asset map, conflict-of-laws analysis, and a revised will – can often be completed within a matter of weeks. Implementation of a new holding structure, or coordination with local counsel in multiple CIS states for local testamentary documents, takes longer. The first step is always the asset and residence map; once that is clear, realistic timelines can be set for each element.

How does the cross-border element affect a will and estate plan covering assets in the CIS?

The cross-border element is the central challenge. CIS jurisdictions generally apply the law of the deceased's last habitual residence to movable assets, and the law of the place where the asset is situated to immovable property. A Hong Kong-governed will may not be recognised, or may not govern, assets in a CIS state without additional steps – such as a local will, a notarial disposition, or a holding structure that converts the conflict-of-laws analysis. Where forced-heirship rules apply in a CIS jurisdiction, assets situated there may be subject to mandatory inheritance shares regardless of the testator's wishes, unless a recognised structure intervenes. Mapping those interfaces before death is the purpose of cross-border estate planning.

What are the main risks in a will and estate plan covering assets in the CIS?

The principal risks are: forced-heirship claims in CIS jurisdictions overriding the testator's intended distribution; a foreign will not being recognised in the CIS state where assets are located; an outdated plan that no longer reflects the family's actual asset or residence position; and conflict between the governing law of the will and the mandatory rules of the CIS jurisdiction where enforcement is sought. A secondary risk is delay – succession disputes that cross jurisdictions are slow and expensive to resolve through the courts. A reviewed and updated estate plan, coordinated across the relevant systems, is the most direct way to reduce each of these exposures.

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

Update: a will and estate plan covering assets in the CIS

What the current environment means for CIS-connected estate plans

Who is affected and where the risk concentrates

What to do now

Frequently asked questions

Speak with Lockhart & Yip

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