Matter note: a will and estate plan covering Mainland

Succession planning for a family whose wealth spans Mainland China and Hong Kong looks straightforward on paper. In practice, the legal systems diverge at the points that matter most: what constitutes a valid will, which forced-heirship rules apply, and how title to Mainland-situated property actually transfers on death. A plan built around one system only – however well-drafted – frequently fails at the boundary.

A will and estate plan covering assets in Mainland China requires coordination across at least two legal systems: Hong Kong common law and Mainland civil law, including the Civil Code's succession chapter. The governing instruments include the Trustee Ordinance (Cap. 29) on the Hong Kong side, and the Mainland's own succession and real-property registration rules on the other. The sequencing of documents, the choice of governing law, and the treatment of forced-heirship provisions must each be addressed before the plan can hold together across the boundary.

This matter note describes an anonymised instruction in which a family with mixed Mainland and Hong Kong assets sought a unified succession plan. The route, the turning point, and the transferable lessons are set out below.

The situation and the constraint

The principal was a founder-generation entrepreneur, resident in Hong Kong, with significant privately held assets on both sides of the boundary. On the Mainland, the assets included interests in operating companies and residential real property registered in the principal's name. In Hong Kong, the position included liquid financial assets, an interest in a family company, and an existing testamentary document that had been drafted some years earlier by foreign counsel who were not engaged with the Mainland dimension.

The family included adult children from two relationships. That configuration immediately raised a forced-heirship question. The Mainland's Civil Code contains a bìliú fèn (reserved share) provision: certain close relatives are entitled by law to a minimum portion of the estate, and a testamentary disposition that purports to exclude them entirely may be challenged before a Mainland court.

Hong Kong, by contrast, has no forced-heirship regime. The 2013 reform of the Trustee Ordinance strengthened the position further: a Hong Kong trust is not invalidated by the settlor reserving certain powers, and the reform expressly reinforced the protection of Hong Kong-law trusts against foreign forced-heirship claims. That protection is meaningful – but only for assets governed by Hong Kong law. Mainland-situated assets are a different matter.

The constraint was this: the existing will was a single English-language document drafted under Hong Kong law. It made no distinction between asset classes by situs. It had never been authenticated for Mainland purposes. And it had not been reviewed against the forced-heirship entitlements of the family members who resided on the Mainland.

The cross-border issue: what does succession look like across the boundary?

The Mainland and Hong Kong apply different succession regimes, and neither automatically recognises the other's documents without a further process. The Mainland's approach to succession of real property follows the lex situs rule: the law of the place where the property is situated governs how it passes on death. For residential property in a Mainland city, that means Mainland succession law applies, regardless of the deceased's Hong Kong residence or the existence of a Hong Kong will.

What does that mean in practice? First, a Hong Kong will must be authenticated – typically through a notarisation and legalisation process – before it can be used in Mainland succession proceedings. A document that has not gone through that chain is not operative in a Mainland registry or court context. Second, even an authenticated Hong Kong will cannot override the Mainland's forced-heirship provision where the asset is Mainland-situated property. The two points together mean that the existing will, had the principal died without revision, would have generated a contested Mainland proceeding.

The Hong Kong-side assets presented a different question. Under the existing document, the Hong Kong company interest would pass through probate. But with children from two relationships, the prospects of a contested family provision application – a challenge brought by a dependant seeking greater provision from the estate – needed to be assessed. Hong Kong law permits such applications, and the risk is heightened where the testamentary document predates the second relationship.

Our cross-border private wealth desk identified four interlocking problems: authentication gaps; a forced-heirship exposure on the Mainland side; a family-provision risk on the Hong Kong side; and a structural mismatch between how the operating assets were held and how they were being treated in the succession plan.

The route chosen and the turning point

The instruction proceeded in parallel workstreams rather than sequentially. Waiting to resolve the Mainland position before addressing the Hong Kong documents – or the reverse – would have left the family exposed during the planning period. That is a common structural error: advisers who treat the two systems as successive rather than concurrent lose time and, occasionally, lose the window when health or capacity deteriorates.

On the Hong Kong side, the first step was a comprehensive review of the existing will against the current asset schedule and the family configuration. The document was found to be revocable and capable of redrafting. A revised Hong Kong will was prepared, with an express clause limiting its scope to assets situated in Hong Kong and in any jurisdiction where Hong Kong law is chosen as the governing law of succession. That scoping clause is not cosmetic. It prevents the document from being read as a purported disposition of Mainland assets – and the forced-heirship conflict that would follow.

Separately, we advised the principal on the use of a Hong Kong trust for the financial assets and the Hong Kong company interest. The Trustee Ordinance reform of 1 December 2013 provides the foundation: reserved-powers trusts are expressly protected, and the firewall provisions strengthen the position against foreign-law claims on the trust fund. That structure moved the financial assets outside the estate for succession purposes, reducing both probate exposure and the scope for a family-provision challenge on those assets.

The Mainland dimension required allied counsel admitted in the relevant jurisdiction. The instruction here was to advise on the structural options and to coordinate the cross-border documentation package; the Mainland-law execution elements were handled by locally licensed counsel with whom we work. The turning point in that workstream came when the family's existing documentation was reviewed against the Mainland succession process. It became clear that the Mainland real property would need to pass through a notarial succession (or, if contested, a people's court proceeding). A Mainland-side will, drafted in Mandarin and authenticated in accordance with Mainland notarial requirements, was the appropriate vehicle for those assets. That document was prepared and executed in a Mainland city by the relevant notarial office.

The two wills – one for Hong Kong-situated assets, one for Mainland-situated assets – operated as a coordinated pair. Each was scoped by situs. Neither purported to govern what the other covered. And the Mainland will was drafted to work within, rather than against, the forced-heirship provision: the reserved share of each entitled family member was acknowledged, with the residue allocated according to the principal's wishes.

The turning point in the instruction was the moment the family accepted that a single-document solution would not work. That acceptance came only after the forced-heirship exposure was quantified – not as a precise sum, but as a real litigation risk with a realistic chance of success for the challenging party. Once the risk was visible, the two-document structure and the trust overlay became the obvious route.

Sequence, execution, and what was left open

The execution sequence was broadly as follows. The Hong Kong will was prepared and executed first, given its relative procedural simplicity. The trust structure was structured concurrently and implemented over the following weeks, following review of the asset-transfer steps and the stamp duty position on the transfer of Hong Kong stock. The Mainland will was executed third, timed to align with a visit to the Mainland city where the notarial office had jurisdiction over the relevant property.

The instruction also flagged two matters that remained open at completion and that the family would need to revisit. First, the operating company interests on the Mainland were held directly in the principal's name rather than through a holding structure. Direct personal holding of Mainland operating interests creates a succession difficulty that neither will addresses fully: the transfer of those interests on death requires a separate corporate process, and that process is governed by the company's articles and the Mainland corporate rules, not by the succession instruments alone. Restructuring the holding was identified as a priority for the next phase.

Second, the principal's tax residence had not been formally reviewed against either the Hong Kong or Mainland tax position. That is a linked question – not for the succession documents themselves, but for the trust structure: the tax-residence analysis affects how the trust's income is characterised and where it is taxable. We flagged the interaction and recommended a standalone tax review coordinated with the estate plan. The FSIE (foreign-sourced income exemption) regime, in force from 1 January 2023 as amended, was one of the instruments to be reviewed in that context.

For a broader discussion of how reserved-powers trust structures operate in the context of a founder-controlled business, see our related matter note on reserved powers trusts and founder-controlled businesses. The private wealth practice overview, including our approach to succession and asset-protection structures, is at our private wealth practice page. Clients considering a trust structure with a Singapore dimension may also find our guide on private trusts for family assets – Singapore useful as a comparator.

The sequence above describes the standard position for a matter of this type. Your situation turns on the specific asset schedule, the family configuration, the jurisdictions engaged, and the documents already in place. Those variables determine which workstreams run in parallel and which need to be resolved in a defined order.

If an existing will or succession plan was drafted without reference to the Mainland dimension, or if the family's composition has changed since the plan was prepared, the exposure is real and the window for pre-emptive action is not unlimited. To discuss your position, contact us at info@lockhartyip.com.

The transferable lesson: succession planning is a cross-border exercise

The instruction described above is not unusual. Our cross-border private wealth desk regularly sees plans that work well for one jurisdiction and create unresolved exposure in the other. The pattern is consistent: the plan was drafted by counsel admitted in one system who had no visibility into the other, and no one commissioned a cross-border review until a triggering event – a health scare, a family dispute, or a change in the composition of the estate.

What are the structural lessons? There are three that apply across most Mainland-Hong Kong succession instructions.

First: scoping by situs is not optional. A will that does not define which assets it governs creates ambiguity at precisely the moment when the estate is under stress and the parties are most likely to disagree. A scoped will – or a pair of wills, each covering the situs-appropriate assets – removes that ambiguity at a known cost, rather than leaving it to be resolved by litigation at an unknown one.

Second: forced-heirship rules must be assessed at the outset, not as an afterthought. The Mainland Civil Code's reserved-share provision is not easily contractable-out. A plan that ignores it does not neutralise it – it simply leaves the risk unquantified. Quantifying it early allows the family to decide, deliberately, how much of the estate to ring-fence and how the residue should pass.

Third: a trust structure on the Hong Kong side changes the succession analysis materially. Assets settled into a properly constituted Hong Kong trust do not form part of the principal's estate for probate purposes. The Trustee Ordinance, as reformed with effect from 1 December 2013, provides the statutory foundation. That change was not incidental: it was a deliberate legislative decision to make Hong Kong-law trusts more resistant to the kind of cross-border forced-heirship claims that affect families with assets and family members in multiple jurisdictions. The protection is real, but it is jurisdiction-specific. Mainland assets, once again, are outside its reach.

If an earlier planning exercise was conducted without this cross-border lens, a review is the appropriate next step. That review does not require starting from scratch. It requires identifying where the plan's boundaries are, which exposures sit outside them, and which instruments address those exposures most efficiently.

If a prior succession plan has produced an adverse outcome, or if a family is approaching the planning exercise for the first time, a structured cross-border review can identify the gap and the route to close it. To discuss your position, write to us at info@lockhartyip.com.

Related practices

Private Wealth – succession, trusts, asset protection and family-office structuring across Greater China
Holding Structures – cross-border holding architecture for Mainland, Hong Kong and offshore assets

Frequently asked questions

What documents are needed for a will and estate plan covering assets in Mainland China?

A plan covering both Mainland and Hong Kong assets typically requires two coordinated instruments: a Hong Kong will scoped to Hong Kong-situated assets, and a Mainland will executed in accordance with Mainland notarial requirements, covering Mainland-situated assets including real property and company interests. Where a Hong Kong trust is used for financial or business assets, the trust deed and transfer documents form part of the package. Authentication of the Hong Kong will for Mainland use is a separate, necessary step. Parties should verify the current authentication requirements before acting.

Do I need a Hong Kong adviser for a will and estate plan covering assets in Mainland China?

A Hong Kong-qualified or internationally based adviser with cross-border succession experience is important where the estate includes Hong Kong-situated assets, a Hong Kong trust structure, or a family configuration that raises forced-heirship questions across the boundary. The Mainland dimension requires locally licensed counsel admitted in the relevant Mainland jurisdiction. In our cross-border practice, we coordinate both workstreams: advising on the international and Hong Kong-law side, and working alongside locally licensed Mainland counsel on the execution elements. A single-jurisdiction approach – Mainland only, or Hong Kong only – routinely leaves material gaps.

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

The principal risks are: a will that fails for want of authentication in the Mainland; a forced-heirship challenge under the Mainland Civil Code's reserved-share provision, which cannot be excluded for Mainland-situated assets; a family-provision application in Hong Kong against an estate that predates a change in family composition; and a structural mismatch between how operating assets are held and how the succession instruments treat them. A trust structure on the Hong Kong side significantly reduces estate exposure for Hong Kong-situated assets, but does not address Mainland assets. Each risk must be assessed against the specific asset schedule and family configuration.

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

Matter note: a will and estate plan covering assets in Mainland China