Forced-heirship and cross-border succession

A family with assets in three jurisdictions and heirs with different nationalities is not an unusual client profile. It is, however, a succession problem waiting to happen. The question is not whether forced-heirship rules apply somewhere in that family's map – they almost certainly do. The question is which system's rules will govern which assets, and whether the documents already in place are capable of withstanding a challenge under the law that actually matters.

Forced-heirship risk in a cross-border estate arises when a foreign legal system reserves a fixed portion of an estate for designated heirs, and that system's rules reach assets or persons connected to it – regardless of what the will or trust says. Hong Kong law imposes no forced-heirship regime, and the Trustee Ordinance (Cap. 29, as reformed with effect from 1 December 2013) includes statutory protection against foreign forced-heirship claims over Hong Kong-law trusts. The practical work involves mapping each asset class to the law most likely to govern it, identifying the exposure points, and building a structure that holds under challenge.

This page sets out how we approach that work with foreign principals who hold assets across Greater China, offshore holding centres, and European or Middle Eastern jurisdictions.

Who needs this service and what brings it to a head?

Most forced-heirship problems surface at the wrong moment – during an estate administration, a divorce, or a family dispute, when restructuring options are narrowed and timelines are compressed. The principals who come to us before that moment typically share a common profile: a founder or family-office principal who has built assets in multiple jurisdictions, has not updated succession documents since a material change of residence, corporate structure, or family composition, and holds a mixture of operating assets, real property, and offshore holding entities in BVI or Cayman vehicles.

The trigger is usually one of three events. A change of domicile or long-term residence brings a new forced-heirship system into the picture – French, German, UAE, and Mainland Chinese succession law all reserve portions of the estate for close relatives. A new family member arrives or a marriage ends, shifting the forced-heirship arithmetic. Or a structural transaction – a share transfer, a trust settlement, or an asset sale – exposes an inconsistency in the succession plan that had not been visible before.

For principals with any connection to Mainland China, the interaction between Chinese succession law and their offshore holding structure is a specific and recurring concern. We address that interaction directly in our analysis of will and estate planning covering assets in Mainland China and in our broader discussion of asset-protection positions for principals with Mainland China exposure.

What does forced-heirship actually mean in a cross-border context?

Forced-heirship is the legal mechanism by which certain legal systems reserve a fixed minimum share of an estate – the réserve héréditaire (the mandatory share guaranteed to close relatives under French and related civil-law systems) or its equivalent – for designated heirs, irrespective of the deceased's intentions expressed in a will or trust. The reserved portion typically benefits children, and in some systems a surviving spouse. What varies by jurisdiction is the fraction reserved, the assets it applies to, the lifetime gifts it reaches back to capture, and the remedies available to an aggrieved heir.

In a cross-border estate, the difficulty is that different systems claim jurisdiction over different assets or persons simultaneously. The law governing succession to movable assets in many civil-law systems follows the deceased's domicile at death. Immovable property – real estate – is almost universally governed by the lex situs (the law of the place where the property is situated). Shares in a company occupy uncertain middle ground: common-law systems tend to treat them as movables governed by the law of the deceased's domicile; civil-law systems may look through the holding entity to the underlying assets.

The practical effect for a principal domiciled in, say, Germany at death – but holding assets through a BVI holding company above a Hong Kong operating group and a Paris apartment – is that German forced-heirship law will govern the BVI shares as movables, French law will govern the apartment, and the Hong Kong operating assets will be governed by whatever the BVI constitutional documents and the Hong Kong companies structure provide. A will drafted in only one system will not address all three correctly.

How does Hong Kong sit in this cross-border picture?

Hong Kong is the structuring hub and, for many of our clients, the primary holding and banking location. Its position in a cross-border succession plan is significant for three reasons.

First, Hong Kong law imposes no forced-heirship obligation. There is no reserved portion, no legitim (the Scottish and civil-law concept of a minimum share for children), and no statutory right of children to a fixed share of a parent's estate. A principal who establishes a Hong Kong-law trust retains maximum testamentary freedom under the governing law of that trust.

Second, the Trustee Ordinance (Cap. 29), in its reformed form effective from 1 December 2013, provides a statutory firewall against foreign forced-heirship claims. The reform confirmed that a Hong Kong trust is not invalidated by reason only that it defeats a foreign forced-heirship entitlement. It also confirmed that a settlor's reservation of certain powers over a trust does not render the trust invalid – a feature that matters for principals who want to retain influence over how assets are managed or distributed without collapsing the trust structure.

Third, Hong Kong's common-law courts provide a well-tested forum for trust disputes, with an appellate structure that runs to the Court of Final Appeal and a body of trust law that is recognisable to practitioners from other common-law systems. For cross-border trust litigation that may involve enforcement in the Mainland, the Private Wealth practice draws on both the trust-law framework and the Mainland–HK mutual assistance mechanisms where relevant.

What Hong Kong does not do is create a safe harbour for every asset class. Real property situated in a civil-law jurisdiction will still be governed by the lex situs, regardless of how the holding structure above it is organised. The structuring work is therefore about placing assets in the most defensible configuration – not about pretending that one system governs everything.

How do we run the matter, step by step?

The engagement follows a defined sequence. Each stage produces a document or a decision that the client owns and that the structure depends on.

Stage 1: jurisdictional mapping. We produce a written map of each asset class – real property, operating company shares, financial assets, intellectual property rights, beneficial interests in existing trusts – against the legal system most likely to govern succession to that asset. This requires identifying the principal's domicile (the legal concept, not just factual residence), habitual residence, nationality, and the location of each asset or the registered seat of each holding entity. Where a jurisdiction has a treaty framework that modifies the default choice-of-law position – the EU Succession Regulation is the most significant example for principals with European exposure – we identify how that framework interacts with the principal's personal position.

Stage 2: forced-heirship exposure analysis. Against the jurisdiction map, we identify where a mandatory share regime applies, which heirs it benefits, what fraction of the estate it covers, and – critically – whether it reaches lifetime gifts or trust settlements made before death. Some systems apply a clawback mechanism that can unwind transfers made years before death if they had the effect of defeating the reserved portion. The analysis is specific to the principal's family composition and asset mix; generic conclusions are not useful here.

Stage 3: document review. We review the existing succession documents – will or wills, any existing trust deeds, shareholders' agreements with death or incapacity provisions, and any existing nomination instruments – against the exposure analysis. This review frequently identifies instruments that are legally valid under the law of the jurisdiction in which they were drafted, but that do not address the forced-heirship risk in another system, or that contradict each other when read together.

Stage 4: structure design and options paper. Based on the mapping and the document review, we prepare an options paper that sets out the available structuring routes. Common routes include: a Hong Kong-law discretionary trust over movable assets, using the Trustee Ordinance firewall as the primary protection mechanism; a change of domicile (or the establishment of a clearer domicile position) in a jurisdiction with no forced-heirship regime; restructuring of the holding chain so that operating assets in a forced-heirship jurisdiction are held through a company rather than directly; and the use of a floating charge or pre-arranged purchase mechanism over real property to reduce its net value for succession purposes. Each option carries implications for tax, substance, and governance, and we address those implications in the paper.

Stage 5: document preparation and coordination. We prepare or co-ordinate the preparation of the succession documents arising from the chosen structure. For Hong Kong-law trust deeds, we work with the trustees and, where relevant, the settlor's family-office advisers. For documents governed by the law of another jurisdiction – a French notarial will, a German Erbvertrag (an inheritance contract, binding on the parties under German law), a UAE will registered with the relevant court – we work with allied counsel admitted in the relevant jurisdiction. The locally licensed Hong Kong firms with whom we work handle any aspect that is specific to Hong Kong law.

Stage 6: review calendar and trigger events. A succession plan that is not reviewed is a succession plan that will be wrong within five years. We agree with the client a calendar of review events – typically tied to changes in family composition, residence, or the asset map – and a set of trigger events (a new jurisdiction of long-term residence, a change in the size of any individual forced-heirship estate above a material threshold) that require an unscheduled review.

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 this sequence applies to your family's position, write to us at info@lockhartyip.com.

What documents and decisions does the client own?

A succession engagement produces a set of instruments that the client must understand, hold securely, and maintain. The most important are the following.

The jurisdictional map is the foundation document. It records each asset class, the governing law, and the exposure analysis. It is a working document, not a filing. It should be reviewed whenever the asset map or the family's residence position changes. Without it, later advisers – in a different jurisdiction or a different engagement – cannot reconstruct the reasoning.

The will or wills must be drafted to respect the requirements of each jurisdiction in which they will be admitted to probate. For a principal with assets in multiple jurisdictions, this frequently means separate wills for different asset classes or jurisdictions, drafted to dovetail rather than contradict. The risk of contradiction is real: a universal residuary clause in one will can inadvertently revoke a specific bequest in another will drafted under a different system's formalities.

Where a trust structure is used, the trust deed and any letter of wishes are the client's primary instrument of testamentary intent. The letter of wishes is not legally binding, but it guides the trustee in the exercise of discretion. Its content, and the frequency with which it is updated, matters significantly if the trust is ever challenged. A letter of wishes that was last updated a decade ago, and that does not reflect the current family composition or asset mix, provides limited guidance and limited protection.

Shareholders' agreements and constitutional documents of holding entities frequently contain provisions about what happens to shares on the death of a shareholder. In a forced-heirship context, a drag-along or call option mechanism triggered by death can either protect the surviving shareholders from an unwanted heir becoming a co-owner, or – if badly drafted – create a conflict with the forced-heirship entitlement under the applicable law. We review these provisions as part of the document review stage.

Where the structure can fail: common errors by foreign principals

The most common error is jurisdictional optimism: the assumption that a Hong Kong-law trust, or a will drafted under English law, will govern the entire estate regardless of where assets are situated or what law governs the principal's personal status. It will not. A trust over a Paris apartment does not prevent a French forced-heirship claim over the apartment; the French courts will apply the lex situs to the real property regardless of the trust's governing law.

The second most common error is allowing the domicile position to drift without legal analysis. A principal who was clearly domiciled in the British Virgin Islands ten years ago, but who has since spent most of each year in France, may have acquired a French domicile by operation of law – without any affirmative step, and without any adviser having noticed. The effect is that French forced-heirship law now governs all movable assets worldwide. The trust structure built on the earlier domicile analysis no longer does what it was intended to do.

The third error is treating the succession plan as a one-time project. A structure that was correct at the time of implementation will be wrong by the time circumstances change – as they always do. The trigger events identified in Stage 6 of our engagement sequence are the mechanism by which a plan remains current.

A mid-market family-office principal with a BVI holding entity above a Mainland China operating group came to us in early 2026. Their existing will had been prepared by counsel in their then-home jurisdiction in Europe, and it was internally coherent under that jurisdiction's law. The problem was that their BVI entity held shares in a Hong Kong intermediate holding company, and they had since established long-term residence in a civil-law jurisdiction with a reserved-portion regime covering movables. The European will did not contain a professio iuris (an express choice of the nationality law as the governing law of the succession, available under the EU Succession Regulation), and the domicile position had shifted enough to make a challenge by a potential forced heir a real litigation risk. We restructured the holding chain and advised on the preparation of a new will with an express choice-of-law declaration, co-ordinating with locally licensed counsel in the relevant jurisdiction for the notarial element.

If an earlier structure or document produced an adverse result or an unresolved challenge, a second read can identify what went wrong and what routes remain open. Write to us at info@lockhartyip.com to discuss your position.

The decision matrix: situation, instrument, route, and timing

The structure of the problem determines the instrument and the route. The following scenarios cover the most common patterns we see.

Situation A: a principal domiciled in a common-law jurisdiction, holding primarily financial and corporate assets through a BVI or Cayman vehicle, with no real property in a civil-law jurisdiction. The forced-heirship risk is low but not zero: the domicile position should be confirmed, and the trust deed should include a governing-law clause and express submission to a common-law system. Route: a Hong Kong-law discretionary trust, using the Trustee Ordinance firewall, with a jurisdictional map confirming that no lex situs creates a residual exposure. Timing: at any point before a material change of residence or a significant asset acquisition in a civil-law jurisdiction.

Situation B: a principal with long-term residence in a civil-law jurisdiction (France, Germany, or a GCC state with an Islamic succession law), holding movable assets through a BVI entity, with the children having different nationalities. The forced-heirship risk is high. The available instruments include an express professio iuris under a treaty framework where available, a restructuring of the holding chain to reduce the value of the movable estate in the relevant jurisdiction, and – for GCC nationals – careful analysis of whether religious succession law applies to assets held through secular corporate structures. Route: the options paper at Stage 4 is essential before any instrument is executed. Timing: before death, before any contested family event, and certainly before any change of residence that would shift the domicile analysis.

Situation C: a principal with Mainland China connections – a citizen, long-term resident, or holder of significant Mainland assets – facing the interaction between Chinese succession law, the offshore holding structure, and a Hong Kong-law trust. The analysis must address whether Mainland succession law will reach the offshore corporate shares as movables, whether the trust structure over Mainland-situated assets is enforceable in the Mainland courts, and how the inheritance notary (the Mainland notarial institution through which estate administration for Mainland assets is conducted) interacts with the trust or will. Route: a co-ordinated approach involving the Hong Kong trust structure, a Mainland-compliant will or instrument for Mainland-situated assets, and verification of the holding chain's tax and substance position. Timing: as early as possible; the interaction between Mainland succession law and offshore structures is an area where early structuring produces significantly better outcomes than reactive restructuring.

Self-assessment checklist: where does your succession position stand?

The following questions are designed to identify the most common gaps. They are not a substitute for a structured legal assessment, but they indicate whether an immediate engagement is warranted.

Has your domicile position been formally confirmed in the past three years, taking into account your actual pattern of residence and the applicable legal tests in each jurisdiction where you spend material time?
Do you have a will that addresses each major asset class, and have those wills been checked for consistency with each other – specifically to confirm that none of them contains a clause that inadvertently revokes or overrides another?
If you have a trust, when was the letter of wishes last updated? Does it reflect your current family composition, your wishes regarding distributions to each beneficiary, and your current asset mix?
Does any jurisdiction in which you hold real property have a forced-heirship regime that applies to the lex situs of that property? Has that been addressed in your succession documents?
Do your shareholders' agreements and holding company constitutional documents contain death-triggered provisions? Have those provisions been reviewed for consistency with the succession plan?
If your family has members in different jurisdictions with different nationalities, have the forced-heirship implications of each family member's personal law been mapped?
Have you identified the trigger events that would require a review of your succession plan – and is there a person or process responsible for initiating that review?

A "no" or "uncertain" answer to more than two of the above indicates a succession plan that should be reviewed before the next material event in the family or the asset map.

Related practices

Private Wealth – succession, trust structuring, and family-office matters across jurisdictions
Holding Structures – designing and maintaining cross-border holding chains above Greater China operating assets

Frequently asked questions

What is the first step in addressing forced-heirship and cross-border succession risk?

The first step is a jurisdictional mapping exercise: identifying each asset class in the estate, the legal system most likely to govern succession to that asset, and whether a mandatory-share regime applies under that system. This produces a written record of the exposure points and the governing instruments before any drafting begins. Without this map, succession documents drafted in isolation frequently miss the most significant risks – particularly the interaction between the principal's domicile, the lex situs of real property, and the governing law of any existing trust or holding structure.

How does the cross-border element affect forced-heirship and succession planning?

The cross-border element means that multiple legal systems may each have a legitimate claim to govern part of the estate – and those claims may be inconsistent. A Hong Kong-law trust provides strong statutory protection under the Trustee Ordinance against foreign forced-heirship claims over the trust assets, but it does not protect real property situated in a civil-law jurisdiction, which will be governed by the lex situs regardless of the trust's governing law. The planning work involves addressing each system's claim separately and ensuring that the instruments in place are capable of being recognised and enforced in each relevant jurisdiction, including through co-ordination with allied counsel admitted in those jurisdictions. Parties should verify the current position in each relevant jurisdiction before acting.

What are the main risks in forced-heirship and cross-border succession planning?

The principal risks are: an unconfirmed or drifting domicile position, which can shift the governing law of the entire movable estate without any deliberate act; contradictory wills or succession instruments prepared by different advisers in different jurisdictions; a trust structure that was valid when established but that no longer reflects the asset map or family composition; and real property in a forced-heirship jurisdiction that is not addressed separately in the succession documents. The clawback risk – the ability of a forced heir to reach lifetime transfers made before death – is a further risk that applies in some civil-law systems and must be assessed specifically against the principal's transfer history.

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

Forced-heirship and cross-border succession risk