Succession planning across Hong Kong and Mainland China

For a family with assets in both Hong Kong and the Mainland, succession is not a single legal event. It is a collision between two distinct systems, two sets of rules on what a person may or may not leave, and – in many cases – a third or fourth system governing the offshore structure that sits above them all. The question that arrives at our desk is rarely abstract. It comes attached to a concrete trigger: a principal approaching residency change, a Mainland property transfer that stalled at probate, or a sudden awareness that the family's holding structure was built for tax, not for succession.

Succession planning across Hong Kong and Mainland China requires a documented, jurisdiction-by-jurisdiction analysis of which law governs each asset class, how forced-heirship rules in the Mainland interact with common-law instruments structured under Hong Kong's Trustee Ordinance (Cap. 29), and what steps preserve testamentary freedom for a principal whose family map spans both sides of the boundary. The governing instruments are the Trustee Ordinance as reformed in December 2013, the relevant Mainland civil code provisions, and – where offshore holding entities are involved – the trust or corporate laws of the relevant offshore centre.

This page sets out how Lockhart & Yip structures that analysis, what the engagement looks like step by step, and where locally licensed Hong Kong counsel join the work. If your position is already in motion – a probate dispute, a recently triggered residency change, or a structure that no longer reflects the family's intentions – the route is the same; the starting point is simply different.

When does a foreign principal actually need this?

The trigger for most succession engagements is not a death. It is a decision – a residency change, a Mainland property acquisition, a new child born in a different jurisdiction, or an adviser's question about what happens to the BVI holdco if the principal dies intestate. Each of those events creates a moment of exposure. The family's existing documents – a will drafted in one jurisdiction, a trust deed governed by another law, a Mainland real-property title in the principal's name – were designed for a different moment.

In our cross-border practice, we see the same fact patterns recur. A Mainland-based principal with a Hong Kong permanent-resident spouse holds operating assets in the PRC and investment assets through a BVI structure. The will was drafted locally, in Mandarin, and addresses only the Mainland estate. The BVI structure has no succession mechanism. The Hong Kong and offshore assets will pass under intestacy rules or trust default provisions that no one has read. That is the most common version of this problem. It is also the most correctable, before the event.

The second trigger type is residency. A principal moving to Hong Kong – or departing it – changes the centre-of-gravity of their estate. The private-wealth considerations at that point extend well beyond tax: which law governs moveable assets, whether a Hong Kong-law trust now provides the strongest protection, and whether existing documents must be re-executed or simply supplemented.

The third trigger is an enforcement event. A Mainland court decision on inheritance, a disputed property transfer, or a creditor claim against the estate of a Mainland national – these arrive without warning and immediately raise the question of which documents the family has and whether those documents will be recognised across the boundary.

What does the governing legal environment actually look like?

Hong Kong and the Mainland operate entirely distinct succession regimes. Understanding the boundary between them is the first analytical step in any cross-border succession engagement.

Hong Kong operates under common law. The Trustee Ordinance (Cap. 29), substantially reformed with effect from 1 December 2013, provides a well-tested statutory platform for trust-based succession planning. That reform abolished the rule against perpetuities for Hong Kong trusts – meaning a properly structured Hong Kong-law trust can hold assets across generations without the time constraints that apply in many other common-law systems. The 2013 reform also strengthened Hong Kong's firewall provisions: a trust governed by Hong Kong law is protected against foreign forced-heirship claims, meaning that even if a Mainland court applies forced-heirship rules to the principal's estate, that claim does not automatically reach assets settled into a Hong Kong-law trust.

Hong Kong law has no forced-heirship regime of its own. A Hong Kong-domiciled principal can, in principle, leave their estate to whoever they choose. The statutory protection for reserved powers is also relevant here: under the 2013 reform, a trust is not invalidated under Hong Kong law merely because the settlor retained certain powers over the trust property. That gives principals a degree of flexibility that is simply unavailable in civil-law systems.

The Mainland operates under a different model. The PRC Civil Code – and the succession provisions within it – applies mandatory rules on inheritance, including statutory shares for certain classes of heir. Real property situated in the Mainland is governed by Mainland law regardless of the domicile of the deceased. A Mainland national dying with immovable assets in the Mainland cannot avoid that jurisdiction's succession rules through a foreign will or trust alone. The interface between these two systems is the central analytical problem for any family with exposure on both sides of the boundary.

Where offshore holding entities are involved – a BVI company sitting above a Mainland-connected Hong Kong opco, for example – the succession question extends further. The shares in that BVI company are moveable property for conflict-of-laws purposes, and their succession treatment depends on multiple factors: the principal's domicile at death, the applicable conflict rules in the jurisdiction seized of the matter, and whether a trust or other succession mechanism already governs the shares.

How does the cross-border interface actually work?

The practical boundary between Hong Kong and Mainland succession law runs through three asset-class questions: where is the asset situated for legal purposes, which law applies to that asset on death, and what procedural steps are required to transfer or realise it.

For Mainland-situated immovable property – residential, commercial, or agricultural land-use rights – the rule is clear. Mainland law governs. A foreign will, even one drafted under Hong Kong law by a qualified Hong Kong solicitor, must still be probated or recognised through Mainland procedures. The practical sequence involves notarisation, translation, and engagement with the relevant Mainland notary office and local civil affairs or court system. That process takes time, and its outcome is governed by Mainland procedure, not by the common-law probate process that applies in Hong Kong.

For Hong Kong-situated assets – listed securities, bank deposits in Hong Kong accounts, Hong Kong real property – the Hong Kong courts and the common-law probate regime apply. A grant of probate from the Court of First Instance is the mechanism that authorises an executor to deal with those assets. Where a valid will exists and is properly executed, that process is relatively direct. Where there is no will, or where the will's validity is contested, the process is more protracted.

The enforcement interface between the two systems is sharper than many principals realise. Since 29 January 2024, the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance (Cap. 645) has provided a registration mechanism for Mainland judgments in Hong Kong courts and a certified-copy mechanism for Hong Kong judgments used in the Mainland. But the scope of that regime explicitly excludes certain succession-related matters. A Mainland court's ruling on the division of an estate does not register automatically in Hong Kong under Cap. 645. The practical consequence is that contested cross-border succession matters must be managed in both systems, through coordinated but separate proceedings, rather than through a single unified enforcement route.

This is where the structuring work done before the event has the most value. A Hong Kong-law trust settled with assets above the Mainland operating structure, with a properly documented letter of wishes and a trustee in a position to act, reduces the role of any post-death court process significantly. The comparison with a Cayman-based structure is instructive: the Cayman trust regime also offers strong creditor and forced-heirship protection at the offshore level, but the recognition of that protection in a Mainland succession dispute follows different reasoning and requires different documentation than a Hong Kong-law trust does.

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 your family's cross-border position maps onto these two systems, write to us at info@lockhartyip.com.

How Lockhart & Yip runs the engagement – step by step

A succession-planning engagement in this practice begins with a structured map of the family's asset and residency position. That map is not a financial audit. It is a legal-exposure document: which assets sit in which jurisdiction, which law applies to each on death, what documents currently govern each asset class, and where the gaps are.

Step one is the intake brief. The principal – or, frequently, the family's existing adviser – provides a summary of the family structure: residency of the principal and key family members, asset classes and their situs, existing documents (wills, trust deeds, company articles, shareholder agreements), and the specific trigger that has brought the matter to a head. We review that material and identify the jurisdictions engaged.

Step two is the jurisdiction-by-jurisdiction analysis. We assess the succession treatment of each asset class under the applicable law, the forced-heirship exposure at each level of the structure, and the interaction between existing documents. Where the matter requires Hong Kong law advice – on the validity of a Hong Kong-law trust, on the probate process, or on the application of the Trustee Ordinance – we engage locally licensed Hong Kong firms. Their role is documented and coordinated; the cross-border analysis and structuring strategy remain with us.

Step three is the recommendations document. This sets out, in plain terms, the structural changes required and the sequence in which they should be made. That sequence matters: a trust settled before a forced-heirship risk crystallises is treated differently, under most conflict-of-laws analyses, from one settled after. The timing of transactions, the execution of new wills, and the transfer of assets into a trust structure all carry sequencing implications.

Step four is implementation. We prepare or coordinate the preparation of the trust deed, the letter of wishes, any supplemental will instruments, and the documentation for transfers or restructuring steps. Where Mainland-law matters arise – notarisation, Mainland property arrangements, or coordination with the principal's Mainland legal advisers – we work with the principal's existing Mainland counsel or identify appropriate allied counsel admitted in the relevant jurisdiction.

Step five is the review cycle. A succession structure is not a one-time document. Residency changes, new assets, new family members, and changes in the applicable law all create review triggers. We set out a forward review schedule as part of the engagement.

A mid-size Asian family group with operating assets in the Mainland and a BVI holding structure above a Hong Kong intermediate came to us in the second half of 2026. The principal held a Hong Kong permanent-resident status but was spending a majority of time in the Mainland for business reasons. The existing estate documents – two wills, one Mainland and one Hong Kong, both drafted years earlier – did not address the BVI holding layer at all, and the trust deed governing the BVI shares was silent on succession. We mapped the exposure across all three levels, settled a Hong Kong-law trust over the BVI shares with reserved powers for the principal, and coordinated the re-execution of both wills to remove inconsistencies. The process took three working cycles. The Mainland property was addressed through allied counsel in the relevant city, working to a brief we prepared.

If an earlier filing, structure or enforcement attempt produced an adverse or stalled result, a second read can identify the strategic error and the routes still open. Write to us at info@lockhartyip.com.

What documents and decisions must the principal own?

Cross-border succession planning produces a set of documents. But the documents are not the plan. The plan is the set of decisions that the documents record. A principal who understands those decisions – and keeps them current – holds the structure together. One who treats the documents as a set-and-forget file creates exactly the fragility that the planning was meant to remove.

The core document set for a Hong Kong–Mainland cross-border succession engagement typically includes the following. First, a domicile and residency assessment. This is not a tax document, though it has tax implications. It is a legal-status record that determines which law applies to the principal's moveable assets on death. Second, a will – or, more commonly, multiple wills – governing assets in each relevant jurisdiction. A Hong Kong will deals with Hong Kong-situated assets and, in some cases, the shares of offshore holding entities. A Mainland will, drafted and executed in compliance with Mainland formalities, addresses Mainland-situated assets. The two must be consistent; a conflict between them creates exactly the probate litigation the planning is meant to avoid.

Third, and most significant in structural terms, is the trust deed. Where a Hong Kong-law trust is used, the deed governs the transfer of assets, the trustee's powers, the class of beneficiaries, and the default succession provisions. The letter of wishes – not legally binding but practically essential – gives the trustee guidance on the principal's intentions that the trust deed cannot set out in legally enforceable terms. Fourth, any shareholder agreement or articles amendment that addresses what happens to shares in the event of the shareholder's death. This is frequently overlooked in structures that were built for operating efficiency rather than succession.

The decisions the principal must own are simpler to state, though sometimes harder to resolve. Who are the intended beneficiaries? In what proportions? What happens if a beneficiary predeceases the principal? Who acts as executor, and does that person have the capacity and willingness to act across multiple jurisdictions? Who is the trustee, and does the trustee have the experience and the geographic reach to administer a structure with assets in Hong Kong, the Mainland, and an offshore centre? These are not legal questions that an adviser can answer on the client's behalf. They are personal decisions that the legal structure then translates into enforceable instruments.

The interaction between those decisions and the forced-heirship rules in the Mainland is the point of greatest risk. A Mainland national who intends to leave assets unequally among children, or to exclude a statutory heir entirely, cannot simply do so by executing a Hong Kong will. The Mainland succession rules apply to Mainland-situated assets regardless. The structuring question is therefore how much of the principal's overall wealth is held in a form and through a vehicle that is shielded from those rules by the time of death. Asset-protection structuring for principals with cross-border exposure is a related discipline that often runs in parallel with the succession work.

What foreign advisers and principals consistently get wrong

The most common misconception in cross-border succession planning across Hong Kong and the Mainland is that a Hong Kong will, drafted by a qualified practitioner and properly executed, provides a complete solution. It does not. A Hong Kong will is a valid instrument for Hong Kong-situated assets. It has no automatic effect on Mainland-situated assets. The Mainland succession process is separate, governed by Mainland law, and cannot be short-circuited by the existence of a foreign will, however well drafted.

The second misconception concerns trusts. Many principals believe that settling assets into a trust – any trust, in any jurisdiction – removes those assets from the scope of forced-heirship claims. That is not universally true. The degree of protection depends on the law governing the trust, the circumstances of the settlement, and – critically – the extent to which the trust genuinely transferred control of the assets. A trust settled shortly before death, or one in which the principal retained such extensive reserved powers that beneficial ownership arguably never moved, will face challenge. Hong Kong's statutory protection for reserved powers applies under Hong Kong law; it does not bind a Mainland court that is evaluating the same transaction under Mainland conflict-of-laws principles.

The third misconception is that cross-border succession planning is a one-time engagement. The family's position changes. The law changes. The structure that was appropriate when the principal was a Mainland resident with a single operating entity looks different when that same principal has Hong Kong permanent-resident status, two offshore holding layers, a new spouse, and assets in a third jurisdiction. The review cycle is not optional. It is the mechanism that keeps the structure aligned with the family's actual position.

A fourth error that we see regularly involves the sequencing of Mainland property transfers. Some principals attempt to transfer Mainland property to family members during their lifetime – a gift transaction – as a substitute for succession planning. That approach has its own costs, including potential gift-tax exposure and the loss of control over the asset. It also does not resolve the succession question for the principal's other assets. Lifetime transfers and succession planning are complementary, not alternative, strategies.

Self-assessment: does your current position hold up?

The following questions are not legal advice. They are a prompt for reflection. If the honest answer to more than two is "I'm not sure" or "no", the current position almost certainly has a gap that warrants attention.

• Does a valid will – in the correct form for the jurisdiction – govern each material class of asset you hold?
• If you died tonight, is it clear who has authority to act for your estate in Hong Kong and in the Mainland, and do those persons have the legal capacity to do so in each jurisdiction?
• Is there a trust or other legal vehicle in place that governs the succession of your offshore holding entities, and has a lawyer reviewed that vehicle's deed and letter of wishes in the last three years?
• Are the forced-heirship rules applicable to your Mainland-situated assets understood, and has the structure been designed with that exposure in mind?
• If your residency or domicile changed tomorrow, would the existing documents still reflect your intentions and comply with the formalities of the applicable law?
• Do your executors and trustees know they have been appointed, and do they understand what will be required of them across two or more legal systems?
• Has anyone reviewed the interaction between your succession documents and the shareholder agreements or articles of association governing your operating and holding entities?

A "no" to any of these is a concrete starting point for an engagement. The purpose of this checklist is not to suggest that the planning is more complicated than it is. It is to identify where the specific gap sits, so that the work is targeted rather than general.

Related practices and the next move

Related practices

• Private Wealth – succession, residence, trust and asset-protection structuring for international principals
• Holding Structures – BVI, Cayman and Hong Kong intermediate holding-layer design and implementation
• Tax Positions – FSIE, profits-tax structuring and treaty-position analysis for cross-border groups

The cross-border succession question is solvable. The variables are the family's asset map, the jurisdictions engaged, the existing documents, and the time available before an event crystallises the exposure. None of those variables requires an outcome to be guaranteed; what they require is an analysis that is accurate, a structure that is legally sound in each relevant jurisdiction, and a document set that the family – and the courts, if necessary – can rely on.

To map the options for succession across Hong Kong and the Mainland and to receive a structured read on your family's current position, write to us at info@lockhartyip.com.

Speak with Lockhart & Yip

For a scoped view of your matter, contact info@lockhartyip.com. Discuss your matter →

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