On this blog, we write a lot about insurance as a way to protect yourself and your loved ones. We always advocate getting home insurance to protect your valuables, business insurance to protect what you have built, and life insurance to protect your family should the worst happen to you.

But as risk managers, we take a holistic approach to helping you protect what is near and dear to your hearts. Today, we have invited our good friend and partner Natalie Smith from Lutea HK to share about another important risk management tool to use alongside a comprehensive life insurance policy: wills.

Lutea has been providing trustee & advisory services to residents of Hong Kong and Asia for over 25 years and focus on helping private individuals, families and businesses around the world maintain family wealth and ensure succession throughout the generations. They do this with practical and holistic succession planning, trusteeship of family trusts and pension schemes, International will drafting, company incorporation and administration services and UK tax advice. As a global organization, they have offices in Jersey, Hong Kong, Singapore, Anguilla, and the UK. Lutea prides itself on personal service and employs modern technology to meet the evolving needs of their clients.

Natalie Smith is an English Solicitor admitted to the Supreme Court of Justice (Superior Courts) of England & Wales in 2003. Prior to her role at Lutea and relocating to Hong Kong, she has worked extensively in Wills, Tax & Estate planning, and Trust & Company structure. Family offices, international entrepreneurs, law firms, and ‘Big 4’ Accountancy Firms have all sought her expertise in these areas. After nearly 2 decades of practice, she joined Lutea (Hong Kong) as Director in November 2019.

We are very proud and excited to have her write a guest post sharing her expertise with our clients and readership. This is a very complex topic without any one-size-fits-all solutions. To learn more or to retain her services, get in touch through the Lutea (Hong Kong) Limited website.

What Is a Will?

Put simply, a will is a legal document that determines who receives assets from your estate when you pass. Without a Will, your assets will be distributed according to a hierarchy laid down in the law which may not be the same as what you intended. In your Will, you will also appoint Executors who will be responsible for administering your estate according to your wishes.

No matter what your personal circumstances are, it is vital that you have a properly executed Will to ensure your estate is handled in accordance with your wishes.

Why Is a Will Important?

A Will is important because it is a formal expression of how you want your assets to be distributed when you pass. It is an important legal document that should be created with careful consideration, discussion with family members, and drafted by professionals. The biggest risk of not having a Will is that assets are distributed in a way that is counter to your wishes.

If no Will is left, there may also be increased legal fees and expenses and longer administration periods associated with distributing the assets to beneficiaries as it would involve a lengthy legal process.

Having a well structured will in place also helps reduce infighting amongst beneficiaries and surviving family members. Without a Will, some family members may feel the assets were distributed unfairly which could lead to legal proceedings further delaying the process, eat away at the estate’s assets, and inflaming tensions within a family or business. To avoid this, you should craft a will after lengthy discussions with relevant family members and legal experts to craft a solution that meets everyone’s needs.

Tax Planning

Wills are much more than just instructions on how the assets of your estate are to be distributed. It can also be used as a tax planning tool and - must like a life insurance policy - to ensure that vulnerable family members are well cared for in your absence.

A Will allows you to make provisions for young and vulnerable beneficiaries. This can include preserving assets for your chosen beneficiaries or appointing a trusted relative or friend to act as their Guardian until they come of age.

It is also the cornerstone of any good estate or financial plan. Over their working years, many of our clients have substantial assets in different countries all over the world. At Lutea, we take very careful consideration in the making of a Will or Wills for assets in each jurisdiction to avoid difficulties and unintended consequences when it comes time to distribute the estate’s assets.