HONG KONG SAR, CHINA Law and Practice Contributed by: Alfred Ip, Hugill & Ip
For adults with intellectual or physical disabilities, a discretionary trust is the preferred vehicle, as it allows the trustee to make distributions tailored to the benefi - ciary’s specific needs without the beneficiary having a fixed entitlement that might affect their eligibility for government benefits or social welfare assistance. The government’s Special Needs Trust Scheme, adminis - tered by the Director of Social Welfare, provides an affordable and regulated option for parents of children with special needs to make provision for their long- term care. For a comprehensive insight into trusts for special needs beneficiaries, see Bridging Legal Gaps: Estate Planning for Families with Special Needs. 8.2 Appointment of a Guardian The appointment of a guardian for a minor child can be affected by a parent through a will, without the need for court proceedings, under the Guardianship of Minors Ordinance (Cap. 13). The appointment takes effect on the death of the appointing parent (or the death of the surviving parent, if both parents have appointed guardians). This is a straightforward yet crucial element of estate planning for parents of underage children. For adults who have lost mental capacity and for whom no Enduring Power of Attorney (EPA) is in place, the process of obtaining legal authority to manage their affairs is more complex and costly. Two princi - pal routes are available. First, an application may be made to the Guardianship Board for a guardianship order under the Mental Health Ordinance (Cap. 136). A guardianship order may grant the guardian the power to make decisions about the incapacitated person’s welfare and, in limited circumstances, their finances. Alternatively, an application may be made to the High Court for a Part II Order under Cap. 136 to appoint a committee of the estate, who will have authority to manage the incapacitated person’s property and financial affairs. Both processes require medical evi - dence of incapacity and are subject to ongoing court or Board supervision. The committee of the estate must account to the court for all dealings with the
and property matters. Under the Enduring Powers of Attorney Ordinance (Cap. 501), a donor may appoint one or more attorneys to manage their property and financial affairs in the event that they subsequently lose mental capacity. The EPA must be executed whilst the donor has full mental capacity, in the pre - scribed form, in the presence of a solicitor (who must certify that the donor understood the nature and effect of the document) and a registered medical practitioner (who must certify that the donor was mentally capable of making the EPA at the time of execution). A critical limitation of the current EPA regime is that it covers only financial and property decisions; it does not extend to decisions about personal welfare or medical treatment. For end-of-life medical deci - sions, individuals may execute an Advance Medical Directive (AMD), which allows a mentally competent adult to refuse specified life-sustaining treatments in the event of a terminal illness, a persistent vegetative state, or other specified end-of-life conditions. The AMD regime was placed on a statutory footing by the Advance Decision on Life-sustaining Treatment Ordi - nance. For detailed practical guidance on EPAs, see Endur - ing Power of Attorney: Practical Considerations and Private Client Explained: Powers of Attorney. 8.4 Elder Law Hong Kong’s rapidly ageing population ‒ with the pro - portion of residents aged 65 and above projected to reach 36% by 2066 ‒ has brought elder law to the fore - front of the private wealth agenda. Legal practitioners are increasingly called upon to advise on a holistic suite of incapacity planning tools, combining EPAs, AMDs, trusts, and family governance arrangements to ensure that elderly clients are protected and their wishes are respected. A significant gap in the current framework is the absence of a mechanism for appointing an attorney to make personal welfare and healthcare decisions. The Law Reform Commission has recommended the introduction of a Continuing Power of Attorney (CPA) regime, which would extend the scope of the EPA to include personal care decisions. The Law Reform Commission’s report on Enduring Powers of Attorney:
incapacitated person’s assets. 8.3 Planning for Incapacity
The Enduring Power of Attorney (EPA) is the corner - stone of incapacity planning in Hong Kong for financial
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