Government Adopts Special Needs Trust on back of Scholars’ Work

The parents and caregivers of Hong Kong individuals with cognitive impairment live with an agonising worry: since their children are unable to manage their own financial affairs, what will happen to them when they pass away? HKU law academics have played a key role in providing them with an answer.

Professor Lusina Ho and Ms Rebecca Lee, in collaboration with parents’ support groups, proposed a Special Needs Trust (SNT) that has recently been adopted by the Government. The SNT lets parents or caregivers leave funds from their estate to care for their offspring, while the Government acts as trustee to manage the trust fund.

The idea was developed in 2015 when two non-government organisations approached Professor Ho and Ms Lee about setting up a private trust. The scholars’ research convinced them that it was better to let the government manage it to keep fees low and enable better monitoring – something that had not been attempted elsewhere (Singapore has a similar system but created an NGO supported by the government to be trustee). 

The suggestionwas submitted to the Government in an informal policy paper in October 2015 and received a quick response. In February 2016, the Government set up a working group to investigate the feasibility of an SNT and appointed Professor Ho; in October 2017, it announced it would set up an SNT with the Government acting as trustee;and in early 2018, it allocated $50 million to get the trust up and running, with a target start date of end 2018 / early 2019.

Apart from proposing the idea for the SNT, Professor Ho and Ms Lee also worked with the Concern Group of Guardianship System and Financial Affairs to provide supporting data. In 2016, they surveyed 2,500 parents and caregivers of individuals with cognitive impairment on their interest and wishes in an SNT. Among the findings was that more than 90 per cent had not executed a will or set up an enduring power of attorney for their dependents, and only five per cent could afford to set up a private trust.

“SNT is the result of a tripartite partnership between the special needs community, the University and the Government – all three groups came together,” Ms Lee said.

Professor Ho noted that up to now, other governments had been reluctant to make the same commitment. “This is one thing we feel really proud about – we helped to convince the Hong Kong Government to do this and they listened,” she said. On the back of that success, Korea and Taiwan recently invited them to explain the workings of the SNT and guardianship to government officials, NGOs and academics.

Ms Rebecca Wing Chi Leeand Professor Lusina Kam Shuen Ho of the Department of Law received the Faculty Knowledge Exchange Award 2018 of the Faculty of Law for the project ‘Introducing the Special Needs Trust to Hong Kong’.