Q) I have a question about whether to renounce inheritance in Korea. My mother passed away a few months ago. There was no will. She was a Korean citizen and her husband too. All two children live in the U.S. and they are U.S. citizens. As we understand I have inherited a 2/7 share of my mother’s condominium and some cash in Korea. My stepfather and his Korean lawyer seem to up to no good. They both have sent conflicting and in my opinion false information to me. Especially his lawyer is threatening me that I would not able to sell my share so I had no choice but to give up or transfer my share. The stepfather asked me to sign POA and a Renunciation of Inheritance but I refused. They even said as I am not a Korean citizen, it would be much better renouncing inheritance for the sake of estate distribution. He said he will compensate me for my renounced share. Can you give me any advice?
No Further Action Is Required to Become a Beneficiary of the Estate
A) As your deceased mother was a Korean, the Korean inheritance law shall be the governing law in Korea. Please click here for a general overview of the Korean inheritance law.
By the operation of the Korean inheritance law, you and other heirs had already become the beneficiaries of the estate. This happened immediately when your mother passed away. Currently, you are the co-owners with other heirs of the condominium and the bank assets of the deceased. No further action like a report or a court ruling is required for this.
Some might wonder if you would have a hard time in selling your share or even would risk of losing your proportion due to other co-heir’s unexpected behavior. But, that is not true. I will explain why.
How to Distribute the Estate in South Korea
The estate has come into the co-ownership status among the heirs upon the deceased’s passing. Many heirs in Korea choose to maintain this co-ownership. For example, when the estate is comprised of a real property, the heirs keep the property under their mutual names.
In the co-ownership status, the heirs can sell the house by mutual agreement and distribute the proceeds according to their shares at any time. There is no such a thing like that (i) this state of ownership is regarded as a limited ownership or (ii) the real property market does not like a co-owned property.
When the agreement among the heirs fail to reach, any heir can ask the court to sell the house and distribute the proceeds. This sort of petition is very common in Korea.
When to Renounce Inheritance in Korea
Of course, as the other counsel proposes, you may give up your inheritance share and enter into an agreement with the stepfather so that he can pay your share when he finally sells the house. But, you cannot be sure of when he will sell the house and at what price, and when you will be paid. Also if he refuses to sell the house, and even refuses to pay you, what shall you do? You will probably need to file a suit against him at the Korean court. But, that is not a good situation for someone like you who lives in the U.S. Also there is a matter of trust issue between you and the stepfather.
That being said, giving up your share per stepfather’s proposal seems to have no merit here. Practically, when you may need to consider to disclaim inheritance is when the estate is comprised of more debts than exceeds assets.
How to Renounce Inheritance in Korea
Just for informational purposes, here is how to disclaim an inheritance under Korean law.
Any heir can renounce inheritance in Korea by filing a report with the Korean Family Court.
Please note that this report must be filed within 3 months from the date when the heir becomes aware of the deceased’s passing. If the heir didn’t file a report within this 3 months, he cannot renounce the inheritance.
There is one exception to this 3-month rule. That is when the heir, without gross negligence, didn’t find within this 3 months that the inherited debts exceed the inherited assets. In such a situation, the heir can file a declaration of reserved inheritance within 3 months from the date when he becomes aware of the fact that the estate is comprised of more debts than assets. When this report is duly filed, the heir’s liability is limited to the assets of the estate. Thus the heirs will not be liable to pay off the decedent’s debts with his own assets.
You can find more articles and court cases on the Korean inheritance law and practice by clicking here.
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