(Last update on November 1, 2022) Under the Korean inheritance law, the inheritance comes to fruition immediately when a person is deceased. The Korean inheritance law, the Part V of the Civil Act, provides who shall become the inheritor and beneficiary of the property of a deceased person, i.e. estate.
The inheritor and beneficiary, however, shall not always take everything from the estate. There are separate rules and restrictions on the distribution of the estate in South Korea.
In this article, we will explain to you the basic rules and practices of inheritance in Korea.
- 1 When Does the Korean Inheritance Law Apply
- 2 Who Shall Become the Heirs and How to Distribute the Estate under the Korean Inheritance Law
- 3 Surviving Spouse’s Inheritance Right and Share
- 4 When a Parent or a Spouse Dies Before the Deceased
- 5 Calculation of Actual Share
- 6 Deceased Cannot Disinherit an Heir Entirely – Elective Share
- 7 How to Secure and Collect Your Inheritance Claim in Korea
- 8 Transparency and Knowledge Are Essential in Dealing with Korean Heirs
- 9 FAQ
When Does the Korean Inheritance Law Apply
Before we dive into the Korean inheritance law, let’s find out in what situation the Korean inheritance law becomes the governing law in an international inheritance case.
Every jurisdiction has its own choice of law rules. Korea has it on the Act on Private International Law. According to the act, unless the deceased duly designated another country’s law by her valid will, the law of the deceased’s country becomes the governing law.
Also, it should be noted that the act recognizes renvoi. Renvoi is a subset of choice of law rules and its concept is prescribed in the Article 9 of the act as follows:
Article 9 (Renvoi in Case of Designation of Applicable Law) In case a foreign law is designated as an applicable law under this Act, when the law of South Korea shall be applied under the law of that foreign country, the law of South Korea (except the provisions of the law to designate the applicable law) shall govern.
In short, in intestate succession, when the deceased is not a Korean citizen, we should look to the choice of law rules of that foreign country. And if that country’s choice of law rules refers back to the law of Korea, the Korean inheritance law eventually becomes the governing law.
This is particularly relevant with regard to some countries whose choice or law rules deal with the estate differently according to whether it is an immovable property or movable property.
For example, in the United States, except as may be provided by law, the law of the deceased’s domicile applies to the inheritance of a movable (e.g. personal property). And the law of where the property is situated applies to the inheritance of an immovable (e.g. real estate).
Thus, when an American whose home state is New York dies in Korea without a will, the Korean court shall apply the Korean inheritance law with respect to his Korean bank accounts. And for the succession of a building in New York, the Korean court shall apply the New York intestate succession law.
Who Shall Become the Heirs and How to Distribute the Estate under the Korean Inheritance Law
The basic rule of the Korean inheritance law is that the property of the deceased is distributed according to his or her will. So, a person who is not categorized as an inheritor by law can become a beneficiary of the estate by the decedent’s will.
What if there is no valid will? The Korean inheritance law sets forth the rule of intestate succession. This rule of intestate succession names the beneficiary and the shares of each beneficiary for a distribution purpose.
According to the intestate succession rule, persons become beneficiaries in the following order.
- Direct descendants (children or grandchildren)
- Direct ascendants (parents or grandparents)
- Relative within the 4th degree of collateral consanguinity
If there are multiple persons standing in the same rank, the closest in the degree of relationship shall have the priority. There could be multiple persons of the same rank and the same degree of relationship. In such a case, they become co-inheritors and co-beneficiaries. The shares of the co-beneficiaries are all equal.
If the child is adopted, it establishes a parental relationship and the child can inherit the adoptive parent. Can the adopted child inherit the birth parent? Please refer to our previous article on the inheritance right of the adopted child.
The spouse has a unique position. If there are no relatives in the first and second rank, the spouse shall become the sole inheritor. If there is any inheritor(s) in the first or second rank, the spouse shall become the co-inheritor with that inheritor(s).
As to the share, Korean law provides more protection to the spouse. According to the Korean intestate succession rule, the spouse shall have 50% more share than those of other co-heirs.
For example, let’s assume a deceased was survive by a spouse, 2 children, and the parents. The 2 children and the spouse shall become the co-heirs. The parents can’t be an heir. The inheritance shares are 2/7 for each child and 3/7 for the spouse.
When a Parent or a Spouse Dies Before the Deceased
Korean Inheritance law acknowledges the succession per stirpes and lapse. This means, for example, that when a son dies before his parent, the son’s right to his parent’s estate as an intestate heir passes down to his son and wife.
What happens if the wife remarries after the death of the husband and before the death of the husband’s parent? As the remarriage disconnects the wife from the inheritance from his ex-husband, she cannot claim for a succession per stripes, either.
Although it is clear that the Korean inheritance law prescribes each heir’s statutory share, the actual calculation of how much each heir shall take eventually is not a simple process.
That is because there could be some situations where one heir had received a gift with a significant value from the deceased during his lifetime. Also, one family member could have supported the deceased financially and/or physically.
In such a situation, distributing the estate only by the statutory share could be unfair. Here, the Korean inheritance law provides 2 legal mechanisms to mitigate the unfairness.
If any heir had provided a deceased with a special contribution in taking care of the deceased or in maintaining/increasing the value of the estate, she can take some portion out of the estate over other heirs. We call it a special contribution share.
Basically, the Korean inheritance law leaves it to the heirs’ agreement to decide who shall have a special contributory share and how much. If such an agreement is unable to reach, the court will make a decision per the heir’s request.
Previously we wrote an article on this special contribution share. If you’re interested, please check on this article.
If an heir had received any assets/money from the deceased as a gift when the deceased was alive, we call it a “special benefit”. The Korean inheritance law treats the special benefit as a prepayment of inheritance share. Thus, the court deducts the value of the special benefit from the heir’s inheritance share when calculating how much the heir can get from the estate.
It is very common in Korea that an heir receives a wide range of support from their old parents. Sometimes it could be cash, sometimes lands. It is the job of you and your lawyer to find out how much the Korean heir received the benefits.
As mentioned earlier, the rule of intestate succession only applies when there is no valid will. Does this mean the deceased can dispose of the estate freely by his own will?
The answer is not always. The Korean inheritance law recognizes an elective share, i.e. a statutory minimum share to the estate which is obliged to go to an inheritor. This is intended to protect the inheritor from being disinherited or left only a small portion of the estate.
Thanks to this rule, an inheritor may elect to receive the minimum statutory share despite what the deceased had written on the will. The decedent’s freedom to make a will is restricted by this elective share.
Currently, the elective share under Korean inheritance law is 50% of the intestate succession share that an inheritor would have received under the intestacy law.
So, in the above example, let’s further assume that the deceased had left a will that named his spouse as the sole beneficiary. Even in such a situation, the 2 children can still claim the elective share. The elective shares are 1/7 for each child.
How to Secure and Collect Your Inheritance Claim in Korea
Dividing the Estate among the Heirs
Under Korean inheritance law, the ownership of an estate is automatically transferred to the heir(s) upon the death of the deceased. When there are multiple heirs, the heirs come into a co-ownership status. This is done by the operation of law. Therefore, it does not require any further legal steps such as title registration.
Each heir can get out of a co-ownership and take a particular portion of the estate by his or her own property by making an agreement with other heirs or applying for a court order.
Filing a Suit When the Inheritance Right Was Infringed
If a non-heir holds an ownership of the estate or an heir took more portion of the estate than what is granted according to this legitimate share, it constitutes an infringement of inheritance right.
Common cases of inheritance infringement are as follows:
- the deceased left a wife and child, but his brother took ownership of the estate. (The estate should be awarded to the wife and child)
- the deceased left two children, but the elder brother took everything. (the elder brother is entitled to only 50% of the estate)
In this situation, the heir whose inheritance right is infringed can correct the infringement by filing a lawsuit. One this to note is that this kind of legal action must be filed within either (i) 3 years from the date when he found out the infringement or (ii) 10 years from the date when the infringement took place, whichever comes first.
When the claim is accepted, the court orders the infringer to return the property to the legitimate heir.
When the defendant refuses to perform his judgment liability, the general process of debt collection can be applicable.
Transparency and Knowledge Are Essential in Dealing with Korean Heirs
Most of the inheritance disputes in Korea center on contesting the will and enforcing the elective share. (There are other issues such as a contributory share and a deductible special benefit. We will explain these important issues later with other posts)
We have seen many cases where the Korean heirs urge a non-Korean heir to hand over a certain legal document. They say that they need the document urgently in order to take care of the distribution and tax report. The problem is that they often do not fully disclose the situation of the estate and the foreign heir’s rights. They even provide false information about Korean law and practice. This could harm the transparency of the whole process of distribution. This also could cause a considerable financial loss to the foreign heir who is lack sufficient and reliable information on the Korean inheritance law.
Inheritance law is a complicated area of law in South Korea. Thus, It is a good idea to seek legal advice from a Korean inheritance lawyer before handing over any legal document.
A) Under current Korean inheritance law, a will cannot 100% supersede the inheritance law. There is an elective share, which is the minimum share that the intestate heirs can get regardless of what is written on the will. Therefore, if you want to disinherit someone, the only possible solution in Korea is to create a living trust.
A) The distribution of the estate requires an agreement of the entire heirs. So in order to distribute any property of the estate, you will have to file a petition with the Korean court. The Korean court can search and locate the missing/estranged heir. If the court cannot locate the heir, the party can ask the court to appoint an administrator who can act on behalf of the missing heir.
A) Yes, as a legitimate heir, you can file an estate search inquiry with the Korean government.
A) Debts are unique under Korean law. The deceased’s debts are not the subject of free distribution among the heirs. Each heir inherits the debts per his/her intestate share immediately upon the death of the deceased. The heirs may agree on how to distribute the inherited debts but they need to get approval from the creditor.
A) Your Korean inheritance tax liability is determined by the residency of the deceased and the location of the inherited property. If the deceased is a foreign resident, you will have to pay inheritance tax only for the property located in Korea. If the deceased is a Korean resident, the heir has to pay the tax for the worldwide assets of the deceased.
Q) Is there any deadline to file the Korean inheritance taxes?
A) The Korean inheritance tax report shall be filed within 6 months of the passing. There are two exceptions, though. One is when the deceased was a foreign resident and the other is when all the inheritors are foreign residents. When you qualify for this, you are required to file the Korean inheritance tax within 9 months. The penalty for non-reporting is more severe than the penalty for non-paying. So it is advised to make the Korean inheritance tax report on time.
A) No, that is not true. It is possible to handle the inheritance matters while staying in the U.S. If you retain a Korean inheritance attorney, he will be able to take care of the process. Actually, we have successfully represented many U.S. clients.
A) If you don’t want to inherit, you must file a renunciation of inheritance with the Korean court in a timely manner. Under Korean law, the renunciation should be filed within 3 months from the date when the heir knew the passing of the deceased. There is one exception to this timeframe. If the heir, without any gross negligence, couldn’t find the fact the inherited debts exceed the inherited asset, she can file a reserved renunciation within 3 months from the date on which she found such a fact. A reserved renunciation means the heir inherits the debts only to the extent that the inherited assets can pay off.
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Because of the generality of this update, the information provided herein, which may or may not reflect the most current legal development, may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.