Each country has its own law and procedures concerning an inheritance. Japan is no different. In this article, we will explain the basic concepts and procedures of Japanese inheritance law.
Which Country’s Law Shall Apply When the Deceased Left Assets in Japan?
When someone passes away and left a property in Japan, the first thing to decide is which country’s law shall become the governing law. In case the deceased and the heirs are all Japanese citizens, there is no doubt that the Japanese law shall govern the issues involved in inheritance. If, however, the deceased or any heir has foreign citizenship, the situation changes. We should first decide which country’s law shall apply.
In this regard, Japan has its choice of law rules in place, which is the Act on General Rules for Application of Laws(“Act”). Article 36 of The Act provides that Inheritance shall be governed by the law of the deceased’s home country. Therefore, when a person who was born and lived in California and then moved to Japan dies in Japan, his estate in Japan shall be distributed according to the law of California.
There is one important exception to this. Every country has its own choice of law rule. Thus, the Act provides that if the deceased’s country’s choice of law designates the Japanese law as the governing law, the Japanese inheritance law shall be applicable (Article 41 of the Act). This is called a renvoi. For example, many states in the U.S. accept the choice of law rule that the inheritance of real property is governed by the law of where the real property is located. So, when an American dies in Japane leaving a house in Japan, regardless of Article 36 of the Act, the law of Japan shall be applicable in distributing the house.
Who Shall Become The Heirs under Japanese Inheritance Law?
The deceased can decide by a will who shall inherit the estate and how, although there is some statutory limitation to this, which will explain later in this article.
When the deceased dies without a will, the intestate heir is determined by the following order.
・Children
・Direct ascendants (parents or grandparents)
・Sibling
The surviving spouse shall always become the heir in any case.
Succession Per Stirpes under Japanese Inheritance Law
If a child or a sibling who is designated as heir by the intestate succession precedes the deceased in death, the surviving child of that child or sibling shall become the heir.
Shares of Each Heir Under Japanese Inheritance Law
If there are multiple heirs, the deceased can determine by his will how much each heir shall inherit the estate.
If there is no will concerning the share of the heirs, the estate is distributed by the following statutory intestate share.
・When the spouse and child are the co-heirs, 1/2 for the spouse and 1/2 for the child.
・When the spouse and the direct ascendant are the co-heirs, 2/3 for the spouse and 1/3 for the ascendant.
・When the spouse and the sibling are the co-heirs, 3/4 for the spouse and 1/4 for the sibling.
Where multiple persons are in the same rank, their shares are equal.
Elective Share under Japanese Inheritance Law
As we explained above, the deceased can freely dispose of the estate by a will. He can give more portion of the estate to his son or even to 3rd party who is not an heir. However, there is a statutory limitation to this freedom. The Japanese inheritance law acknowledges an elective share.
Elective share means a minimum share that should be given to the intestate heir regardless of how the will sets forth the distribution of the state.
Under current Japanese law, elective share differs depending on the status of each heir
・Direct ascendants (parents or grandparents): 1/3
・Other: 1/2
For example, even if a father died leaving a will which says entire assets shall be gifted to his friend, and he left a wife and 3 children, the wife is entitled to 1/4(1/2 X 1/2) of the estate and each child is entitled to 1/12(1/2 X 1/3 X 1/2).
One thing to note is that the elective share doesn’t mean the heir gets the actual portion of the estate. It only enables the heir to get compensated by the money equivalent to the value of her elective share. For example, the estate is comprised by stocks of a company which the deceased owned 100%, and the value is 100,000USD. In the same above example, the wife is entitled to 25% of estate. But, she can’t get 25% stock but only get 25,000USD. This is very important when it comes to a corporate governance and operation. The mother can’t be a shareholder of the company.
3rd Party’s Distribution Right to the Estate under Japanese Inheritance Law
The estate is distributed to the heirs or any person who is designated as the beneficiary by the deceased’s will. There, however, could be someone who is non-heir and non-beneficiary but who specially supported the decease during his life. For the protection of this kind of 3rd party, Japanese inheritance law acknowledges the right of the special contributor. For example, if someone had taken care of the deceased for a long time without any compensation or remuneration, the person can ask the heirs to pay the monetary compensation for his contribution.
Actual Distribution of Estate among the Heirs
When there are multiple heirs, the actual distribution of the estate shall take place according to the mutual agreement of the heirs.
However, there could be some disputes among the heirs on this matter. This happens quite often especially when the estate is comprised of multiple types of assets. In such a case, any heir can ask the court to determine how to distribute each asset of the estate.
How to Secure Your Inheritance Right in Japan
When someone who is not a legitimate heir took ownership or control of the estate, this constitutes an infringement of inheritance. The legitimate heir can file an action to take the ownership/control back. This kind of action must be filed within 5 years from the date of the finding of such infringement and 20 years from the date of the occurrence of the infringement, whichever comes first.
Please note that even a legitimate heir can become the defendant of this lawsuit. That is when the heir took more than his or her legitimate inheritance share.
Securing your inheritance right also means at some point you might be consider taking action to collect you monetary claim. In this regard please read our article on this matter.
Read more: Legal Measures to Collect Monetary Claim in Japan
When inheritance involves a foreign aspect, such as when an heir lives in a foreign country, it could make the process complicated and even could cause serious disputes between the Japanese heirs and foreign heirs. The foreign heirs are vulnerable position compared to the Japanese heirs in terms of the knowledge about Japanese law and practices. Sometimes the foreign heirs have no idea of how much the estate value. In such a situation, it is the best approach to find an English-speaking Japanese inheritance lawyer who can advise and represent you. On many occasions, Japanese lawyers can take care of the inheritance matters even without you visiting Japan.
Our Japanese inheritance lawyers in Tokyo and Osaka offices have been fully and competently serving foreign clients in the various case. For more information, please contact us by clicking here.
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