Blog, Inheritance

For most foreigners, the Korean inheritance law will not apply, but there are a few instances where it will. This article is here to give you a brief overview of what the Korean inheritance law covers and will help you navigate the system. 

Korean Inheritance Law Overview

Below is a brief overview of everything the Korean inheritance law entails, from inheritance shares, to Korean wills, disinheritance, how to claim an inheritance and how the Korean inheritance law applies to non-Koreans. 

1. Does Korean Inheritance Law Apply To Foreigners?

In many cases, Korean inheritance law will not be applied when it comes to foreigners, as they will fall under the Act on Private International Law. 

There are some instances where the Korean Inheritance Law will be applied: 

• when a foreigner’s parents have the Korean nationality
• when a foreigner obtained the Korean nationality
• when a foreigner who owns real estate in Korea specified using one of the ‘methods of will’ that the Korean inheritance law should be applied in their inheritance (based on Article 49).

Act on Private International Law 

Article 49 (Inheritance) (1) Inheritance shall be governed by the law of nationality of the decedent at the time of death.

(2) When the decedent clearly designates, by the methods applicable to a will, one of the following laws as the applicable law, inheritance shall be governed by the law irrespective of the provision of paragraph (1):

1. 1. The law of the country where the habitual residence of the decedent is located at the time of the designation: Provided, That such designation shall be effective only if the decedent had maintained his/her habitual residence in the country until the time of his/her death;
   2. The law of the situs of real property with respect to the inheritance regarding the real property.

Foreigners do not need to fly into Korea to deal with the inheritance, it is possible to appoint a lawyer, like Seoul Law Group, who will handle your case.

2. Korean Inheritance Priority

The Korean law reserves portions of the inheritance for each qualified heir. If no will was made up, the reserved portions will be granted to the heirs in the following order. 

Civil Act

Article 1000 (Priority of Inheritance) (1) In inheritance, persons become inheritors in the following order:

1. 1. 1. Lineal descendants of the inheritee; 
      2. Lineal ascendants of the inheritee; 
      3. Brothers and sisters of the inheritee; 
      4. Collateral blood relatives within the fourth degree of the inheritee.

“Lineal descendants” means children, grandchildren, great-grandchildren, etc. “Lineal ascendants” means parents, grandparents, great-grandparents, etc.

It should be noted that unborn foetus usually do not have legal rights because they are not “human” yet, but law makes an exception for them when it comes to inheritance. Unborn child still counts as “lineal descendant,” and they are treated as if they are already born.

In case there are multiple people in the same rank, the priority goes to the one with the closest relationship. If there are multiple people in the same rank, and the same degree of relationship, then they become co-inheritors and receive equal shares of the inheritance. 

Civil Act

Article 1009 (Statutory Share in Inheritance)
(1) If there exist two or more inheritors in the same rank, their shares of the inheritance shall be equally divided. 

Not only the assets will be divided among the heirs, but also the debts. All of the heirs will inherit the debts based on Article 1000 and Article 1009 as well. 

Example 1: The deceased left three children. The shares of the inheritance will be 1/3 for each of the children. (It doesn’t matter if one of them are not yet born.)

Example 2: The deceased left two children, and an old parent in a nursing home. The shares of the inheritance will be 1/2 for each of the children. The old parent would get nothing, because lineal descendant (= child) is in the higher rank than lineal ascendant (= parent).

Example 3: The deceased left no children, but two parents and a sibling. The shares of the inheritance will be 1/2 for each parent. The sibling would get nothing, because parent is in the higher rank than a sibling.

Example 4: The deceased left two siblings. The shares of the inheritance will be 1/2 for each for each sibling.

3. Surviving Spouse’s Inheritance Right

Article 1003 (Order of Inheritance of Spouse)
(1) If there exist such inheritors as provided in Article 1000 (1) 1 and 2, the spouse of the inheritee becomes a co-inheritor, in the same order as the said inheritor. If there exists no inheritor, the spouse becomes the sole inheritor.

The spouse becomes co-inheritor with any inheritors in the first and second rank. If there aren’t any inheritors in the first and second rank (which means the deceased didn’t left any children or parents) then the spouse becomes the sole inheritor of the deceased. 

Civil Act
Article 1009 (Statutory Share in Inheritance)
(2) The share inherited by an inheritee’s surviving spouse shall be increased by 50 percent over the inherited share of the inheritee’s lineal descendant where the spouse inherits jointly with such descendants, or 50 percent over the inherited share of the inheritee’s lineal ascendant where the spouse inherits jointly with such ascendants.

Also, when the spouse become a co-inheritor, they get 50% more share than those of the other inheritors. The Korean law is protective of the spouse who is left behind.

Example 1: The deceased left a spouse and one child. The shares of the inheritance will be 2/3 for the spouse and 1/3 for the child, because the spouse should get 50% more share than their co-inheritor.

Example 2: The deceased left a spouse, two children and one parent. Only the spouse and children will become inheritors, and the parent won’t receive anything. The shares of the inheritance will be as follows: 2/7 for each child and 3/7 for the spouse.

Example 3: The deceased left a spouse and two siblings. The spouse would become a sole inheritor and get everything. Two siblings would get nothing, because they are not in the first nor second rank according to the Article 1000. (Siblings are on the third rank.)

4. Inheritance by Representation

We looked over the basic of share of inheritance, but it becomes complicated when a child predeceases their parent, but still left a spouse or a grandchild behind.

Let’s say there is a Person A, and his only child Person B. Person B got his own spouse and had a baby. Usually, Person B would outlive Person A, and inherit the whole property of Person A. In the end Person B, their spouse, and their baby would live happily ever after with Person A’s property.

But let’s say Person B met an untimely death from a terrible accident. Now that Person B doesn’t exist anymore, Person A doesn’t have any child, which means Person A’s sibling or cousin would inherit the property. This would be very unfair for Person B’s spouse and baby. If only Person B lived, his spouse and baby wouldn’t have any financial problem because their Person B would’ve inherited Person A’s property. But since Person B died, his spouse and baby would suffer without it.

So, the Korean law “passes on” the inheritance if a child dies before their parents. In this case, Person B’s right to the inheritance will be passed down to his spouse and baby. This is called “Inheritance by Representation.”

It should be noted that when the spouse remarries, inheritance passed down from the deceased spouse can’t be claimed. In this case, if Person B’s spouse got remarried after they got widowed, they can’t claim the inheritance of Person A’s property. So the baby would be the sole inheritor of Person A.

Let’s see another example. Person A has three children: Person B, Person C, and Person D. If these three children all outlive Person A, the share of inheritance will be 1/3 for each of them. But what if Person B died earlier than Person A? If Person B didn’t have any spouse or children of their own, then Person A’s property would be divided into 1/2 for Person C and Person D. But if Person B had two children, then the share of the inheritance would be like this: 1/3 for Person C, 1/3 for Person D, and 1/6 for each of Person B’s children.

5. Infringement and Recovery of Inheritance Right 

Upon the death of the deceased, the ownership of the estate is automatically transferred to the heirs. Therefore this does not require any further legal actions. If there are multiple heirs, they would share the ownership of the estate.

But still, it is possible that inheritance rights be infringed when an heir takes a bigger portion than what they are entitled to or if a person who doesn’t have inheritance right takes ownership over the estate. 

In case of inheritance right infringement, the lawful heirs can file a lawsuit, but this needs to be filed within 3 years from when the infringement was found out or within 10 years of the infringement happening. 

Civil Act
Article 999 (Claim for Recovery of Inheritance)  
(1) If the right of inheritance is infringed by a person who pretends to have the right of inheritance, the person who has the right of inheritance or his/her legal representative may bring an action for recovery of inheritance.
(2) The claim for recovery of inheritance under paragraph (1) shall lapse at the expiration of three years from the date he comes to know the infringement, or ten years from the date the right of inheritance is infringed.

The court will analyse the claim and when this is accepted, they will order the infringer to return the property to the lawful heirs. 

6. The Size of Inheritance Share

Even though each heir will receive a share of the inheritance, the calculations of the share size is not a straightforward process. Especially in the case when one of the heirs has received a big gift from the deceased or when one family member has supported the deceased financially or physically during their lifetime. 

There are two types of mechanisms to prevent unfairness towards the heirs. 

Contributory Portion

Contributory portion is granted when any of the heirs had provided the deceased with any special care (financially or physically) during their lifetime. Let’s say the deceased has three children. But only one child financially supported their parent in their old age, visited them often with gifts, or paid for parent’s medical fee so that the parent didn’t have to pay for it, that child have a right to receive more inheritance than other two children.

The Korean law leaves it up to the heirs to agree on who shall have a contributory share and how much this would be. If the heirs are unable to come to an agreement, the Korean court will be making the decision. 

Special benefit

In case one of the heirs has received a significant gift from the deceased before their death, the Korean law will consider this as being a prepayment of the inheritance, which means their inheritance would become smaller than other heirs. Let’s say the deceased has three children again. But the deceased only sent one child to the expensive university, or gave that child a large amount of money to get married or start a business, that child should get a less inheritance than other two children.

Again, all the heirs have to come to an agreement and if this agreement can’t be reached, the Korean court will be making the decision. 

6. Korean Will

All of the above occurs only when the deceased didn’t leave any will. So, to avoid complicated legal dispute after your death, it is recommended to make a will. According to the Korean Law, there are five ways to make a will: holograph document, sound recording, notarial and secret documents, and instrument of dictation.

• Will by Holograph Document: The testator must write with their own handwriting the whole text, the date, the domicile and their full name, and must affix their seal thereto.
• Will by Sound Recording: The testator must orally state the tenor of their will, their full name and the date, and the witness must orally state that the will made by the testator is due and correct and also state their full name.
• Will by Notarial Document: The testator must orally state the tenor of their will before a notary, in the presence of two witnesses and the notary must write down and read it, and then the testator and each of the witness must affix their signature or names, and seals to the writing after acknowledging it to be due and correct.
• Will by Secret Document: The testator must close up the document on which the writer’s full name was written and affix their seal thereto, and after the testator has produced the sealed document before at least two witnesses and declares that it is their testamentary document, the date of the production of the document must be written on the sealed cover, and then the testator and the witnesses must affix their signatures or names and seals thereto.
• Will by Instrument of Dictation: This method is only used when a will is not able to be made in compliance with the forms mentioned in the preceding four Articles due to disease or any other cause imminent. The testator must orally declare the tenor of their will to one of the witnesses in the presence of at least two witnesses, and the person to whom the oral declaration is made must write it down and read it, and the testator and each witness, after their having acknowledged the writing to be due and correct, must affix their signature and seal thereto.

If no will has been prepared, the rule of intestate succession will be used to divide the inheritance. When a will is present, a person who normally wouldn’t be categorized as an inheritor by law can also become a beneficiary. Even though a will is present, this doesn’t mean that certain lawful heirs can be excluded from receiving their lawful share. 

7. Disinherit a Family Member

Currently, the Korean inheritance law does not allow a will to completely overrule the Korean law. Lawful inheritors will always be able to receive the minimum statutory share, this law was created to protect inheritors from being disinherited or left with a very small portion of the inheritance. The elective share is equal to 50% of the intestate succession share.

Civil Act
Article 1112 (Persons with Right to Legal Reserve of Inheritance and Legal Reserve of Inheritance)
Legal reserve of inheritance for an inheritor shall be calculated according to the following subparagraphs:
1. For lineal descendants of an inheritee, one half of the inheritance stipulated by law;
2. For the spouse of an inheritee, one half of the inheritance stipulated by law;
3. For lineal ascendants of an inheritee, one third of the inheritance stipulated by law;
4. For brothers and sisters of an inheritee, one third of the inheritance stipulated by law.

 

However, there are five situations when the legal heir gets actually disinherited by the law. In these situations, the heir loses their inheritance right, and the right passes on to the next heir.

• A person who has intentionally killed or attempted to kill their lineal ascendant, the inheritee, their spouse, or any person who has priority or is in the same order of inheritance.
• A person who has intentionally assaulted their lineal ascendant, the inheritee, or their spouse, and caused their death.
• A person who interferes by fraud or duress with a will or withdrawal of a will on inheritance of the inheritee.
• A person who, by fraud or duress, has the inheritee make a will on their inheritance.
• A person who forges, alters, destroys, or conceals a will on inheritance of the inheritee.

8. Renounce Inheritance

In case you don’t want to receive the inheritance that if left for you, a renunciation of inheritance must be filed with the Korean court within 3 months from the date the heir found out about the passing of the deceased. 

In case the debts of the inheritance are bigger than the assets, a reserved renunciation can be filed within 3 months of when the heir found out about this fact. A reserved renunciation means that the heir only inherits the debts to the extent that the inherited assets can pay off. 

Korean Inheritance Lawyer

All of the information mentioned in this article are the basics of the Korean inheritance law. It is highly recommended to hire a Korean inheritance lawyer to help deal with the inheritance, and especially as a foreigner. Get in contact with Seoul Law Group, as we are experienced in handling Korean inheritance cases between Koreans, Korean families living abroad and when foreigners are involved.

A common mistake made by foreigners who are involved in an inheritance dispute is that they contact a Korean law firm too late into the process. This can have a negative effect on the outcome of the law case. When it comes to legal cases, it is highly recommended to involve a lawyer as soon as possible. 

Korean Inheritance Tax

Anyone receiving any kind of inheritance within 10 years of the benefactor’s death is required to pay inheritance taxes. The tax rate is based on the market value of the estate, minus deductions like debts left by the deceased and public imposts. Any property gifted shortly before death, will also be included in taxable inheritance. 

The rates for taxes are based on progressive rates between 10 and 50%: 

TAX BASE, KRW	TAX RATE
Up to 100 million	10%
100 million – 500 million	20% on band over 100 million
500 million – 1 billion	30% on band over 500 million
1 billion – 3 billion	40% on band over 1 billion
Over 3 billion	50% on band over 3 billion

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