Legal Reserve of Inheritance in Korea
My father left all his properties to my sibling, and left nothing to me. What can I do?
The answer is that you can claim your ‘legal reserve of inheritance.’ Let’s go over what, how much is the legal reserve, and how you can have your inheritance be returned.
Table of Contents
What Is The Legal Reserve of Inheritance in Korea?
Although there is a rule for shares of inheritance in Korea, the will of the deceased is stronger. Therefore, as written above, if your father had written a will designating all his property to your sibling, then your sibling will inherit everything of the inherited property. Your legal share of inheritance should be equal to other inheritors, but since the will is stronger than the legal share of the inheritance, your share of inheritance indeed becomes zero. And this is the point where the concept of ‘legal reserve’ enters.
Legal reserve of inheritance is a statutory portion of inheritance for inheritors who have not received enough share of the inheritance. The most similar notion to “Legal Reserve” in Roman Law would be “forced share” or “legitime (legitima portio).” The legitime is a portion of an estate which a person cannot disinherit their children without sufficient legal cause. It cannot be infringed in order to give a spouse or other beneficiary a greater share of the estate. In American law, there is no legitime, but there is a system called “elective share” which is a portion of an estate which the surviving spouse can claim. It is also called a “widow’s share.”
While the “elective share” is only recognized for surviving spouses, the “legal reserve” in Korea is a much broader concept. Spouses, children, parents, and even siblings can claim their share of inheritance against the will of the inheritee by the rule of the legal reserve.
How Much Shall Be My Legal Reserve?
The calculation of the legal reserve shall be
- Basis for calculation of a legal reserve
multiplied by
- ‘Your share ratio’
Let’s discuss how much shall be the starting point of the legal reserve.
1. Basis For Calculation of a Legal Reserve
The basis for calculation of a legal reserve is determined by Article 1113 (1), and could be simplified as the following formula:
= The sum of the values of the inherited properties
+ The given properties at the commencement of inheritance
– The total amount of debts of the inheritee
Article 1113 (Calculation of Legal Reserve of Inheritance)
(1) A legal reserve of inheritance shall be calculated as the sum of the values of the inherited properties and the given properties at the commencement of inheritance minus the total amount of debts of the inheritee.
Article 1114 (Gifts to be Added to)
(1) Gifts that have been given only within the period of one year preceding the commencement date of the inheritance shall be included for the assessment pursuant to the provisions of Article 1113. Exception applies to the property given before the period of the one year preceding, if the both parties concerned recognize that the act would cause loss to a person with the right of legal reserve of inheritance.
The formula may look a little odd and different from calculations for inheritance share. The purpose of “legal reserve” is to protect the inheritors who may suffer financial troubles because of the unbalanced will of the deceased. For that purpose, Article 1113 (1) and Article 1114 have protection each.
According to Article 1113 (1), the debt of the inheritee shall be deducted by the sum of the inheritance property. As debts are divided equally among the inheritors, the debts must be excluded from the calculation of legal reserve to protect the unfavored inheritor.
Secondly, to avoid detouring the regulations in the form of gifts, Article 1114 defines the gifts to be added to the sum of the inheritance property. Gifts that have been given only within the period of one year preceding the commencement date of the inheritance shall be included in the assessment pursuant to the provisions of Article 1113. By this protection, the inheritor cannot use an expedient of giving properties to the favored inheritors.
2. Your Share Ratio
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.
The portion of the legal reserve may differ depending on the relationship between you and the deceased. As written in Article 1112, the legal reserve is determined at a fixed ratio of the inheritance share. The inheritance share refers to the share decided by Article 1009. (Read More: Shares of Inheritance) https://seoullawgroup.com/share-inheritance-korea/
Suppose you have a spouse and child, and you passed away. The legal inheritance share ratio is 3:2(1.5:1), which means your spouse and child shall inherit 60% and 40% of your inherited property each. In addition here, a spouse and a child have the right to the legal reserve of half of the inheritance share each.
Even in the case of biased inheritance by your will, your spouse shall have the right to 30% (half of 60%) of your inherited property at least, and your child shall have 20% of your inherited property at least. The same rule shall be applied to your parents and siblings, while the ratio is one-third of the legal inheritance share.
How Can I Have My Inheritance Returned?
Article 1115 (Recovery of Legal Reserve of Inheritance)
(1) When there are shortages in the legal reserve of inheritance due to gifts or testamentary gifts made by the inheritee pursuant to the provisions of Article 1114, persons with the right to legal reserve of inheritance may recover the shortage.
Article 1117 (Extinctive Prescription)
The right to demand the return in this Chapter shall be extinguished by prescription, if it is not exercised within one year from the time when the person entitled to a legal reserve of inheritance becomes aware of the fact that the inheritance has commenced and that gifts or testamentary gifts, which are to be returned, were made. The above right shall also be extinguished by prescription if ten years have elapsed from the time of the commencement of the inheritance.
According to Article 1115 (1), if you find that your portion of inheritance is not enough because either of gifts or testamentary gifts(will), you can claim the shortage to the favored inheritors to recover the shortage.
The important point of the legal reserve is the “extinctive prescription” (= statute of limitation) is very short. Unlike other extinctive prescriptions in Korean Civil Act, the period is only ‘one year’ (While the extinctive prescription period for normal rights is 10 years) after you acknowledge shortage. This is to stabilize the legal issues regarding inheritance as soon as possible. Even in the case of you not acknowledging, the extinctive prescription period commences along with the commencement of inheritance. Therefore, it is substantially important to calculate your portion of the inheritance, compare it with the share of legal reserve, and claim the shortage to the favored inheritor.
Conclusion
In this article, we have discussed the principles of the legal reserve. Even in the case of unfair testamentary gifts or gifts, you still have at least the right for the legal reserve. However, be aware that the time limit for the claim is extremely short.
Seoul Law Group has various experiences with inheritance. If you find something unfair with your inheritance, please do not hesitate to contact us. Seoul Law Group is here to help you.