In Japan, there is a three-month period of time (called a deliberation period) during which the legal heir may accept or disclaim the inheritance (The Japanese civil code, Article 915). The deliberation period starts from the time when the legal heir recognises the deceased person’s death and that they are their legal heir. It does not automatically start from the date of the deceased person’s death. This period can be extended by the family court on the application of the legal heir, an interested party or a public prosecutor.
An inheritance windfall isn’t always welcome, and it is often the case that all you get is a debt after all. The Japanese civil code (Article 882) applies what is called “The doctrine of universal succession”, that the heir(s) succeed to all the rights and liabilities relating to the property a deceased person at the time of death. The heir(s) inherit the deceased person’s entire estate and debts, including any tax arrears, as well as assets. In the case where the debts of an estate exceeds its assets, it is better to consider disclaiming any inheritance. When the heir disclaims their inheritance, they are no longer obliged to pay the deceased person’s tax arrears.
Application for a disclaimer of inheritance is made to the family court in Japan. When the process at the family court is completed, the legal heir is no longer the deceased person’s heir and does not owe any debts. However, they will not be able to inherit any right, such as real property or financial assets. After the completion of the process, the family court will issue a “Certificate of Acceptance of the Application for Renunciation of Inheritance,” and in practice, a copy of the certificate is sent to creditors, such as a bank and a credit company.
It’s important to note that if you discover that the deceased person has money in the bank and you withdraw it and spend it, you might not be able to disclaim the inheritance afterwards as this could allow you to evade repaying this debt. However, if you use the money for the deceased person’s funeral expenses of or any other reasonable necessity in a common sense amount, you can still disclaim the inheritance at a later date. It is generally recommended that you keep as little money as possible and avoid using it.
The effect of an inheritance disclaimer is that the person who disclaims the inheritance shall be deemed not to have been an heir to it from the date of succession. If the sole or all statutory heirs of the first rank, the spouse or children of the deceased, disclaim their inheritance, then, the deceased is legally treated as if they had neither spouse nor children, and under Japanese civil code, the parents of the deceased, in turn, become the heirs. The parents, of course, don’t want to owe the debt, so they also go through the process of disclaimer of inheritance. Then there will be no parents, so under Japanese civil code, the siblings of the deceased person will be the heirs. The siblings don’t want to owe the debt, of course, so they also go through the process of disclaiming it.
In other cases, where (for example) the statutory heirs do not a wish not to break up a family business, and agree that the eldest son should be the only heir, the other statutory heirs would each make a disclaimer.
The issues mentioned above might make you worry if everyone needs to disclaim their inheritance within three months of knowing of the deceased person’s death, but don’t worry. For parents, the three months period of the disinherit counts after the child or children’s disclaimer is made. Likewise, the three months period for siblings only starts after the parent’s disclaimer is completed and they know that the parent has disclaimed their inheritance.
I provide support for the disclaimer process to the Japanese family court from abroad.
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