Choices about how to succeed

It was after my grandfather’s death that I first became aware of the “inheritance process”. I was already married at the time, and I had never cared about the “law” itself until then. At that time, when my family got into trouble with the division of the estate, I realised that “The law was something that costs money and time, and if I hadn’t prepared for it beforehand, the situation wouldn’t proceed as I want”. That’s why I started studying for the Shihoshoshi lawyer’s exam. Now I am working as a lawyer.

 

In the past, it was the standard practice for the eldest son to inherit the family’s estate, but today, each heir has the right for a certain portion of the estate. I would like each individual to come to understand the options for the estate succession, and they can make their own choices about how to succeed.

 

Specifically, the following options could be possible.

1. Leave it to the potential heirs after death. (This is the current mainstream.)
2. Make a gift in advance.
3. Leave a will.
4. Coming to an agreement into effect before death or by a will.
5. Using the adult guardianship system.

 

Every procedure has its pros and cons, and as long as we are alive, we have different individual feelings. It would be impossible for others to understand a person’s heart 100%, but I believe it is important for a lawyer to make an effort to understand individuals’ feelings, feel empathy to their thoughts, and achieve their plan within the framework of the law.

 

Rather than us not caring about our inheritance problems, we might be so busy in our daily lives that we don’t have time to think about the death of a parent, grandparent or our own death. However, it will definitely happen at some point in the future.

 

The judicial statistics for 2018 shows that about 76% of the cases that are brought to family courts nationwide are ones of estates under 50 million YEN (equivalent to about 360,000 UK pounds). Any conflict regarding distributing an estate is not uncommon, and all of us might encounter it.

I try to be proactive about inheritance-related procedures and succession planning as my motivation for becoming a lawyer is related to my family’s inheritance issues.

 

As part of the process, I often talk to a client about how to start their succession planning. I believe that succession planning is a “letter to the family or people who will be heirs or beneficiaries”. My advice is to encourage my clients to write it like a letter first if they don’t know how to distribute their property,

 

Documents should be finalised under the appropriate law because a succession planning is a legal process, but perfect documents cannot be prepared from the beginning, and the writing from your heart is most important. After that, leave the process to the experts. I want to follow the person’s heart as best I can.

 

I will update every Monday.
For more information

https://lawhelp4u.com/propertyJapan/
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

Purchase price by the recorded dimensions and by the determined boundary dimensions

In relation to boundaries, a buyer might expect to encounter an Important Disclosure Statement. The Important Disclosure Statement is the legal document that shows all the dimensions of the land that the buyer is buying.

The description on the Indication of Land listed on the cadastre (address, lot number, land classification and acreage) at the Legal Affairs Bureau must be accurate but accurate surveying techniques were not available in 1873-1881. Modern standards of land surveying arrived much later.

Accurate land surveying would have been expensive and the estate agent in charge may sell the buyer real property with a description of the dimensions on cadastre at the Legal Affairs Bureau.

However, the estate agent has a legal obligation to investigate the boundary, which includes to check boundary markers at the place where the real property is located, and make the boundary clear to the buyer before concluding a sales agreement.

If the fact that it is impossible to make it clear by the date is stated, the estate agent should provide the necessary advice.

In the case above, there are 2 options for the buyer.

One is that you draw a conclusion based on the price and dimensions stated on the record.

Another option is to pay the price tentatively at a time of conveyance and hold a survey at the cost of the seller or the buyer, and settle the difference in price between the areas. As the buyer, you can insist the seller should apply for the determined boundary, but the seller might decide not to sell the property.

In general, forest land and farmland are sold by the recorded dimensions as it is too large and too expensive for surveying but even residential land for sale may be sold by the recorded dimensions.

The first thing to recognise is that the transaction may contain a recorded description of the dimensions of the land.

I believe that a good lawyer should listen and give you clear information (verbal and written) to prevent the trouble from happening.

 

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

Please keep “Information for registration identification” (登記識別情報) safe.

Occasionally, people who cannot find their “Information for registration identification” are asking how they restore the document.

Information for registration identification is an important document that proves you have the ownership of the real property.
Unfortunately, it is not reissued at the Legal Affairs Bureau.

If there is a risk of theft, there is a procedure of invalidating the PIN code to let the Legal Affairs Bureau know.
However, even after invalidating the PIN code, Information for registration identification is not reissued. That is the system of Japan.

If the document are not found, strict identity verification is required when selling the real property, and the lawyer in charge of the sale will handle it to prove your identity, which normally incur an additional cost. The amount of the cost depends on the lawyer.

One of the best ways to store documents is at home in a safe or file box. If you don’t know which one is an important document, asking in person is the best thing to do.

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

Estate and Succession planning – 1-1-1. How is Inheritance Tax calculated in Japan?

The Japanese Law, tax system and inheritance system shall prevail in this blog.
When proceeding this type of scheme, the case should be dealt with a tax accountant.

I previously promised in this blog about writing the calculation for the inheritance tax in Japan. In Japan, the Inheritance tax is a tax on beneficiaries, each heirs should file the inheritance tax return individually. However, generally speaking, legal heirs ask for this task to the same tax accountant. That’s why it looks as if legal heirs file the Inheritance tax return all together at once.

Firstly, the Inheritance tax in Japan will be incurred as shown below.

STEP 1: Calculation of the taxable gross estate, including the receivable amount of life insurance.

STEP 2: Debt deduction and other fees, such as a funeral ceremony fee.

STEP 3: Basic deduction. This is statutory deduction, and if the taxable gross estate is under this deduction, heirs should not need to declare the inheritance tax return.
30,000,000 Japanese Yen + 6,000,000 Japanese Yen x The number of heirs.

STEP 4: Calculation the total amount of inheritance tax assuming that the heirs divide the deceased person’s estate in a legal portion.

¥100,000,000 – ¥48,000,000 = 52,000,000

Ex.) 1. Taxable estate amount.

	Total estate After Basic Deduction	Legal portion	Acquired amount on the law basis
Spouse	¥ 52,000,000 ×	2/4=	¥26,000,000
Child 1		1/4=	¥13, 000,000
Child 2		1/4=	¥13, 000,000

2. Tax calculation

By using the table below, the amount of tax for each legal heir is calculated.

Table for deduction amount

Acquisition amount of each legal heir (A)	Tax Rate (B)	Deduction amount (C)
¥10,000,000 and under	10%	¥0
¥30,000,000  and under	15％	¥500,000
¥50,000,000  and under	20％	¥2,000,000
¥100,000,000  and under	30％	¥7,000,000
¥200,000 ,000 and under	40％	¥17,000,000
¥300,000,000  and under	45％	¥27,000,000
¥600,000,000  and under	50％	¥42,000,000
Over ¥600,000,000	55％	¥72,000,000

 

 

	Legally acquired amount	(A)×(Ｂ)－(Ｃ)
Spouse	¥26,000,000	×15％－ ¥500,000 =	¥ 3,400,000
Child 1	¥13, 000,000	×15％－ ¥500,000 =	¥ 1,450,000
Child 2	¥13, 000,000	×15％-－ ¥500,000 =	¥ 1,450,000
		Total Inheritance Tax	¥ 6,300,000

 

STEP 5: Proportional distribution the total amount of inheritance tax by the actual inheritance amount that each heir inherits. The Inheritance tax in Japan is calculated based on the actual received amount. If each legal heir get one-third of the estate, the actual inheritance tax ratio is shown below.

	Total Inheritance tax	Actual receivable ratio
Spouse	¥ 6,300,000	×1/3 =	¥ 2,100,000
Child 1		×1/3 =	¥ 2,100,000
Child 2		×1/3 =	¥ 2,100,000
There is a Marital Deduction (Until ¥160,000,000) for the legitimate spouse in Japan. There are various types of deduction. Further consultation is needed.

The Japanese tax authority doesn’t recognise the joint account under the Common law because they always put their importance to the actual contribution to a married couple’s estate. Sometimes, this might lead to the mismatch of cross-border taxation.

 

It is so easy to make mistakes and, if there are any errors, this can cause problems after the death that will go on to create unintentional upset for the family. A good lawyer or tax accountant is likely to save money in the long term because we can deal with things quickly.

 

I hope the information is useful.

I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

Comprehensive Estate Planning

As for the current real property trend in Japan, the number of relatively large-scale real property investment projects by wealthy people in Asia has been increasing.

The aging population and the COVID-19 pandemic has affected the Japanese economy. The government should maximise savings through rapid rationalisation of the estate and the reuse of previously developed land. For example, restructuring public property stock and exploiting surplus government land and buildings contribute to economic growth.

https://www.mlit.go.jp/common/001229088.pdf

Since such cases are intricately connected to the legal issues, a project may not be possible unless the underlying Japanese legal system is understood.

I believe that it is even more important to look at the articles of the relevant laws and precedents with a fresh feeling, and keep up networking with peers and other professionals.

Even if a client is an alien, it is no different from normal work, but it is important to understand what they want to achieve because they might not fully understand the Japanese system and the roles of experts. Clients often talk on the premise of their own system, and it is necessary to explain the Japanese system plainly and clearly. The important thing is to carefully listen to what kind of business the client wants to do. Empathy is essential.

In addition, if the contents of their request is outside the scope of my work, connecting to appropriate specialists is necessary in order for a smooth business operation.

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

 

https://lawhelp4u.com/propertyJapan/

Real property in Japan and Highly-Skilled Foreign Professionals

Regarding restrictions on foreign ownership of real property vary from country to country, but Japan is a country which falls into the unregulated category.

Up to now, with respect to the purchase of real property in Japan, the number of people who purchase real property in Japan has steadily increased because of the Tokyo Olympics and the weaker yen.
Popular options are to own apartments or commercial buildings in central Tokyo,  and resort properties in Niseko, Hokkaido.

In Japan, there are no restrictions on non-Japanese purchasing real property regardless of their immigration status, such as permanent residence, nationality, or visa type. The taxation for non-Japanese has no difference from the one for Japanese.

There is no time limit on owning real property, an owner can be freely bought and sold, and can be inherited. However, importantly the inheritance tax or estate tax should be considered.

In principle, there is no visa, such as Tier 1 investor visa (UK) or EB-5 Immigrant Investor Program (US). However, if you have a rental property in Japan with stable income, there is a possibility to be granted permanent residency under the “Highly-Skilled Foreign Professionals” system.

The problem would be a language barrier, but please feel free to contact me in English when buying or selling real property in Japan.

“Highly-Skilled Foreign Professionals”
(高度人材ポイント制)

JPN

http://www.immi-moj.go.jp/newimmiact_3/

ENG

http://www.immi-moj.go.jp/newimmiact_3/en/index.html

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)
Akiko HORI

https://lawhelp4u.com/propertyJapan/

The process of buying real property in Japan

Step 1.
The intending seller appoints a real estate agent and the intending purchaser looks for a suitable property through an agent. The real estate agent can either act for both seller and buyer or just the seller.

 

Step 2.
Once the buyer finds a suitable property, they conduct their own due diligence, including whether the price is fair. The intending purchaser (or agent) sends a Letter of Intent as part of the negotiation of price. This is not legally binding.

I provide consulting services for the purchase and sales of real property in Japan.

I research the registration of both company and property on the official record basis, and report it in English. When required, I research the recent property record from the website below.

Public transaction record is available in English.
https://www.land.mlit.go.jp/webland_english/servlet/MainServlet

 

Step 3.
Once the price and any other conditions are agreed, a Real Estate Purchase and Sales Agreement and an Important Disclosure Statement for the property will be prepared by the seller. Broadly speaking, the parties are free to draw up a contract in any form they choose. The buyer should arrange to have the deposit 10% of the purchase price ready for when the contract is signed.

 

Step 4.
The buyer and seller (or authorised agents) sign the contract, which will specify a date for settlement of the balance of payment. The Important Disclosure Statement will be provided either at this time or some time before settlement.

 

Step 5.
On the Settlement date, the impartial Shihoshoshi lawyer deals with the property rights transfer and the outstanding balance of the purchase price (and any costs) is settled. The seller will also hand over various original documents related to the property. It is also possible for the buyer to appoint their own lawyer

I make sure that the transfer of real property on agreed terms is carried out correctly.

I hope the information is useful.
I will update every Monday.

For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)

https://lawhelp4u.com/propertyJapan/

The purpose of the property registration system in Japan

The purpose of the property registration system in Japan is to secure the rights to real property by providing for a registration system to be made to notify the public of real property descriptions and rights, thereby contributing to safe and smooth conduct of transactions.

 

In terms of safe and smooth property transactions, the kind of right that is established in the property is crucial, so the property registration system provides the information concerning property rights below specifying description of the property, the full name(s) of the person(s) and address(es).

1. Ownership
2. Superficies (Surface rights)
3. Farming right
4. Easement (servitude)
5. Priority privilege (Statutory lien)
6. Pledge
7 Mortgage
8. Right of lease
9. Mining right (Right of quarrying)

Registration identification is issued when a holder of a registered right files an application for real property rights, which an identification code is provided in order to confirm that said registered right holder files an application for the registration, with which the registered right holder can be identified.

You can search the property registration.

https://www1.touki.or.jp/beginner/index.html
However, the information is only written in Japanese.
I provide a professional translation services in real estate industry and legal documents.

Akiko HORI

I hope the information is useful.
I will update every Monday.
For more information
Japanese business start-up consultant
Shihoshoshi Lawyer
(Judicial Scrivener)

https://lawhelp4u.com/propertyJapan/

Tokyo Today : Population Trends in Chiyoda, Chuo and Minato

At the moment, the worldwide economy has been badly damaged by the Covid-19 pandemic. However, as long as people exists, the business never stops.

In the centre of Tokyo, there is always a lively atmosphere because there are many offices and commercial facilities and a lot of people come to work and go shopping in the city. In recent years, the number of residents has been rapidly increasing and it is becoming more active for day-to-day consumption. The graph below shows Population Trends in the three central cities of Tokyo (Chiyoda, Chuo and Minato). The graph is based on the rate of change of population from 2002 to 2019 (Each year is based on October 1st). The total population of Japan was about 126 millions in 2019, in comparison to about 127 millions in 2002, which is about 1% decrease. However the three cities of central Tokyo (Chiyoda, Chuo and Minato) have quite different circumstances. The graph shows the clear difference when comparing three cities with the percentage of Japan as a whole. The main factors are the large supply of apartments at a reasonable cost, combined with every convenience and a well-equipped urban infrastructure.

As such, now is the perfect time to change things for the future investment.

I will update every Monday.

For more information

Japanese business start-up consultant

Shihoshoshi Lawyer

Akiko HORI

http://lawhelp4u.com/propertyJapan/

Estate and Succession planning – 1-7. Making a will Part 2

3. Jurisdiction and applicable law in Succession

 

In Japan, the article 37 of the Act on General Rules for Application of Laws is applied for wills and succession. Article 37 states that the formation and effect of a will shall be governed by the national law of a testator at the time of the formation. Concerning this provision, ‘the formation and effect of a will’ means only matters concerning the transmission of wills, such as the mental capacity, defective evidence of intention, effect of a will or validity of a will. When the will comes into effect at the time of death, the contents of the will, including maintenance obligations arising by reason of death is determined by article 36 of the same law.

Under the Act on the Law Applicable to the Form of Wills, both the governing law of the will (article 37) and the inheritance (article 36) are stated to be the national law, but there is a time gap between the will at the time it was established and the inheritance. If the nationality of the person is different between the time of making the will and at the time of death, the governing law might be different. To avoid the confusion, as a practical matter, a testator can choose which law governs succession to their estate.
In addition, when acknowledging a child or putting an estate in the trust under a will, article 29 (Formation of Parent-Child Relationship with Child Born Out of Wedlock) or article 7 (Choice of Governing Law by the Parties) of the same law is applicable.

As well as the Act on General Rules for Application of Laws, there is the Act on the Law Applicable to the Form of Wills, which was created by ratifying the Convention of The Hague Conference on Private International Law in 1961.
Under the Act on the Law Applicable to the Form of Wills, a formally prepared will becomes valid as long as it complies with the law of the place where the will is established, of the country where the testator has nationality, of the place where the testator had domicile, of the place where the testator had habitual residence or the law of the place where the real property is located.

 

4. Advice

This selective listing of a large number of laws in the Act on the Law Applicable to the Form of Wills allows a statutory will as far as possible, and most wills made under the law of the place where the testator resides will become valid in most of cases. However, in practice, a will which follows the methods of Japanese law is prepared separately in many cases in order to carry out the post-death administrative procedures for Japanese estate smoothly.
It is possible for an individual to make a will for themselves, but that is not without its risks. There might be technical issues that potentially could go wrong. If there are any errors, these could cause problems after the death. I can advise on arrangements for a will, and highlight potential problems that might arise.

I hope the information is useful.

I will update every Monday.

For more information

Japanese business start-up consultant 

Shihoshoshi Lawyer

(Judicial Scrivener)

http://lawhelp4u.com/advice/

http://lawhelp4u.com/propertyJapan/