Division of inheritance in Korea
This time we will talk more about the division of inherited property — division of inheritance in Korea — according to the Korean inheritance law.
In our example from the previous article, Mike had left an inheritance in the amount of USD 700,000 before passing away. The immediate family members who might be potential heirs included his mother Jessie, spouse Rose, and children Hope and Wish.
As explained in the same article, Rose, Hope, and Wish are all in the first order of inheritance, and their shares would be a respective USD 300,000, USD 200,000 and USD 200,000.
If the inherited estate was worth USD 700,000 in cash, the heirs would receive their respective shares as described above and that would end the matter.
However, what if the inherited property is an apartment? How are the inheritors going to get their shares in practice?
As for division of inheritance in Korea, this is how is spelled out by Korean Civil Law:
Article 1012 (Determination of Method Division or Forbidding Division by Will)
An inheritee may by will determine the method of division of the inherited property, entrust a third person with such determination, or forbid division for a period not exceeding five years from the time of the commencement of the inheritance.
Article 1013 (Division by Agreement) (1) Except as mentioned in Article 1012, co-inheritors may, at any time, effect the division of the inherited property by their agreement.
(2) The provisions of Article 269 shall apply mutatis mutandis to the division of the inherited property mentioned in paragraph (1).
Article 269 (Methods of Partition) (1) If, with regard to the methods of partition, no agreement can be reached among the co-owners, any co-owner may file an application for partition with a court.
(2) If partition of the property itself cannot be effected, or if there is an apprehension that the property may considerably depreciate in value as a result of partition, the court may order a sale thereof by official auction.
Article 1015 (Retroactive Effect of Division)
Division of an inherited property shall be effective retroactively from the time of the commencement of the inheritance: Provided, That the rights of third persons shall not be prejudiced thereby.
Following the provisions above, we can conclude that either Mike could establish the way of property division in a will, entrust a third party with this task or even prohibit the division of property for up to 5 years.
In the case Mike dies without leaving a will that would provide for a way to divide his property, the inheritors can of course make an agreement as set out in Article 1013 above, regarding the division of property. In our example, Hope and Wish can transfer their shares to their mother, Rose, so that she can unilaterally receive all inherited property.
But what should we do if an agreement between the heirs could not be reached or one of the heirs failed to carry out the conditions of the agreement? Suppose that Wish agreed to transferring all rights to the inherited property to her mother, but then she changed her mind and decided not hand over her 2/7 share. In this case Rose will be able to file an application for the inherited property division in accordance with paragraph 2 of article 1013 and article 269 of the Civil Act.
Division of inherited property, as shown above, after the commencement of inheritance, i.e. after Mike’s death, affects the property rights ex post facto. It means that if, for example, Rose, Hope and Wish all decide to place the property under Rose’s name and, accordingly, conclude a property division agreement, from the legal point of view it will be considered as if Rose inherited Mike’s property at the moment of his death.
If you have any questions regarding division of inheritance in Korea, please leave your comments down below or contact our office for more information.
Next in line – acceptance, renunciation and legal reserve of inheritance. Stay tuned!
Also, If you want more information about Korean Inheritance tax Click Here.