In our previous article, we talked about the legal effect of a will created in Korea by a foreigner and methods of creation recognized by the Korean law.
Today we will look into the Korean inheritance system.
I. Cases when the Korean law will apply.
Typical cases of when the Korean inheritance law will be the applicable one include cases when a foreigner’s parents still have the Korean nationality, or when a foreigner obtained the Korean nationality after having lived here for some time.
However, the Act on Private International Law has an interesting way of regulating this.
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):
- 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;
- The law of the situs of real property with respect to the inheritance regarding the real property.
According to the article quoted above, the Korean inheritance law will apply if a foreigner complied with the rules regarding the 5 ‘methods of will’ and 1) resided in Korea at the moment of choosing the Korean law as the applicable one and was still residing in this country until the time of his or her death; or 2) did not reside in Korea, but had real estate on the territory of Korea.
There are almost no foreigners who are aware of this rule. If you reside in Korea or have real estate property here and wish the Korean inheritance law to apply to your legacy, you will have to specify, through one of the 5 ‘methods of will’ that the Korean law should apply to your inheritance.
II. How the Korean law will distribute the inherited property
If the Korean law does apply, the inheritance process will be regulated as follows, provided, that there is no will in place that could dictate otherwise. In the case there is a will, the inheritance process will, of course, follow the contents of the will.
1. Inheritance priority
The Korean Civil Act regulates the inheritance order as follows.
Article 1000 (Priority of Inheritance) (1) In inheritance, persons become inheritors in the following order:
- Lineal descendants of the inheritee;
- Lineal ascendants of the inheritee;
- Brothers and sisters of the inheritee;
- Collateral blood relatives within the fourth degree of the inheritee.
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.
For example, if Mike who has Jessie as the mother, Rose as the spouse, Hope and Wish as his children and who obtained Korean nationality and passed away without leaving a will, all his property will be inherited by Hope, Wish and Rose, and Jessie will not receive anything.
2. Inheritance shares
The Korean Civil Act regulates inheritance shares as follows.
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.
(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.
Based on the example in the previous paragraph, if Mike’s inheritance is $700,000 USD, Rose will get $300,000 USD (=3/7 x 700,000), Hope and Wish will each get $200,000 USD (=2/7 x 700,000).
The information above is the basics of the Korean inheritance law, however, when dealing with a real situation, it is recommended to seek professional help. If you have any questions, you may leave your comments below or contact our office.
We will try to take a deeper look at the distribution of inheritance shares in our next article. Stay tuned!