Inheritance

The scope and priority of heirs are defined by the Civil Code.

Spouse: Always an heir (Art. 890).

Priority order: - 1st: Children (Art. 887) — Spouse 1/2, children 1/2 - 2nd: Lineal ascendants/parents (Art. 889-1-1) — Spouse 2/3, parents 1/3 - 3rd: Siblings (Art. 889-1-2) — Spouse 3/4, siblings 1/4

Representation: If a child predeceases the decedent, that child's children (grandchildren) inherit by representation (Art. 887-2). For siblings, representation is limited to one generation (nieces/nephews).

Legally reserved portion (Art. 1042): Minimum inheritance guaranteed to heirs other than siblings — one-half of the statutory share for spouses and children, one-third for lineal ascendants only. Claims must be made within 1 year of learning of the inheritance and infringement.

Japan recognizes three ordinary will formats.

Holographic will (Art. 968): The entire text must be handwritten by the testator, with date, name, and seal. Since 2019, attached property lists may be typed. The 2020 Legal Affairs Bureau storage system provides secure storage with probate waiver.

Notarized will (Art. 969): Drafted by a notary public in the presence of two witnesses. The most reliable method — eliminates risks of formal deficiency, loss, or forgery. The original is stored at the notary office. Costs vary by estate value (approximately ¥30,000-100,000+).

Secret will (Art. 970): Content remains secret while existence is certified by a notary. Rarely used in practice due to complexity and limited advantages.

When no valid will exists, all heirs must agree on how to divide the estate (Art. 907).

Agreements are documented in an Estate Division Agreement (isanbunkatsu kyougisho), signed and sealed (registered seal) by all heirs. This document is required for real estate inheritance registration.

When agreement cannot be reached, mediation at the family court is available. If mediation fails, the court decides through adjudication (shinpan), dividing assets according to statutory shares and each heir's circumstances.

Special contributions (Art. 904-2): Heirs who made special contributions to maintaining or increasing the estate (nursing care, business assistance) may claim an increased share.

Renunciation allows an heir to completely withdraw from the inheritance (Art. 938).

Deadline: Must file with the family court within 3 months of learning of the inheritance (deliberation period, Art. 915-1). The court may extend this period upon application.

Effect: The renouncing heir is treated as having never been an heir. This is absolute — both assets and liabilities are disclaimed.

Limited acceptance (Art. 922): An alternative where the heir accepts inheritance only to the extent of positive assets. Useful when asset/liability balance is unclear, but procedurally complex (requires all heirs to agree).

Caution: Consuming or disposing of inherited assets before renunciation may constitute "statutory simple acceptance" (Art. 921), precluding renunciation.

Japan's inheritance tax applies to estates exceeding the basic deduction.

Basic deduction = ¥30,000,000 + ¥6,000,000 x number of legal heirs

For example, with a spouse and two children (3 heirs), the first ¥48,000,000 is tax-free.

Tax rates: Progressive from 10% (up to ¥10M) to 55% (over ¥600M).

Key reductions: - Spouse deduction: Tax-free up to the statutory share or ¥160,000,000, whichever is greater - Small residential land reduction: Up to 80% reduction for residential land (up to 330m2) - Minor heir deduction, disabled heir deduction

Filing deadline: 10 months from the date of learning of the decedent's death. Late filing incurs additional penalties.

Life insurance proceeds: ¥5,000,000 x number of legal heirs is deductible from insurance proceeds received.

The executor (yuigon shikkousha) has the authority and duty to perform all acts necessary to carry out the will (Art. 1012).

Appointment: Either designated in the will (Art. 1006) or selected by the family court upon request by an interested party (Art. 1010). Attorneys, trust banks, or heirs themselves commonly serve.

Duties: Estate management, real estate inheritance registration, bank account closure and distribution, carrying out bequests, and filing acknowledgment of paternity. The executor holds an independent position to realize the will's contents rather than acting as agent for all heirs (Art. 1015).

2019 reform: Clarified executor authority, particularly allowing executors to independently complete perfection requirements for specific property dispositions (Art. 1014-2).

Compensation: If not specified in the will, determined by the family court (Art. 1018). Market rate is approximately 1-3% of the total estate value.

When heirs cannot reach agreement through private negotiation, family court mediation provides a structured resolution process.

Mediation (Domestic Relations Case Procedure Act Art. 244): A mediation committee (1 judge + 2 mediators) facilitates discussion and agreement. Mediation is a voluntary process — if agreement is not reached, it ends in non-establishment.

Adjudication: When mediation fails, the case automatically transitions to adjudication proceedings (Art. 272-4). The judge determines the division method based on statutory shares, adjusted for each heir's circumstances.

Division methods: (1) In-kind division — allocating specific assets to each heir; (2) Compensatory division — one heir takes assets and pays others; (3) Sale division — selling assets and distributing proceeds; (4) Co-ownership.

Special benefit (Art. 903): Lifetime gifts from the decedent to an heir are factored back into the estate for calculation purposes. Exemption from clawback is possible (Art. 903-3).

Special contribution (Art. 904-2): Heirs who significantly contributed to maintaining or increasing the estate (caregiving, business assistance) may claim an increased share.

Since April 1, 2024, registering inherited real estate has become mandatory (Real Property Registration Act Art. 76-2), addressing Japan's extensive ownerless land problem.

Deadline: 3 years from learning of the inheritance and ownership acquisition. If estate division is completed, 3 years from the division date.

Penalty: Fines up to ¥100,000 for non-compliance without just cause.

Heir declaration registration (Art. 76-3): A simplified filing available when estate division is incomplete — simply declaring heir status satisfies the obligation.

Retroactive application: Inheritances occurring before April 2024 are also covered, with a grace period through March 31, 2027.

Background: Ownerless land is estimated at approximately 24% of Japan's total land area, obstructing public works and urban development.