Division of Inheritance
After an inheritance commences, unless the deceased dictated how he/she wanted to divide his assets in his/her will, the assets become a shared property. This shared state of the assets should be dissolved as quickly as possible, and the means to do this is to execute an Agreement on Division of Inheritance.
Types of Division
A method of division according to the contents of the deceased’s will or by a person who has been appointed as the designator in the deceased’s will. (Civil Code 908) As long as the designator distributes the assets to each heir in accordance with the percentages designated in the will, he/she has the power to distribute the type of asset (land, cash, etc.), in any way she/he sees fit. However, if the designator changes the proportions of the inheritance given to each heir, this is no longer a “designation of manner of division”, but has the function of “devise” (“izou”) or “designation of portion”. Therefore, if a person whohas been appointed as a designator designates such a division, it will be deemed invalid.
All the heirs talk about how the assets should be divided. In many cases, an “Agreement on Division of Inheritance” is prepared so that they can prevent further disputes and use this document for many procedures related to the inherited property.
① Division in Kind
Heir X and Heir Y receive Property A and Property B in halves of each piece of property.
② Individual Division
Heir X receives Property A, and Heir Y receives Property B.
③ Conversion Division
Convert both Property A and Property B to money and distribute the money to the heirs.
④ Compensation Division
Heir X receives both Property A and Property B and he pays Heir B an amount of money
equivalent to the value of half of the price of the property he receives.
You can choose one of the methods above. You are also allowed to combine two or more methods.
【Division by Ruling】
In case an agreement cannot be reached, or one or more of the heirs cannot be contacted at all, one of the heirs has the right to file a “Request for Division of Inheritance” to a Family Court. The Family Court renders a decision on the division of inheritance, “taking account of all circumstances”. (Civil Code 906)
Limitation of Retroactive Effects of Division
The division of inheritance property goes into effect retroactively to when the inheritance commenced (Civil Code 909). Even so, in the case that a third party has already bought or received a part of the inheritance property from one of the heirs and has already obtained a “perfection requirement” (“taikou youken”) (such as a real estate registration, the physical delivery of chattels, or deeds with a fixed date for claims) by the time the Agreement on Division of Inheritance is executed, this portion of the inheritance cannot be used to calculate the sum of the inheritance property. The law protects such a third party. In this sense, the retroactive effects of division are limited.