Do You Need A Will In Japan? Statutory Vs. Will-Based Inheritance According To Japanese Law

do I need a will if i live in japan as a foreigner?

Most people aren’t inclined to spend much time thinking about their own death. Unfortunately, if you aren’t proactive about planning for your death, this means that statutory law, and not you, will be the main determinant of who receives your remaining assets in Japan and how. But statutory law has its limits. So, what happens to the loved ones you leave behind if they aren’t viewed as your legal heirs in the eyes of Japanese inheritance law?

What Is Statutory Inheritance?

Statutory inheritance, in Japan as well as other countries, refers to the default legal provisions and regulations that determine how an individual’s assets and liabilities are distributed upon their death when they have not left behind a legally valid will. A will is a document that designates how an individual wishes for his or her property to be distributed after death. When a will is lacking, the rules of statutory inheritance take its place. 

In essence, statutory inheritance is the government’s default plan for distributing an individual’s estate after they have died. This system prioritizes certain relationships and provides a structured hierarchy for asset distribution.

The primary objective of statutory inheritance is to ensure that an individual’s estate is distributed in a manner that most people might choose and to ensure that close relatives, particularly dependents, are provided for. The specifics of statutory inheritance can vary considerably from one country to another due to cultural, social, religious, and historical factors. Some of the differences can include:

  • -Order of Succession: In many Western countries, the spouse and children typically have priority. If there are no children, the spouse might inherit the entire estate. In contrast, some jurisdictions might prioritize parents or siblings over a deceased’s spouse, especially if there are no children.
  • -Treatment of Spouses and Children: In some jurisdictions, a surviving spouse will receive a specific share, and the children will divide the remainder equally. In other systems, the spouse might inherit everything, with children or other heirs only inheriting if there’s no surviving spouse.
Statutory Vs. Will-Based Inheritance According To Japanese Law
    1. -Rights of “Illegitimate” Children: Some countries treat all children equally, regardless of whether they were born within or outside of wedlock. Others might have distinctions, with illegitimate children receiving a different share or no share at all.
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    1. -Rights of Same-Sex Partners: While many countries have made progress in recognizing the rights of same-sex couples, not all grant them the same inheritance rights as heterosexual couples.
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    1. -Consideration for Extended Family: In some cultures, extended family members such as uncles, aunts, or cousins may have rights to inheritance if closer relatives are not present. In other systems, the state might inherit the estate if no close relatives can be found.
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    1. -Customary and Religious Laws: Some countries, especially those with diverse ethnic or religious populations, may recognize customary or religious inheritance laws alongside or instead of the formal statutory inheritance system. For example, in some Islamic jurisdictions, inheritance is governed by Sharia law, which prescribes specific shares for various heirs.
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    1. -State Claims: If no heirs can be found in some jurisdictions, the deceased’s assets might “escheat” to the state, meaning the government inherits them. In other countries, efforts might be made to locate more distant relatives before the state claims the estate.
    2.  

As you can see, while the principle of statutory inheritance is common globally, its specifics vary widely. But what are the laws in Japan, specifically, and how do they affect foreign residents? 

How Does Statutory Inheritance Work In Japan?

Statutory inheritance in Japan is regulated by the Civil Code. If no legal will exists, statutory heirs will discuss and divide the estate based on legal inheritance rules stipulated by this code. These rules are defined by a few specific concepts:  

  • 1. Legal Heirs:

    1.  
    2. The primary heirs are spouses, children, parents, and siblings. If multiple people qualify, precedence is given to children, then parents, and finally siblings. Only the top-tier group inherits. In other words, the parents of the deceased will be designated as recipients of an inheritance only if there are no children. Similarly, siblings will only be designated as recipients if there are neither children nor surviving parents.

Legal Heirs, Inheritance by Proxy, Statutory Inheritance Share, Survivorship
    • Only legal heirs can participate in discussions of estate division, and they use the statutory inheritance shares as a guideline. As such, legal heirs can decide upon a different distribution of assets than statutory inheritance rules would dictate. However, all legal heirs must be in agreement with this decision.
  • 2. Inheritance by Proxy

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    • If a primary heir (child or sibling) predeceases (dies before) the deceased, their descendants (e.g., grandchildren or nephews) become the heirs. 
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  • 3. Statutory Inheritance Share
    • The statutory inheritance share is predetermined by the Civil Code and depends on the relationship between the heir and the deceased. However, heirs can agree on a different division. If a dispute arises and reaches trial, judges will resort to the legal statutory inheritance share for a verdict.

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  • 4. Survivorship

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    • Distinct from legal inheritance, survivorship ensures a minimum guaranteed percentage of the estate for legal heirs excluding the deceased’s siblings. If the legal heirs include a spouse or children, these heirs are entitled to at least 1/2 of the estate, with this value divided among them. If the deceased leaves behind no spouse or children, but the parents remain, they are entitled to 1/3 of the estate. If all three (the spouse, the children, and the parents) survive the deceased, the 1/2 inheritance guarantee will be divided amongst them according to these percentages.
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This creates a rather complex set of rules and guidelines for statutory estate division in Japan, as the guaranteed inheritance for legal heirs will depend on the number of heirs remaining and their relation to the deceased. To make it more clear, here are a few concrete examples:

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  • -Spouse & Two Children: Spouse gets 1/2, each child gets 1/4.
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  • -Spouse, Two Children & Child from Common-Law Partner: Legal spouse gets 1/2, three children each get 1/6.
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  • -Spouse & Parents: Spouse gets 2/3, parent gets 1/6.
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  • -Spouse, Brother, & Sister: Spouse gets 3/4, siblings get 1/8 each.
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  • -Two Children & Deceased Child’s Two Children: Living children get 1/3 each, grandchildren (via deceased child) get 1/6 each.
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What About Your Non-Legal Heirs? 

If you have a common-law partner, step-children, or an ex-spouse, you may have noticed these people conspicuously missing from the list of legal heirs above. So, what happens to these relations if you die and your estate is divided according to Japanese statutory law? 

What About Your Non-Legal Heirs?

As you may already suspect, the answer is grim. Statutory inheritance law in Japan dictates that your non-legal heirs are in no way entitled to any portion of your estate after your death. This means that any of the following relations could be entirely left out of an inheritance you leave behind: 

    • -Divorced Ex-Spouse
    • -Common-Law Partner
    • -Same-Sex Partner (as Japanese law does not officially recognize same-sex partnerships as marriages)
    • -Son/Daughter-In-Law
    • -Stepchildren
    • -Any others not included on the list of legal heirs

Although it is possible that surviving legal heirs could willingly share the inheritance with non-legal heirs, there is only one way to guarantee: leaving a legal will. Unless the deceased person has left a valid will indicating otherwise, non-legal heirs will have no default claim to the estate under Japanese law.

Will-Based Inheritance: Protecting Your Non-Legal Heirs In Japan

A will is a legal document where individuals can specify who gets what from their estate. In inheritance order, this document has the highest priority. Only statutory laws of survivorship (as defined above) cannot be overwritten by a legal will. This means your will can differ from the default distribution specified by statutory inheritance laws, offering benefits such as:

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  • -Customized Asset Distribution: A will allows you to decide precisely how your assets should be distributed upon your death. They can allocate specific assets to particular individuals, which isn’t possible with the default statutory inheritance laws.
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  • -Protection of Non-Legal Heirs: As you’ve seen, Japan’s statutory inheritance laws have a predetermined hierarchy that may not include all of your loved ones. With a will, you can ensure that those you designate – even non-legal heirs – will receive a portion of your estate.
Will-Based Inheritance for Foreign Residents in Japan
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  • -Minimization of Disputes: Clearly articulating your wishes in a will can help reduce potential disputes among family members or other heirs. By specifying who gets what, you leave less room for interpretation by the government and legal heirs, which can be a source of conflicts in the absence of a will.
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  • -Tax Planning: A will can be structured in ways to optimize tax implications for the heirs. While this may require specialized guidance from your financial adviser, it allows for a more strategic approach to asset distribution considering the potential inheritance tax in Japan.
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  • -Protection of Minor Children: If you have minor children, you can specify guardianship arrangements in the will. Without a will, the courts may decide on guardianship, which might not align with your wishes.
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  • -Special Bequests: With your will, you can designate specific items or sums of money to be donated to organizations, charities, or causes you care about.
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  • -Flexibility: A will allows the individual to address specific circumstances, such as the creation of a trust for a beneficiary with special needs or stipulations on how certain assets should be used (e.g., a property to remain in the family).
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  • -Ease of Process: Leaving behind a clear legal will can simplify the inheritance process for your loved ones, making it faster and more straightforward for them during an emotionally challenging time.
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  • -Peace of Mind: Knowing that your assets will be distributed according to your wishes can provide you with greater peace of mind. You can rest assured that their loved ones are taken care of and that your legacy is preserved as you intend.
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As you can see, crafting a legal will is paramount if you want to have a say in how your assets are distributed after your death. However, this is not a simple task. Creating a valid and effective will in Japan requires familiarity with Japanese inheritance and tax law. This process often becomes even more complicated for foreign residents, who often have assets housed in multiple countries and international heirs to consider.

Creating Your Legal Will In Japan

The best way to establish an effective, legal will is by consulting a professional. An internationally experienced financial advisor can offer insights on tax implications in both Japan and your home country. As such, they can help ensure a will that distributes your assets according to your wishes while avoiding unnecessary taxation or legal complications. 

Financial professionals stay updated with regulatory changes, meaning they can even guide you on currency considerations and provide tailored advice based on individual financial situations. In short, by consulting with a professional, you can guarantee that your assets and, more importantly, your loved ones will be protected even after your death.

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