CONTENTS
- 1. Inheritance After Death, What Were the Detailed Circumstances?
- - Inheritance After Death, What Are the Relevant Statutes?
- 2. Inheritance After Death, What Was the Court's Determination?
- 3. Inheritance After Death, What Was Daeryun's Strategy?
1. Inheritance After Death, What Were the Detailed Circumstances?
In this inheritance-after-death dispute, Plaintiff A, who filed a suit for the return of investment funds against the decedent's heir, was a victim who had suffered investment fraud at the hands of the decedent.
A (hereinafter the Plaintiff) entered into a contract to take over an online shopping mall from the decedent, B, and to receive online business consulting services, and then paid B 79 million won.
At the time the contract was concluded, B agreed that, if the net profit from operating the online shopping mall fell short of 30 million won over three months, B would return the 79 million won.
However, after the takeover, the net profit did not reach 30 million won, and B promised to return the 79 million won to A.
However, five days later, B took his own life, and his heirs were his spouse, C, and their children.
To recover the investment funds of which he had been defrauded, A, with the assistance of the Korea Legal Aid Corporation, filed a suit against B's heir, his spouse C (the Defendant), claiming 79 million won.
C, however, argued that she and her children had all obtained adjudications accepting their renunciation of inheritance and therefore bore no responsibility to return the investment funds.
Inheritance After Death, What Are the Relevant Statutes?
There are 🔗three methods of inheritance, which transfer the rights and obligations over property to another person after death.
An heir may, within three months from the day on which the heir becomes aware of the commencement of inheritance, choose one of the following methods of inheritance.
(※ If three months pass, the heir is deemed to have made an unconditional acceptance.)
■ Unconditional Acceptance
Unconditional acceptance means that the heir succeeds to all of the inherited property.
▣ Article 1025 of the Civil Act (Effect of Unconditional Acceptance) When an heir has made an unconditional acceptance, the heir succeeds to the rights and obligations of the decedent without limitation. |
▣ Article 1026 of the Civil Act (Statutory Unconditional Acceptance) In any of the following cases, the heir shall be deemed to have made an unconditional acceptance.
1. Where the heir has performed an act of disposition with respect to the inherited property 2. Where the heir has not made a qualified acceptance or a renunciation within the period under Article 1019 (1) 3. Where, after making a qualified acceptance or a renunciation, the heir has concealed the inherited property, wrongfully consumed it, or intentionally failed to enter it in the inventory of property |
■ Renunciation of Inheritance
This refers to an heir's declining to succeed to any of the rights and obligations of the decedent.
Once a renunciation of inheritance is accepted by the Family Court, that inheritance share is vested in the other heirs who have not renounced, in proportion to their respective inheritance shares.
■ Qualified Acceptance
This is an acceptance of inheritance on the condition that the debts and testamentary gifts of the decedent will be repaid only within the limit of the property to be acquired through the inheritance.
Once a qualified acceptance is accepted by the Family Court, the heir must proceed through the repayment procedure for the positive inherited property with respect to creditors and other interested parties.
2. Inheritance After Death, What Was the Court's Determination?
The District Court, which heard the suit for the return of the investment funds arising from this inheritance-after-death dispute, found in favor of Plaintiff A.
The court held, “Although it is recognized that the Defendant and her children obtained adjudications accepting their renunciation of inheritance, the Defendant is deemed to have made an unconditional acceptance, and she must therefore be regarded as having solely inherited the decedent's property.”
According to what the Legal Aid Corporation confirmed through an order to submit financial transaction information, beginning the day after B's death, 3.5 million won was transferred to C's account in five installments, and the entire amount was found to have been used by C for living expenses and the like.
Accordingly, the court, citing Articles 1025 and 1026 of the Civil Act, stated that where an heir disposes of the inherited property the heir is deemed to have made an unconditional acceptance, and held, “Although the Defendant renounced the inheritance, she is found to have arbitrarily consumed the decedent's property before the renunciation, so the Defendant's renunciation of inheritance is void, and she is deemed to have made an unconditional acceptance of the decedent's inheritance.”
The court therefore ruled, “The Defendant shall pay the Plaintiff the 79 million won in returnable investment funds agreed upon by the decedent, together with delay interest.”
The Legal Aid Corporation, which investigated the case, added, “Where the wrongdoer has family members forming an economic community, it is necessary to examine those financial relationships closely and to carefully review whether grounds for statutory unconditional acceptance exist, such as the disposition or wrongful consumption of inherited property.”
3. Inheritance After Death, What Was Daeryun's Strategy?
This was a District Court judgment holding that, in an inheritance-after-death dispute, where an heir of a decedent obligated to return investment funds disposed of the inherited property at will, this is recognized as an unconditional acceptance, and the heir bears an obligation to repay the debt.
An inheritance dispute may appear on its face to be a simple legal matter, but depending on the circumstances it can become highly complex. In such cases, obtaining the assistance of an attorney experienced in resolving inheritance disputes is a prudent approach.
The 🔗Inheritance and Family Group of Daeryun Law Firm LLP systematically prepares for inheritance disputes following a decedent's death and works to assist clients so that legal losses relating to the division of inherited property, inheritance tax, and the settlement of inherited debts can be minimized.
In addition to attorneys handling inheritance and family matters, the firm includes attorneys across various practice areas, allowing it to respond flexibly to the various civil and criminal proceedings connected with inheritance disputes. If you need related assistance, you are welcome to request a legal consultation with Daeryun Law Firm LLP at any time.
