CONTENTS
- 1. Lawsuit for Return of the Legally Reserved Portion, What Were the Detailed Circumstances?
- - Lawsuit for Return of the Legally Reserved Portion, What Are the Relevant Statutes?
- 2. Lawsuit for Return of the Legally Reserved Portion, What Was the Court's Determination?
- 3. Lawsuit for Return of the Legally Reserved Portion, Daeryun's Strategy
1. Lawsuit for Return of the Legally Reserved Portion, What Were the Detailed Circumstances?
A, who filed the lawsuit for the return of the legally reserved portion, had received from her parents-in-law cash of approximately 378 million won and real-property shares valued at approximately 639 million won.
A's husband, B, was diagnosed with end-stage bile duct cancer, and after a period of treatment he passed away; approximately three years later, A's parents-in-law also passed away. As a result, A and her children, who are B's heirs, came to inherit the parents-in-law's assets as B's heirs by representation.*
Asserting that their legally reserved portions had been infringed, A and her children filed a lawsuit for the return of the legally reserved portion against the husband's brother, C.
*Heir by representation: where a lineal descendant or sibling who would have been an heir dies or becomes disqualified before the commencement of inheritance, the lineal descendant or spouse of that person who becomes an heir in place of and in that person's order of succession.
Lawsuit for Return of the Legally Reserved Portion, What Are the Relevant Statutes?
The legally reserved portion refers to a certain portion of the inherited property that the law reserves for certain heirs.
🔗A lawsuit for the return of the legally reserved portion is a lawsuit that claims the legally reserved portion, the minimum proportion of the inherited property that an heir may receive under inheritance law, regardless of the decedent's intention.
The right to the legally reserved portion belongs to the decedent's lineal descendants, lineal ascendants, or spouse, and an unborn child and an heir by representation also hold this right.
(Siblings no longer have the right to claim the legally reserved portion, owing to the Constitutional Court's decision of unconstitutionality in April 2024.)
The right to claim the return of the legally reserved portion is extinguished by prescription if it is not exercised by the person entitled to the reserved portion within one year from the day on which that person became aware of both the commencement of inheritance and the gift or testamentary gift subject to return. It is likewise extinguished by prescription where ten years have elapsed from the day on which inheritance commenced.
What matters in this type of lawsuit is the distinction between a special benefit and a gift. A special benefit refers to property that the decedent gifted to an heir during the decedent's lifetime, and such a special benefit is taken into account when calculating the inheritance share.
2. Lawsuit for Return of the Legally Reserved Portion, What Was the Court's Determination?
The principal issue in the lawsuit for the return of the legally reserved portion was ‘whether the property that the parents-in-law had gifted to A could be regarded as B's special benefit.’
The court of first instance held that the mere fact that A had received gifts from her parents-in-law before B's death could not, by itself, make those gifts a special benefit, but that if the gift made to the daughter-in-law is recognized as being, in substance, no different from a gift made to B, their son, it may be regarded as a special benefit.
The court explained that “it appears that B's parents gifted the property to A for the purpose of supporting the surgery and treatment costs needed by B, who had been diagnosed with end-stage bile duct cancer,” and that “because gifting the property directly to B could have given rise to inheritance-tax burdens, it is determined that they gifted it to A instead.”
The appellate court also reached the same conclusion.
The court of second instance held that “if a gift the parents-in-law made, before B's death, to A or to a grandchild who stands in the position of a lineal descendant is in substance no different from a gift made to B, then a gift to the lineal descendant or spouse of the heir by representation (B) may also be considered a special benefit, as an advance on the inheritance share with respect to the person represented.”
On this basis, after assessing the inheritance shares, the court determined that there was no shortfall in the legally reserved portions of A and her children.
3. Lawsuit for Return of the Legally Reserved Portion, Daeryun's Strategy
In hearing this lawsuit for the return of the legally reserved portion, we analyzed a High Court judgment holding that, where a gift made to a daughter-in-law before the husband's death is found to be no different from a gift made to the husband, the asset may be regarded as the husband's ‘special benefit.’
According to the National Tax Service, 19,944 people inherited property from lineal ascendants such as parents in 2023, more than double the figure four years earlier. Accordingly, legal disputes relating to the distribution of property among co-heirs are also increasing.
In particular, as cases of lawsuits for the return of the legally reserved portion, which may be raised against an unfair division of property, have increased, more people are seeking attorneys experienced in inheritance matters.
Because a lawsuit for the return of the legally reserved portion can involve complicated timeframes and procedures, you may wish to seek the assistance of an attorney experienced in inheritance matters.
Daeryun Law Firm LLP, through its 🔗attorneys handling inheritance matters, works diligently to assist clients in conducting their cases in a favorable direction. If you need assistance, you are welcome to request a legal consultation at any time.
