What is often missing from an inheritance division agreement

It is easy to think that once the siblings have talked it through, all that is left is the paperwork. But division of inherited property is a legal act whose effect goes back to the time the inheritance began (Article 1015 of the Civil Act), so a single phrase in the agreement can determine registration, banking matters and even later disputes.

First, did everyone take part?

Division by agreement requires the participation of all co-heirs. They don't need to gather in one place; the agreement can be passed around for each to sign and affix their registered seal. But if even one person is left out, the agreement has no effect. More often than you might think, people are left out, such as children from a marriage before remarriage, or heirs by representation (대습상속인) like the spouse and children of a sibling who died earlier.

If a mother and her minor children are heirs together, the mother cannot represent the children in the agreement. Because their interests conflict, a special representative must be appointed by the family court for each child (Article 921 of the Civil Act). If there are two children, each has a separate special representative.

A person whose renunciation of inheritance has been accepted was never an heir from the start, so they are left out of the agreement, and the court decision on the renunciation is attached at registration. Conversely, an heir who has lost contact and whose whereabouts are unknown cannot simply be left out, so you apply to the family court for appointment of an administrator of an absentee's property, and the administrator takes part in the agreement with the court's permission.

Describe property exactly as in the register and bankbook

For real estate, you need to write the lot number and area, and for deposits, the bank and account number, so that the agreement can be used as is for registration and closing accounts. It is also a good idea to include a clause on what to do with property discovered later. Without it, a single newly found bankbook means getting everyone's seal again.

Agreeing to take nothing is not the same as renouncing the inheritance

Some people think that because they agreed to take nothing in the agreement, they have no debts either. But that only settles how the family divides the property; it is not a renunciation of inheritance that releases you from debts to creditors. To avoid inheriting debts, you must file a renunciation or qualified acceptance (한정승인) with the family court within 3 months, and if you do things in the wrong order, stamping your seal on the agreement could be seen as disposing of inherited property.

Debts are not settled by the agreement alone

Siblings can agree among themselves that the person who receives the house will repay all of the deceased's loans. However, the deceased's monetary debts pass to each heir according to their share of inheritance, so unless the bank consents to that assumption of debt, the other siblings remain liable to the bank (Article 454 of the Civil Act). The same goes for the obligation to return a tenant's deposit, so write down who will bear it and notify the bank and the tenant.

Notarization is not a requirement for validity, but once an agreement takes effect, it is hard to undo on the grounds of a change of heart. Before stamping your seal, please calculate at least once what your share is after reflecting special benefits (특별수익) and contributions (기여분). If this overlaps with the inheritance tax filing deadline (6 months from the last day of the month in which the inheritance began), it is also a good idea to get a tax review.