Division of the Estate

Division by agreement (협의분할) is valid only if all the co-heirs take part. They do not have to meet in one place: one person can draw up the agreement and pass it around for each heir to sign and stamp with their registered seal. However, an agreement that leaves out even one heir, or that one heir did not consent to, is void, and any registration based on it can be challenged.

The agreement should list every heir's name and resident registration number and state specifically who takes each asset. All heirs then stamp it with their registered seals and attach a certificate of seal impression (인감증명서). Real estate should be described down to the lot number and area, and deposits down to the bank and account number, so the agreement can be used as it is for registration and banking. Adding a clause on assets not listed, such as 'any remaining assets and debts follow the statutory shares', reduces new disputes over assets found later.

When a parent and child are heirs at the same time, for example a mother and her minor children, the mother cannot negotiate on the children's behalf. A special representative (특별대리인) must be appointed by the family court for each child and take part in the agreement (Civil Act Article 921). If there are two children, each needs a separate special representative.

If an heir has lost contact and their whereabouts are unknown, ask the family court to appoint an administrator of an absent person's property (부재자재산관리인). With the court's permission, the administrator takes part in the agreement or becomes a party to the adjudication. Keep in mind that if you put things off for years waiting for one heir's consent and another heir dies in the meantime, that heir's spouse and children also become parties to the agreement.

Even without an agreement, one heir can apply to register the property in all the heirs' names according to their statutory shares. This puts the registration in a co-owned state for now, but it also registers the shares of heirs who did not consent, and it does not complete a final division reflecting special benefits or contribution shares.

The Supreme Court views co-heirs as provisionally co-owning the estate in their statutory shares until division, with ownership of each asset settled only when the estate is divided according to each heir's specific share, taking special benefits and similar factors into account. So the fact that someone registered the statutory shares first does not settle the outcome, and the shares can be adjusted again in the division adjudication.

One or more heirs request an adjudication on division of the estate (상속재산분할) against all the remaining heirs (Family Litigation Rules Article 110). Because mediation must come first, the case usually begins with a mediation date, and if mediation fails, the court holds a hearing and issues an adjudication. To claim a contribution share (기여분), you must file a petition to determine it together with the request for division, and if the court sets and announces a period for such claims, you must file within it (Article 113 of the same Rules).

The court divides all the property subject to division at once. For property that is hard to divide, such as a home, the court may give it to one person and have that person pay the other heirs the difference in cash (Article 115 of the same Rules), or order it sold at auction and the proceeds divided. Including mediation, this usually takes around a year, and longer if real estate appraisals or financial transaction inquiries drag on.

There is no statutory deadline for dividing an estate, but inheritance tax must be reported within 6 months from the last day of the month in which the inheritance began, and some deductions, such as the spousal inheritance deduction, apply only if the division is completed within a set period. If a division adjudication is under way, there is a way to state this when filing the tax return, so if the negotiations look likely to take a long time, coordinate the schedule with a tax accountant in advance. We can also work together with a tax accountant who cooperates with Jisan Law.