Yoon Ji-sang, Managing Attorney | Hankyung Law & Biz Law Street Column

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Freedom to Make a Will, Yet the Barrier of Reserved Portion

In his column, Managing Attorney Yoon Ji-sang examines the freedom to make a will, which is based on the freedom to dispose of private property, and how it is intertwined in the complex inheritance structure in practice. Although a person can directly decide how assets are distributed through a will, the Civil Act guarantees a reserved portion of 1/2 of the statutory inheritance share to lineal descendants and the spouse, and 1/3 to lineal ascendants. This reserved portion system serves as an important mechanism that limits the freedom of testamentary disposition, ultimately creating the legal reality of "my property, yet I cannot dispose of it as I wish."

The Difference Between Testamentary Inheritance and Statutory Inheritance

According to Managing Attorney Yoon Ji-sang's column, inheritance is broadly divided into testamentary inheritance and statutory inheritance. Testamentary inheritance can take various forms, including wills by notarized deed, trust substitutes for wills, holograph wills, recorded wills, secret wills, and nuncupative wills. A gift made in contemplation of death has a similar effect to a will. A will may be made not only for heirs but also for third parties or corporations, but unlike the United States, many people in Korea die without a will, making statutory inheritance even more significant.

Order of Statutory Inheritance — Common-Law Spouses Do Not Inherit

The order of statutory inheritance is set in the following order: lineal descendants, lineal ascendants, and siblings of the decedent, while the spouse is always an heir. Notably, a legally married spouse is recognized as having inheritance rights even if the couple is effectively separated or in the middle of divorce proceedings, but a common-law spouse has no inheritance rights. In modern society, the most common first-priority heirs are lineal descendants, and there is no difference in inheritance shares between biological children and adopted children, or between children born within marriage and children born out of wedlock. However, a fully adopted child is severed from the relationship with the biological parents and therefore cannot inherit from them. Recognition of a child born out of wedlock after the biological father's death takes effect retroactively to the time of birth, so the recognized child becomes a co-heir along with the father's other lineal descendants.

Substitutional Inheritance and Disqualification from Inheritance

Managing Attorney Yoon Ji-sang points out substitutional inheritance, which is often overlooked in the inheritance process. If a child dies before the opening of the inheritance or is disqualified, that child's children (grandchildren) and spouse (daughter-in-law or son-in-law) inherit in the child's place. However, in the case of remarriage, the affinity relationship is extinguished, so there is no right of substitutional inheritance. The Civil Act also clearly specifies grounds for disqualification from inheritance, including murder or manslaughter of a lineal ascendant or the decedent, obstruction or coercion related to a will, and forgery, alteration, destruction, or concealment of a will, in which case the person is deprived of inheritance eligibility.

The Limits of the Law That Even a Will Cannot Override

Managing Attorney Yoon Ji-sang concludes the column as follows. Even if the property is mine, a will alone cannot design every inheritance structure. That is because mandatory provisions set out in the Civil Act, such as the reserved portion, the order of statutory inheritance, substitutional inheritance, and disqualification from inheritance, place certain limits on the freedom to make a will. Therefore, when preparing for inheritance, it is important not to stop at simply drafting a will, but to predesign the most efficient asset distribution structure within the boundaries of the mandatory rules set by law.

"Family Law Unboxing" is regularly serialized in Hankyung Law & Biz Law Street of the Korea Economic Daily. Managing Attorneys Yoon Ji-sang and No Jong-eon of Exists Law Firm take turns addressing key issues in divorce and inheritance based on their practical experience.