By Hung Ou Yang and Yu-Chen Lin
People have no way to predict their death so in most of the cases the decedent would not have sufficient time and chances to deal with their properties or debts. Here, the most frequently asked question regarding the estate located in Taiwan is who can inherit the estate if there is no will. We hereby introduce the Taiwanese inheritance law which is encompassed in Taiwanese Civil Code ("Civil Code") as follows:
Who Can Inherit?
To start off, a foreigner with no Taiwanese citizenship may inherit the Taiwanese estate if there is no will. In principle, the governing law will be the national law of the decedent. Where a foreigner passes away leaving properties in Taiwan but no person is entitled to take the properties per the national law of the decedent, the Taiwanese laws will be applied to such properties. In practice, when a decedent leaves properties in Taiwan, Taiwanese lawyers will use the Civil Code as an initial step to analyze who may have a right to inherit such properties regardless of whether the potential heirs have a Taiwanese citizenship or not.
The decedent's surviving spouse definitely has a right to inherit. As to the other heirs, the Civil Code provides for an order of inheritance. The first tier refers to the decedent's lineal descendants by blood, namely children, grandchildren or great-grandchildren who are directly related to the decedent by blood. The second tier refers to the decedent's parents. The third tier refers to the decedent's siblings. The fourth tier refers to the decedent's grandparents. In terms of the inheritance right, the first tier takes precedence over the second tier, and the second tier takes precedence over the third tier, and so on and so forth. Among persons of the first tier, the person nearest in degree of relationship takes precedence. For example, when the decedent is survived by his spouse, two children, and three grandchildren, his estate may be inherited by the surviving spouse and two children only. Here, the three grandchildren will have no right at all.
Moreover, if any of the decedent's child had passed away or was deprived of right to inheritance before the decedent's death, that child's lineal descendants shall inherit that child's shares in conjunction with the decedent's surviving spouse and other surviving children. For example, when the decedent had Child A and Child B but is survived by his spouse, Child B, and Grandchild C and Grandchild D who were born by Child A, his estate shall be inherited by the surviving spouse, Child B, Grandchild C and Grandchild D because Child A had passed away before the decedent's death.
When the decedent has no offspring, his surviving spouse may inherit his estate in conjunction with the decedent's parents as the second tier.
When both of the decedent's parents passed away earlier than the decedent, his surviving spouse may inherit his estate in conjunction with the decedent's siblings as the third tier.
When the decedent has no siblings, his surviving spouse may inherit his estate in conjunction with the decedent's grandparents as the fourth tier.
To inherit or not to inherit, that is the question
The issue is that a decedent might leave assets with huge debts when passing away so that the heirs have to think about whether it is worth paying the debts with their own assets. When the decedent left debts more than assets, Section 2 of Article 1148 of the Civil Code provides for the most basic principle of inheritance under Taiwanese laws: Any heir's liabilities to the debts owed by the decedent are limited to the extent of the inherited assets acquired from the estate. This is called the regime of succession with limited liability. In this regard, the heirs do not have to worry that they inherit more debts than assets.
Moreover, if an heir wishes to inherit neither assets nor debts from the decedent's estate for certain reasons, he must file a petition to waive his right of inheritance to a Taiwanese court within three months since he knows the decedent passed away. See Article 1174 of the Civil Code. Also, the heir who files such a petition shall notify all the other potential heirs in writing for such a waiver. However, failing to notify all the other potential heirs does not mean the waiver will be invalid. The Taiwanese Supreme Court stressed that the purpose of such notification is to let the other potential heirs know the waiver of inheritance so it is not a requirement for the waiver procedures. See 107 S.C. Taishan No. 1110 (2018) (ruled that the waiver might still be valid when the notification was not complete because such notification is not required for the waiver to take effective under the Civil Code). Having said so, when an heir would like to waive his right of inheritance for certain reasons like avoiding huge taxes, it will be better off to consult a lawyer for legal advice in advance.
AUTHOR: Hung Ou Yang
Managing Partner
Taipei
+886-2-2707-9976
[email protected]
Copyright Brain Trust International Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
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