Is there a way to avoid inheriting debts in Japan?

When a foreign national dies in Japan, under which country’s laws is the probate handled?
February 24, 2016
How is property distributed when a Japanese person dies without a will?
February 24, 2016
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There are two types of things that can be inherited when a relative dies: assets and debts. Most people will be happy to accept the assets of a deceased relative, but few will be willing to take on their debts. In addition, in many cases it would be unfair to force an heir to pay off the debts of a deceased relative.

To solve this problem, Japanese law provides a mechanism called “limited consent.” Limited consent allows heirs to accept the deceased’s debts only up to the amount of assets that they receive. For example, if an heir is set to receive 50,000JPY in assets, but also 70,000JPY in debt, the heir may accept 50,000JPY each of assets and debt (which would cancel each other out) and make an application to the family court to reject the remaining debt of 20,000JPY. This allows the heir to make a clean repayment with the available assets and not have to worry about any further debt. However, limited consent is only available when all of the heirs can agree on it and all of the heirs must make an application to the family court together.

If you have any questions about probate and inheritance in Japan, please contact our office for a legal consultation.