general practice

The burden to pay Japanese inheritance tax falls on the heirs, not on the estate itself.  However, in some cases, the heirs may not live in Japan and therefore would not normally be subject to Japanese tax.  Therefore, for inheritance tax purposes, non-resident heirs are considered “limited taxpayers” and are subject to tax on any assets they inherit located in Japan.

The advantage of drafting a will in Japan is that the drafter can choose who to give his or her assets to and in what amounts.  However, there are limits on how freely property can be distributed after death in Japan.  Japanese law dictates that, regardless of what is stated in a will, spouses and children are entitled to part of the decedent’s estate.  This minimum is set by law and can be claimed by spouses and children upon request to the court.

Normally, heirs to a deceased in Japan will not inherit any of the deceased’s estate until the probate process is completed.  This ensures that the process is conducted correctly and each heir receives a fair distribution.  However, it is possible to include language in a will that ensures an heir can immediately receive a particular asset without waiting for probate to finish.