What will happen if you pass away without making a will?

As noted in previous columns, I recommend that you prepare a notarized will. If a will has been prepared, a decedent's property will usually be inherited in accordance with the terms of that will.
On the other hand, of course, many people die without making wills. If a person dies without making a will, how will the decedent's estate be treated?
In this column, I would like to explain "if a decedent dies without making a will, what kind of inheritance procedures must be taken under the Japanese law?”
*Please note that the Japanese law does not necessarily apply to the inheritance of foreign nationals.

Outline of procedures

If a person passes away without making a will, usually the inheritance procedures will follow the steps below;

Determine legal heirs through investigation of legal heirs (obtain copies of all family registers from birth to death of the decedent and other related family registers.)
Investigate the deceased’s estates to determine the scope of estates to be inherited.
Make an agreement for division of inherited property between all legal heirs (out-of-court procedure.)
If the parties are unable to reach an agreement, they may file for mediation with a family court regarding the division of estates.
If the mediation is unsuccessful, the case will be moved to adjudication, where a decision will be made by a judge.

Although it may look like a simple course of procedures if put into words, there are various risks involved. Below are explanations of those risks.

Omissions of heirs in the investigation can invalidate the agreement for division of inherited property

If new legal heirs are found after procedures of estates division has been completed, the procedures into which you have put a lot of time and effort will become invalid. You will need to go through new procedures to include the newly found legal heirs.

Omission of estates in the investigation will give rise to necessity of another round of estates division procedures for the newly found estates.

If new estates are found, a new round of procedures of estates division for the newly found estates is required.

It may take several years to complete the procedures.

Disputes over methods of valuation and amount, especially of real estates can be very contentious.
If you cannot reach an agreement, it is necessary to go through court procedures (mediation or adjudication), and it may take several years to be settled.

Wishes of decedents may not always be respected.

Even if you desire to leave a specific property to a specific person, your desire will not always be realized in procedures of estates division.

Inability to use estates until the completion of procedures

Until a property division agreement is made, or a mediation or adjudication is completed, the heirs may not be able to use or dispose of the estates. Accordingly, for example, the heirs may not be able to pay inheritance tax from the inherited estates such as the decedent's savings.
*The Civil Code has been amended to allow legal heirs to withdraw a certain amount of decedents’ savings, but the maximum amount is limited to 1.5 million yen.

Conclusion

In order to avoid these problems, it is very useful to leave a notarized will.