Korean Inheritance Laws and Tax: Managing Estates, Wills for Foreigners and Overseas Koreans

Inheritance issues that overseas Koreans, Korean dual citizens, and foreigners experience regarding property in Korea often involve both their country of residence as well as Korea. Thus, it is vital to understand Korea’s inheritance system in addition to that of their respective country. Especially issues revolving around real estate located in Korea are likely to be affected by Korean laws regardless of the nationality of the deceased person leaving behind the inheritance, so being aware of the Korean inheritance laws can help you avoid inheritance disputes and disadvantages.
As of 2021, there are 7.32 million overseas Koreans. 39% of them, around 2.87 million, live in the United States and Canada, and the number of inquiries from foreign nationals and overseas Koreans seeking inheritance lawyers in Korea are increasing every year.

Korean Inheritance Laws and Tax A Guide for Foreigners and Overseas Koreans

1. Which Country’s Laws Apply to Inheritance and Wills Involving Estate in Korea?

1) Overview

The Korean inheritance law defines the “decedent” as the deceased or missing person who leaves behind an inheritance, and the inheritor or heir as the person who receives an inheritance from a deceased or missing person. If the decedent (deceased) is a resident of Korea, all property inherited anywhere in the world will be subject to taxation in accordance with Korean law, whereas if the decedent is a non-resident, only inherited property in Korea is subject to taxation under Korean law. Which country’s law applies to inheritance is generally determined by the nationality of the decedent (deceased). However, if the decedent (deceased) left a valid will/testament in which he or she specifically designated another country’s law, the inheritance shall be governed by the law of that country.

The laws that may be designated through a will in Korea are:
① The law of the country where the decedent lived at the time of his/her death
② When a property is subject to inheritance, the law of the country where the respective property is located

Therefore, a will can designate the applicable law not only according to the nationality of the decedent, but also according to the law of the country where the decedent lived at the time of his/her death, as shown in the example below:

Methods of Will
Will of a Korean national residing abroad Will may designate Korean or the respective foreign country’s laws
Will of a Foreign national residing abroad Will may designate only the respective foreign country’s law
Will of a Foreign national residing in Korea Will may designate Korean or the respective foreign country’s laws


2) If the Decedent (Deceased) possesses Korean Nationality

– If a deceased Korean national lived in Korea, the inheritance and will are governed by Korean law. Therefore, regardless of whether the inheritor/heir is an overseas citizen or resident, Korean laws will still apply to the received inheritance.
– If a deceased Korean national lived abroad, or if he/she possessed Korean nationality at the time of death, Korean law applies to inheritance. However, if the decedent (deceased) has designated another country’s law in their will, for example U.S. law, that designated law applies.


3) If the Decedent (Deceased) possesses a Foreign Nationality

– Generally, if a decedent (deceased) possesses foreign nationality (e.g. American nationality), the inheritance will be carried out in accordance with local law (e.g. U.S. law). However, if a person of foreign nationality dies in Korea, Korean law can apply if Korean law was previously designated in their will.
– If a decedent of foreign nationality has property in Korea, the inheritance of the property may be carried out through a will in accordance with Korean law. When a person intends to register such inherited property in Korea, they must prove to the registry office that they are indeed the heir. Since foreign countries don’t necessarily have “family registers” like Korea, the heir must first prove that he or she is a family member of the decedent (deceased).
– Also, since there is no community property system in Korea, if a spouse wants to receive the inheritance, he/she must prove that they have the right to inherit it alone.

If you wish to leave your estate to your family members in the future, it is recommended to prepare in advance by consulting an inheritance lawyer for inheritance and estate planning and preparing a will.

2. Overview of Korean Inheritance Laws

Inheritance refers to the succession of all of the rights and obligations of the decedent (deceased) in the event of their death. If the decedent leaves a will, the will takes precedence, respecting the will of the deceased testator. If the decedent didn’t leave a will, the distribution of inheritance will be done according to the Korean rule of intestate succession as prescribed by Korean inheritance law.

1) Korean Inheritance Priority and Eligible Heirs

– The inheritance process begins upon the death of the decedent. If there are multiple eligible inheritors at the time of commencement of the inheritance, they shall inherit according to their inheritance rank. If there is at least one heir who can inherit first, a lower-ranked heir will not be able to inherit. 
– If there are two or more inheritors in the same rank, the one closest in degree of relationship receives priority. However, if both their rank as well as their degree of relationship is equal, they become co-inheritors. 
– Depending on whether you have a spouse, the order of inheritance differs as shown below.
Inheritance Priority – In case of deceased/no spouse
 Inheritor Rank Example
1st. Direct descendant of the Deceased Children, Grandchildren
2nd. Direct ascendant of the Deceased Parents, Grandparents
3rd. Siblings of the Deceased Older sibling, younger sibling
4th. Blood relatives within the 4th degree of the Deceased Uncles, aunts, nephews, nieces


Inheritance Priority – In case of existing spouse
 Inheritor Rank Example
1st. Spouse and direct descendant of the Deceased Spouse, Children, Grandchildren
2nd. Spouse and direct ascendant of the Deceased Spouse, Parents, Grandparents
3rd. Siblings of the Deceased Older sibling, younger sibling
4th. Blood relatives within the 4th degree of the Deceased Uncles, aunts, nephews, nieces


3) Inheritance Share

Inheritance share is the percentage of inheritance that applies when multiple heirs inherit together. If there are two or more inheritors sharing the same priority rank and degree of relationship, they become co-inheritors in what is called a joint inheritance. In such a case, co-inheritors will receive the same share of inheritance regardless of their citizenship, their marital status, or their age (e.g. eldest child).
However, the spouse of a decedent will receive 50% more inheritance share than direct descendants (children) or direct ascendants (parents), and if there are no direct descendants or ascendants, the spouse becomes the sole inheritor.

Example 1) If the decedent has a spouse, one son, and one daughter, the three become co-inheritors, but the spouse’s share will be 3/7, while the son and daughter each receive 2/7.
Example 2) If the decedent has no spouse, but the parents are both alive, and there are three children, each child receives 1/3. Since the children have priority over the decedent’s parents, only the children inherit.

4) Legal Reserve of Inheritance

– Korea has a system called legal reserve of inheritance. This mandatory share of inheritance is equal to 50% of the intestate succession share receivable by a lawful heir and guarantees a minimum amount of estate that each legal heir may inherit.
– Therefore, even if a prepared will states that the entire estate shall be given only to a specific child, or to only the spouse while the children shall receive nothing, or even to a non-family member, other family members who are lawful heirs are protected by Korean law and given the right to inherit their minimum share of the inheritance.
– If an inheritor refuses to return the legal reserve of inheritance to other legal heirs, it is possible to obtain that share through a lawsuit and claim a return of legal reserve of inheritance based on the inheritance right infringement.
– In the case that inheritance rights were infringed, a recovery of the legal reserve of inheritance shall be filed within one year from “when the lawful heir of the legal reserve of inheritance finds out about the death of the decedent or that they have left them an inheritance”, or regardless of whether they are aware of these facts, “within 10 years from the time of the death of the decedent”.


3. Will and Execution of Will

1) Will (Testament)

The civil law of the Republic of Korea stipulates five methods to make a legally effective will. Any will that does not comply with any of these methods is invalid, and inheritance will be carried out as if there was no will. The acceptable methods of preparing a will according to Korean Civil Law are:

Will by notarial document Will is prepared by testator in front of a notary
Will by holograph document Will is handwritten by testator
Will by secret document
Will is written by testator in secret and sealed
Will by sound recording Will is recorded orally
Will by dictation
In the case that the testator is unable to use any of the other methods, the contents of the will are declared to a witness who then writes down the will

* Two witnesses are required to make a will of the notarial deed, and a request must be made to a Korean lawyer.


2) Execution of a Will (Testament)

In the case of a will by notarial document, a separate seal procedure is not necessary. However, in the other cases, the person who carries the will must immediately take it to the court that has jurisdiction based on the residence of the testator and apply for an official seal.

4. Inheritance Tax in Korea

1) Different Regulations for Residents and Non-Residents

According to Article 2 of the Korean Inheritance Tax and Korean Gift Tax Act, the term “resident” refers to a person who has a residential address in Korea or has lived there for more than 183 days as of the commencement of inheritance, and the term “non-resident” refers to a person who is not a resident. In this case, residence is judged according to objective facts of the living relationship, such as the presence or absence of a family member who shares a livelihood in Korea or assets that are located in Korea.
In the case of commencement of inheritance due to death or disappearance, all inherited property in Korea and abroad as of the commencement date of inheritance becomes subject to taxation if the decedent is a resident, and all inherited property in Korea as of the commencement date of inheritance becomes subject to taxation if the decedent is a non-resident.
Decedent: Subject to Taxation:
All inherited property owned by the decedent in Korea and abroad as of the commencement of inheritance
All inherited property owned by the decedent in Korea as of the commencement of inheritance


 2) Inheritance Tax and Tax Deductions 

Inheritance tax is levied based on all of the decedent’s property, and the heirs must pay tax according to the inherited property. A deduction of 3% of the inheritance tax is possible if it is reported within the deadline, which is the last day of the sixth month after the decedent’s death, so it is important to act quickly. In the case that both the decedent and the heirs are non-residents, they may report the inheritance tax within nine months.
Inheritance tax is imposed under Korean law in the following cases:
– In the case of a deceased citizen of Korea
– In the case of a deceased foreign national who was a resident of Korea
– In the case of a deceased foreign national who leaves behind property in Korea
The inheritance tax rates are the same for both non-residents and residents of Korea, and the rates of taxes increase progressively based on the inheritance tax base.
Base Tax Tax Rate
Under 100 million KRW 10%
More than 100 million but less than 500 million KRW 20%
More than 500 million but less than 1 billion KRW 30%
More than 1 billion but less than 3 billion KRW 40%
More than 3 billion KRW 50%
There are also regulations regarding tax deductions. For example, if the deceased is a Korean resident, a tax deduction of up to 500 million KRW is possible, which is called a general deduction. Additionally, if the spouse of a deceased Korean resident inherits, an additional spousal deduction is provided as well. If the amount to inherit is not more than 500 million KRW, the spouse’s inheritance is tax-exempt. If the decedent is a non-resident, only 200 million KRW of tax exemption applies to the inheritance.

5. Renouncing inheritance and Reserved Renunciation

Inheritance is about inheriting debts as well as rights. Therefore, heirs might consider renouncing an inheritance or filing a reserved renunciation if the inheritable debt outweighs the assets. Heirs may investigate the details of inherited property before accepting or renouncing an inheritance (Article 1019 (2) of the Civil Act).
The heir may file a renunciation of inheritance or reserved renunciation to the Korean Family Court within three months from the date they become aware of the fact that the inheritable debt in Korea is greater than the asset that is to be inherited. To renounce or file for reserved renunciation of inheritance, a trial for renunciation of inheritance or a trial for reserved renunciation must be submitted to the court.

6. Infringement of Inheritance Rights

In the case that there is no valid will, Korean law dictates a precise order in which inheritance shall be distributed to lawful heirs, as well as the inheritance shares that they may receive. Still, there are cases where an heir takes a bigger share of inheritance than what they are entitled to by law, or where a person who is not a lawful heir takes ownership of the decedent’s estate.
These actions constitute an infringing on the inheritance rights of the legal heir or heirs. The heir or heirs whose inheritance rights were infringed can claim for recovery of inheritance through estate litigation. However, it should be noted that the lawsuit must be filed within either 3 years from the date when the person whose inheritance was infringed found out about the fact, or within 10 years from the date when the infringement took place.

7. Korean Inheritance Lawyers

Lee & Lee Law firm’s lawyers are Korean family law and inheritance experts and specialize in the fields of inheritance, trust, and family business/corporate succession involving foreigners and overseas Koreans with property in Korea. Therefore, they have extensive experience handling related procedures, and understand the difficulties experienced by heirs with foreign or dual nationality, who have lived abroad for a long time and are not familiar with the domestic laws and regulations. With this experience and expertise, our lawyers can help ensure that your inheritance process is carried out smoothly by taking on various tasks from estate management or estate disposition, to processing inheritance reports, organizing financial assets and arranging them to be transferred overseas. 
Currently, our law firm Lee & Lee provides an encompassing one-stop service which includes handling inheritance procedures, asset transactions, and corporate succession for foreign or dual nationality individuals with high-value assets, so if you have any questions about Korean inheritance laws, feel free to reach out to our lawyers.

8. Q&A

Q1. Can property inherited in Korea be registered by a resident or citizen living abroad?
A1. Yes. You can submit documents to prove that you are a legal heir (resident registration, family relationship certificate, basic certificate, adoption relation certificate). Foreign residents or citizens who have previously been registered persons or residents in Korea can obtain a family relationship certificate in the name of the decedent (deceased person). If a family relationship certificate cannot be issued, a personal registration may be issued and used instead. If a person has not been registered as a resident or in a family register in Korea, a document proving that he/she is an heir is required and must be issued and submitted according to the regulations in their respective country.

Q2. If a grandparent dies, can a grandchild inherit, passing over the previous generation?
A2. It is possible. If both the child(ren) and the spouse of the deceased, who are the first in line to inherit, have either passed away or decide to give up the inheritance, the grandchild who is the next heir may inherit the grandparent’s estate. While alive, if the grandparent writes out a will to the grandchild, provides a signed contract, or makes a contract donating the property to the grandson, the grandson can acquire the inherited property.

Q3. My parents are U.S. residents. If they passed away, in which country is the inheritance tax levied for property that they possessed in Korea?
A3. Since the property is in Korea, inheritance tax is still levied in Korea, regardless of whether the inheritor is a resident or a non-resident. Under the U.S. Inheritance Tax Act, if a U.S. citizen or resident dies, U.S. inheritance taxes apply on inherited property anywhere in the world, so even if inheritance taxes are already applied in Korea, inheritance tax will be levied in the U.S. as well.

Q4. How is the inheritance tax levied in Korea or a country abroad if a permanent resident or citizen of that country inherits from a deceased parent who is a resident of Korea?
A4. In the event of the death of a Korean resident, inheritance tax will be levied in Korea on all inherited property anywhere in the world. If inheritance tax is applied in a foreign country to inherited property located in that respective country, it is deducted as foreign tax when calculating inheritance tax in Korea in order to relieve the burden of double taxation.

Q5. If a deceased family member is believed to be in possession of property in Korea, but the details of that property are unknown, is there any way to find it out?
A5. In some cases, heirs do not know how much property (real estate, financial property) the decedent has left behind in Korea, but if there is any property that is legally registered in Korea, it is possible to find that out.

Q6. If a permanent resident or citizen of a country abroad sells a property inherited in Korea, what is the tax applied in Korea or that person’s respective country? How can I bring the sale proceeds from Korea to my country?
A6. If a non-resident in Korea transfers inherited domestic real estate, he/she must first pay capital gains tax in Korea on capital gains generated during the holding period. If you want to take out the proceeds from the sale of real estate inherited by a foreign resident or citizen abroad, you can designate a foreign exchange bank and submit an application for overseas Koreans’ property export, a real estate sales contract, and a confirmation of the proceeds of the real estate sale issued by the head of the tax office.

Q7. If I make a will in Korea, can I designate a person who is not my family to receive my inheritance?
A7. Yes, it is possible. Gay couple who recently came to our law firm were not legally family members because they were not allowed to marry under Korean law, but they wanted to write a will in advance so that they would have beneficiary rights and be able to receive the other partner’s inheritance in case of death. With the help of our Korean inheritance lawyers, they were able to write the will as they had wanted.
However, since there is a rule called “legal reserve of inheritance” in Korea, it is important to keep in mind that if the writer of the will is a Korean national, he or she is obligated to inherit parts of the estate to Korean family members that have succession rights, in addition to his or her partner.


Korean Inheritance Laws and Tax A Guide for Foreigners and Overseas Koreans



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