[Life Chapter 3 Business] "We Safely Store and Execute Your Will"... Hana Bank Pioneers New Business in the Super-Aging Era

Interview with Lee Jae-cheol, Vice President of Hana Bank Trust Business Division

Executive Vice President Lee Jae-cheol has led the Trust Business Headquarters since 2022, after serving as the Head of the Asset Management Business Support Department and the Trust Section Manager at Hana Bank in 2020. He was promoted to Executive Vice President last year. Photo by Hana Bank

"Some people come here without any appointment just after hearing about the opening of the Estate Settlement Center. Given the high demand, we plan to make this space a place that regularly hosts the 'New Senior Forum' every month, offering experiences in will writing and education on inheritance-related legal and tax matters for our customers. We named it the 'Senior Lounge,' and we hope it serves as a lounge where anyone can feel comfortable visiting."

When the reporter visited the 4th floor of the Place One Building in Gangnam-gu, Seoul, on the 3rd, the interior was decorated in soothing brown tones. Gentle and relaxing classical music played as background throughout the entire floor. This place, which gives the impression of a space where senior customers can comfortably rest, is the 'Hana Senior Lounge' opened by Hana Bank last month.

Hana Bank launched the Hana Senior Lounge last month to provide consulting and execution services related to asset management, gifting, inheritance, donations, and pensions in preparation for the super-aged society. It also became the first financial institution to implement the 'Estate Settlement Service.' This service is handled by the Living Trust Center, which launched the substitute will trust 14 years ago. The Living Trust Center offers comprehensive asset management services based on trusts, covering inheritance planning, asset management, and posthumous inheritance execution.

Lee Jae-cheol, Vice President of Hana Bank’s Trust Business Division and Head of the Hana Senior Lounge Center, said, "Customer demand for inheritance services seems higher than expected. Since the service started, we have begun consultations and have customers preparing to sign contracts. Inquiries and consultations about will storage and execution are also increasing."

The history of trusts between Korea and Hana Bank, arranged on one side of the Hana Senior Lounge. Photo by Hana Bank

- What prompted the bank to plan the launch of the Estate Settlement Service?

▲ As the elderly population increases, the number of inheritance cases is also rising. The possibility of disputes among bereaved families is growing as well. With societal changes, family structures are diversifying, and more family members live overseas, making it necessary to have a professional inheritance center to facilitate smooth asset succession. In Japan, inheritance-related services began to grow rapidly when the elderly population reached 15% of the total. Currently, South Korea’s elderly population is 18%, and since it has the fastest aging rate in the world, we see a clear market need.

The Living Trust Center has been providing comprehensive inheritance solutions based on trusts. With 14 years of accumulated experience, it has more know-how in inheritance execution than any other financial institution. Our unique advantage is that we can offer complete inheritance consulting by combining trusts and wills tailored to customers’ needs for asset management and protection during their lifetime, as well as inheritance and donations according to their wishes.

- What specific services can customers receive?

▲ First, we safely store notarized wills written by customers in the bank’s vault and also act as the executor of the will. As a third-party bank, we can objectively execute the inheritance. Additionally, if the deceased did not leave a substitute will trust or a will, we provide estate settlement services that minimize disputes among heirs by managing the disposition of real estate and other inherited assets. While traditional trust services focused on the deceased, the estate settlement service also covers the needs of heirs.

- Is it really necessary to entrust the will to the bank for safekeeping?

▲ If a will is disclosed prematurely, it can cause disputes among family members. Therefore, many deceased individuals keep their wills in places where no one else can see them. However, this can result in heirs never seeing the will, or the will being found before the deceased intended, leading heirs to destroy it if they believe it is disadvantageous to their inheritance.

That is why will safekeeping is important. The bank securely holds the will containing the deceased’s wishes and, upon inheritance, objectively executes the will according to those wishes for the heirs.

The Hana Senior Lounge, located in the Place One Building in Gangnam-gu, Seoul, has five consultation rooms for clients. Photo by Hana Bank

- The elderly in Korea hold a large proportion of real estate assets, which likely constitute a significant part of the inheritance estate.

▲ That’s correct. Real estate accounts for a large portion of inheritance assets in Korea. This often leads to inheritance tax burdens and issues related to acquisition and registration taxes on real estate. Moreover, heirs living overseas usually prefer to sell the inherited real estate and distribute the proceeds in cash rather than keep the property.

However, the process of selling commercial properties and land is complex, and disagreements among heirs can arise. If some heirs are overseas, obtaining their consent can take considerable time. In such cases, the bank can, with the heirs’ authorization, sell the real estate, deduct the applicable taxes, and distribute the remaining cash as inheritance assets.

- You mentioned collaboration with Japan’s Mitsui Sumitomo Trust Group (Sumitrust). How does this partnership work?

▲ In Japan, financial institutions have been storing wills and acting as executors for over 30 years. Sumitrust, specializing in trusts, is a leading trust bank in Japan’s inheritance market.

We have adopted Japan’s 30 years of accumulated know-how and tailored the service to fit Korea’s circumstances. To this end, Living Trust Center staff visit Sumitrust, and Sumitrust employees visit Korea, sharing expertise on trusts and estate settlement services.

- This service integrates finance, law, tax, and real estate expertise. While it offers the advantage of a one-stop solution, can it also be said that you have secured expertise in each field?

▲ Since we have been providing substitute will trust services for 14 years, the Living Trust Center staff have considerable experience and expertise. However, as the market evolves rapidly, our staff regularly study new issues as they arise.

For example, last week there was a new Constitutional Court ruling on statutory reserved portions (the system that forces inheritance of a certain minimum share to siblings regardless of the deceased’s wishes was ruled unconstitutional). There are also new issues related to insurance claims entering trust assets.

We continuously monitor and analyze changes in rulings and cases related to inheritance. We discuss and study anticipated problems together. Furthermore, we have agreements with law firms, tax firms, and notary law firms, so customers can receive various specialized inheritance services by visiting only the Living Trust Center, which will serve as a platform.