When a daughter-in-law receives a portion of assets as a gift from her parents-in-law before her husband’s death, how should those previously gifted assets be reflected when calculating the statutory reserved portion (yuryubun) among the husband’s siblings, who are joint heirs, after the parents-in-law pass away? The court ruled that if these assets can be considered no different from assets gifted by the parents-in-law to the husband, the gifted assets can be regarded as the husband’s “special benefit.”
The Civil Division 24 of the Seoul High Court (Presiding Judge Kim Si-cheol, Judges Kim Ok-gon and Lee Dong-hyun) dismissed the appeal filed by daughter-in-law A and her children against B, the husband’s brother, in a statutory reserved portion return claim lawsuit (2023Na2030285), ruling in favor of the defendant. Neither party appealed this decision, so it became final as is.
A’s parents-in-law gifted her cash amounting to approximately 378 million KRW and real estate shares valued at about 639 million KRW in February and December 2014. A’s husband, C, who was battling terminal cholangiocarcinoma, passed away in February 2016, and subsequently, A’s parents-in-law died in December 2018. As C’s heirs, A and her children became substitute heirs (when a direct descendant or sibling who would be an heir dies or is disqualified before inheritance begins, their direct descendants or spouse take their place) and inherited the parents-in-law’s assets. During this process, A and her children filed a lawsuit against C’s brother B, claiming their statutory reserved portion was infringed upon.
The trial focused on whether △ the gifts from the parents-in-law to A before the occurrence of the substitution cause (C’s death) could be considered C’s special benefit, and △ whether C’s special benefit could be regarded as a special benefit of A and others in this case.
The court ruled that the mere fact that A received gifts from the parents-in-law before the substitution cause (C’s death) does not automatically qualify as a special benefit. However, if it is recognized that the gift to the daughter-in-law is effectively no different from a gift to the son C, it can be considered a special benefit.
The first trial court stated, “C, who was diagnosed with terminal cholangiocarcinoma, required various surgery and treatment costs, and the parents of C gifted A with the intention of providing economic support. If the assets were gifted directly to C, there could be inheritance tax issues upon C’s death, so it is highly likely that the gift was made to A.”
The appellate court reached the same conclusion.
The court stated, “If it is recognized that the decedent (parents-in-law) made a gift directly to the substitute heir who holds the status of the spouse (daughter-in-law A) or direct descendant of the decedent before the occurrence of the substitution cause (C’s death), and this is substantially no different from a gift to the decedent (the son of the parents-in-law and A’s husband, C), then gifts to the substitute heir who is the direct descendant or spouse of the decedent can be considered as an advance on the decedent’s inheritance share and treated as special benefits.”
Considering these circumstances and calculating the inheritance shares, the court found that there was no shortage in the statutory reserved portion for A and others.
Han Su-hyun, Legal News Reporter
※This article is based on content supplied by Law Times.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
