Legal Reserve of Korean Inheritance for U.S. Citizens and other Expats with Estates in Korea

It is common for IPG Legal to handle matters where individuals born in Korea acquire U.S. citizenship and renounce their Korean nationality while still owning property in Korea and also matters where an expat passes with assets in Korea.

When such U.S. citizen passes with assets in Korea, a key question arises: Can the heirs claim their legal reserve of inheritance?  In other words, which law—U.S. or Korean—should govern the inheritance of their Korean assets?

Governing Law and Inheritance

The answer to this question hinges on the applicable governing law. U.S. inheritance laws differ from Korean laws, particularly regarding the concept of “legal reserve of inheritance” (유류분).  Most U.S. states, including New York, do not recognize such a system, whereas Korea does. Limited exceptions exist for spouses in U.S. States. For instance, if a U.S. citizen leaves a will bequeathing all their Korean property to one child, other heirs can claim their legal reserve of inheritance only if Korean law applies.

Under Korean private international law, inheritance is generally governed by the law of the deceased’s nationality at the time of death (Article 77(1) of the Private International Law). Thus, if the deceased is a U.S. citizen, U.S. law (law of the State of residency) typically governs the inheritance. However, according to the general principles of U.S. private international law outlined in the Restatement (Second) of Conflict of Laws, the law of the property’s location governs real estate inheritance in cases without a will (§236), and the same law applies to the disposition of real estate under a will (§239).

As a result, even though U.S. law typically governs the inheritance of a U.S. citizen, if that citizen owns property in Korea, the principles of the Restatement of Conflicts of Laws would direct the application of Korean law to the inheritance of that property. Consequently, heirs who did not receive a bequest may claim their legal reserve of inheritance under Korean law.

International Jurisdiction

If an heir wishes to assert their legal reserve of inheritance under Korean law, they can file their claim in a Korean court, where the property is located. This matter pertains to “international jurisdiction,” which determines which country’s courts will hear the case.  While the governing law establishes which laws apply, international jurisdiction dictates the appropriate venue for legal proceedings.

Please see: Korean Inheritance, Korean Inheritance Q & A and Korean Inheritance Tax for general articles on Korean Inheritance Law and Korean Inheritance Tax Law.

by Minyeoung Park
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