2-5 What if you inherit debt?

In Japan, debt can be inherited.

Receiving letters from tax authorities or loan companies that claim you are the heir of a deceased distant or estranged relative and have inherited their debts is not uncommon.

If you ever find yourself in this position, fast action must be taken.

A three month period is granted from the date of being informed of the inherited debt to confirm to the creditors that you are renouncing the inheritance, (Civil Code Article 915).

To renounce the inheritance, the"Statement of Renunciation of Inheritance(souzoku-houki-shinjutsu-syo)" document must be filed at the Family Court, (Article 938).

Failure to do so will result in the automatic inheritance of the rights and duties of the deceased without limitation, (Article 920,921).

Attention should also be paid to the provisions of Article 921 of the Civil Code.

Making a disposition in relation to the inherited property is deemed to be an unconditional acceptance of inherited debt.

This means that the inheritance cannot then be renounced.

The term "disposition" broadly refers to certain acts, such as selecting valuable items from the decedent's belongings and taking them home, paying off their debts, collecting debts, or changing the transfer destination of monies into your bank account.

Therefore, if you are thinking of renouncing your inheritance, you should refrain from any of the above actions.

In other words, you should not behave as an heir.