Today, we will look at the limited approval and inheritance renunciation procedures. Inherited property that you can receive from your parents can include not only beneficial inheritance, but also debt. In fact, there are many cases in which the heir inherits only the debt to the ancestor. In this situation, heirs are advised not to inherit in any way. In this post, we will look at inheritance renunciation and limited approval that can be used when only debt is inherited.
<Contents>
1. Inheritance Priority and Waiver Procedure
2. What is limited approval?
3. When limited approval is required
4. The concept of special limited approval
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1. Inheritance Priority and Waiver Procedure
Abandoning inheritance is one way to avoid unwanted inheritance. If you become an heir, you can choose one of three methods. There are simple approval, inheritance renunciation, and limited approval. Here, simple acceptance is to receive the inherited property of the ancestor as it is. Usually, if your assets exceed your debts, you will receive a simple approval.
Type of heir choice
However, if the debts in the inherited property are greater than the profits, inheritance renunciation or limited acceptance is required. Inheritance renunciation literally means giving up inherited property. In order to clearly understand this kind of inheritance abandonment, it is necessary to know the order of inheritance.
rank of inheritance
If the decedent did not leave a will that was legally effective during his lifetime, the inherited property will be inherited in the following order:
1st priority: The heirs are spouse and children
Here, the spouse inherits with an additional 50%. For example, if you have two children, your inheritance will be divided in the ratio of 1.5:1:1.
2nd priority: Parents of the ancestor as lineal ascendant
Rank 3: Siblings
4th priority: collateral blood relative within 4th degree
※Inheritance renunciation
In case of renunciation of inheritance, all heirs in ranks 1 to 4 must renounce inheritance. If all first-order heirs give up inheritance, the inherited property will pass to the second-order heirs. If all of these two ranks give up, the inheritance goes to the third rank. If all 3 priorities are given up, the inherited property will be transferred to the 4th priorities, and only when all of the 4th priorities are given up, creditors will not be able to ask anyone to fulfill their debts.
As such, it is very complicated and inconvenient to use inheritance renunciation because of the large amount of debt in the inherited property. Therefore, in order to give up inherited property in the first priority, the limited approval system must be used.
Inheritance renunciation procedure: visit the Family Court and renounce
Deadline: Within 3 months from the date of knowing that there is inherited property
In case of abandonment of inheritance, the inherited property is transferred to the next rank.
Inheritance must be abandoned up to the 4th rank
2. What is limited approval?
In order to ensure that the deceased’s assets and debts do not pass to the next in line heirs, a limited acceptance system should be used. If the first-order heir gives qualified approval, the second-order heir does not have to do anything.
Limited acceptance means that inheritance is recognized only within the scope of the deceased person’s property. Even if there is a debt, it is a system that repays the deceased person’s property and the remaining debt cannot be claimed against the person.
Inheritance is over when you visit the family court and fill out the application form. However, limited approval adds one procedure. You must submit a list of active assets (profits) and negative assets (debts) left by the deceased to the judge of the Family Court. Based on this list, the judge approves and confirms it through a public notice to claim rights to creditors.
For limited approval, you must visit the Family Court within 3 months of inheritance and apply for it. After 3 months, it is processed as a simple approval, so the heir can inherit the debt.
The concept of limited approval
3. When limited approval is required
There are reasons to take advantage of these limited approvals. Here’s why.
If I give up inheritance, the next heir has to give up too, which is cumbersome.
I do not want to inform the second, third, and fourth heirs of the deceased’s debt size
I don’t know much about the deceased’s financial situation.
I have a property that I must inherit
Since limited approval is generally only document reviewed, if you have already received benefits, you can only pay off debts when using limited approval.
In these five cases, limited approval will be used. Recently, because the family has become nuclear, there are not many exchanges with collateral families within the fourth degree. Failure to give up inheritance can cause great damage to subordinate heirs. Therefore, if the deceased has a lot of debt, please use limited approval. Also, if you do not know the economic situation of the deceased well, it is good to receive limited approval and safely inherit it.
4. The concept of special limited approval
If the heir knew of the commencement of the inheritance of the deceased, but later found out that the deceased’s debts were greater than the deceased’s assets, the special limited approval system can be used. You must apply within 3 months from the date you found out that the deceased had more debts than assets. However, the burden of proving the special limited acceptance requirements rests with the heir.