Previous precedent regarding inherited deposits
The Supreme Court held that divisible claims, such as monetary claims, are naturally divided according to the inheritance share upon commencement of inheritance and are not subject to division of the estate (Supreme Court Petty Bench Judgment April 8, 1954). (Supreme Court Petty Bench Judgment, April 20, 2004). Bank deposits were also considered to be divisible as divisible claims and not subject to division of the estate (Supreme Court Petty Bench Judgment, April 20, 2004). As a result, each heir could pay out his or her share of the inheritance even before the division of the estate.
Supreme Court decision of December 19, 2016
The Supreme Court’s December 19, 2016 decision changed the previous precedent and ruled that “jointly inherited ordinary deposit receivable, ordinary savings receivable, and fixed-term savings receivable are not naturally divided according to the inheritance share upon the commencement of inheritance, but are subject to division of the estate.
Disbursement of bank deposits
As a result of the above, after the decedent’s death, the decedent’s bank deposits become the joint property of the heirs until an agreement on the division of property is reached, and one heir cannot withdraw the bank deposits without the consent of the other heirs. When the bank finds out that the owner of the deposit has passed away, the bank will freeze the bank account and will not accept any withdrawal until the designated documents, such as an inheritance division agreement, are submitted. However, since the bank cannot know the death of the deposit holder without a request from the heir, it is possible that the bank will accept a request for withdrawal from the heir. In addition, if the bank becomes aware of the death of the depositor and makes a disbursement using the cash card before freezing the deposit, the disbursement will be made as it is. In this case, the other heirs would have a claim for damages in tort against the heir who made the withdrawal, since this would constitute an infringement on their inheritance.
Refund system for inherited deposits before the division of the estate
If a bank account in the name of an heir is frozen upon the death of the heir, the heir may face difficulties in meeting immediate living expenses or may not be able to pay the funeral expenses of the decedent. Therefore, the Civil Code has been amended to allow refunds up to a certain extent (Article 909-2 of the Civil Code). This law has been in effect since July 1, 2019.
Under Article 909-2 of the Civil Code, “each joint heir may reimburse independently the amount equal to one-third of the amount of the deposit and savings claims belonging to the estate at the time of commencement of inheritance multiplied by the legal inheritance share of the heir who is to reimburse the claim. However, the upper limit is set at 1.5 million yen in accordance with a Ministry of Justice ordinance. If there are deposits in more than one bank, this formula will be applied to the deposits in each bank.
For example, if the decedent’s bank deposit balance is 6 million yen and the refund is made at Bank A, and the heir’s legal share of inheritance is 1/2, the maximum amount of refund would be calculated as follows
6 million yen x 1/3 x 1/2 = 1 million yen
Similarly, in the case of a refund at Bank B, where the decedent’s bank deposit balance is 12 million yen, if the heir’s legal share of inheritance is 1/2, the maximum amount of refund would be as follows
12 million yen x 1/3 x 1/2 = 2 million yen (however, the upper limit of 1.5 million yen is set by the Ministry of Justice Ordinance)
Refund system by decision of family court
The above is a system that allows a person to request a financial institution to refund a deposit without a decision by the family court according to the provisions of the revised Civil Code. Along with this, a system has also been introduced that allows a person to refund a bank deposit with a trial by the family court (Article 200, Paragraph 3 of the Family Affairs Case Procedures Law). This is done as a temporary restraining order with the conciliation or trial for the partition of the estate as the main proceedings. When a conciliation or trial for division of the estate has been filed, a petition is filed to the family court by each heir, and all or part of the inheritance deposit can be refunded by a trial by the court. However, the family court may make a decision in consideration of the payment of debts belonging to the inheritance, the payment of living expenses of the heirs, and other circumstances, and the decision may not prejudice the interests of the other co-heirs. Under this system (temporary restraining order), unlike the Civil Code, there is no maximum amount set, and any amount can be spent within the discretion of the court. On the other hand, in order to use this system of provisional payment, it is necessary to file a petition for mediation or trial for partition of the estate.