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Chinese inheritance law

Daxue Talks transcript #76: Chinese inheritance laws: Key issues as an expat

Chinese inheritance law

Find here Daxue Talks episode 76. In this episode, Camille Xu, partner at Yingke law firm, shares her expertise on legal concerns surrounding inheritance and wills as a foreigner in China (learn about Chinese labour laws).

Full transcript below:

According to Chinese law, if someone without a will in place passes away, who will become heir?

According to Chinese laws, there are two levels of statutory heirs – the first level would be parents, spouse and children. The second level would be brothers and sisters and grandparents. The Chinese law says when someone passes away – all the living heirs in the first level would equally share all your estate left behind. If there is no one living in the first level – for example you don’t have parents living, you don’t have spouse or children then the second level of people will be your heir. That is your brothers and sisters and your grandparents.

So let’s take an example, if you have three million renminbi left as your estate assets to your heirs and you don’t have a will and you have your mother, your wife and your daughter living – those three people will equally share the 3 million renminbi and everyone will get 1 million.

Note that in Chinese culture we sometimes believe that it’s natural to give all the money to the children or to the spouse, but people sometimes neglect that in fact the parents is also a legal heir and they have rights too. So if you don’t have a will, legally speaking if you pass away, your parents will get a major part of your estate, and maybe the parents doesn’t want your money and they are old, they don’t care, but if they don’t have legal documents neither, what will happen is that your part will get to your parents and when your parents passes away those part of assets will again get into an inheritance circle and heirs of your parents, that would be their children and probably would be the brothers and sisters of the first died person – will get involved into the inheritance issues. That’s how many inheritance disputes occur in China and so you should be aware that you need to have a will to make things clear and to avoid this kind of things happen.

Does Chinese inheritance law apply to foreigners or should foreigners follow the law of their home country?

That’s a very good question, it’s about applicable law. Many foreigners think that I’m a foreigner and Chinese laws should not apply to me, but we are talking about the case is when you pass away in China, so China would be the residence place of the law. According to the application laws the residence law would probably be the applicable law for the inheritance dispute. Another thing is that it depends on the location of the assets. First, we are talking about living in China and we’re talking about your assets in China. So, if you have bought real estate in china and for example if you have a major saving in a Chinese bank account, then it should and Chinese law will apply, because when you are dealing with those properties you are dealing with Chinese authorities and they will not look at foreign laws, they will only recognize Chinese laws, but if you are talking about your assets in foreign countries, in England, in USA – then the foreign law will apply.

What if someone already has a foreign will in place, can this person use this directly or does he/she need a Chinese will?

Actually, the foreign will is not directly recognised in China, you should remember, I’m not saying that it’s not recognised, but it’s not directly recognised. First of all – very simple question – there is a language barrier. We are talking about when you pass away – your heirs if they show a document in a foreign language, no one in China will be able to read it, so that’s the first thing.

The second thing is that this document needs to be verified – what to be verified? First of all, the Chinese authority would make sure that this document is really signed, made by the person who died – that’s the first question. Then they should make sure that those documents when people are making this will – he is not forced by anyone or deceived by anyone – he’s under a clear mind-set status to make this will. It’s very difficult, very tricky to prove that because we are talking about something that you pass away, and the third question is that as I mentioned applicable law – because when you’re doing a foreign will, normally you will follow the foreign laws, but when you are dealing with Chinese property then probably the Chinese law will apply, then it could cause the invalidity of the foreign will. So, for those reasons we do recommend that you have a Chinese will established in China, because really if you have a foreign will, there will be very, very complicated process for your heirs to realise, to recognise it in China. I’m not saying it’s not recognised, but at least it should be translated, it should be legalised in the foreign consulate and have a stamp and then the content is questionable if you are not making it with a Chinese lawyer. So, I would say the whole probate process for your heir to really get that part of asset will be delayed for years. To my experience the inheritance dispute in China would take very, very long – so if you want an easier life for your heirs, we would recommend that you do have a Chinese document established.

What issues will the Chinese court focus on when assessing the truthfulness and validity of a written will?

It should make sure that the will is really made by the right person that means the signature would be confirmed. Sometimes in China we love to put the finger print on that to make sure that it’s really made by the right person.

The second question is that the Chinese court would make sure that all the contents in the will is in line with Chinese law, that is a very tricky part because if you make something illegal, not complying with Chinese law, the will might become invalid. For example, what happens a lot is that I have an apartment under my name and I think that is my property. So in my will I write, I will give this apartment to my only son George for example, but I forgot that I bought this apartment after marriage and according to the Chinese law, any apartment bought during a marriage relationship would be a joint marital property owned equally by the couple. So, actually my husband has 50% of this apartment and in my will, I say I would like to give this apartment to my only son, so that is an invalid will because I have no right to give 100% of my apartment to my son. My husband holds 50% of it. So, that’s a part that you would like to make sure with your lawyers that all the contents are in line with the Chinese law and there is nothing illegal in that.

 That’s the second question to be checked.

The third question is that we should make sure that the will is made by a person in full capacity that means he is in clear mind, a healthy state, a health status when he’s making the will.

And the fourth question is that, the person who are making the will is not forced by anyone or deceived by anyone, that also happens a lot because if we are talking about a family relationship, when people are getting old, he/she is easily forced or deceived by some of the kids, some of the children to make a will that is not really to his willingness. So, those questions would be verified by a Chinese court.

Can a foreigner change a will?

Everybody can change their wills from time to time, because people change their mind. So according to the Chinese law I think it’s same as the laws of every country. The later will will provide the earlier will – so when you’re making a will make sure that you put on a date on the will so that we can check which one is latest will and you can even change a will from time to time but make sure that if you do a notarised will in China, you should know that – because notarisation procedure is a very complicated and official procedure that you record your will with notary public in China and it will be stamped by notary public. If you did a notarised will then this will will prevail any will of other thoughts.

For example in 2003, I made a notarised will and this year I would like to change a will but I only write on a paper, without any stamp, without anything –so in that case, according to the Chinese law, the notarised will will prevail the later will because you are doing the earlier will with a more formal way.

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