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How to Handle Inheritance of Bank Accounts in Korea: A Guide for Heirs


When a loved one passes away, inheriting and dividing their assets can be both an emotional and complex process. In Korea, cash assets such as bank deposits are easier to access compared to real estate but still involve specific legal procedures. Here’s a comprehensive guide on how to handle bank account inheritance as a family member or heir.

Understanding Bank Deposits as Inheritable Assets

Bank deposits fall under the category of divisible claims (gabon-claim), meaning each heir has a rightful share based on their legal inheritance ratio. For example, if there is KRW 100 million in the deceased’s account and four heirs with equal shares, each is entitled to KRW 25 million.

General Principles of Bank Account Inheritance

  1. Automatic Division: By law, divisible claims like bank deposits are immediately divided among heirs upon the opening of the inheritance process, and they do not require a formal asset division agreement.

  2. Withdrawing Funds: Heirs can individually request their share of the funds by proving their inheritance rights to the bank.

Documents Needed for Withdrawal

When all heirs are present at the bank, they must provide:

  • Valid ID (passport or Korean ID for citizens).

  • Family relationship certificate of the deceased.

  • Basic certificate of the deceased.

If only some heirs visit the bank, additional documents are required:

  • Inheritance Division Agreement: Signed by all heirs, along with notarized signature certificates (seal certificates).

  • Inheritance Waiver Decision: If any heir has formally waived their inheritance rights, the waiver decision must be submitted.

Challenges in Withdrawing Funds

Banks are cautious to avoid duplicate payments and legal disputes. If other heirs do not cooperate, the process can become more complicated. In such cases, the following options are available:

  1. For Small Amounts (< KRW 1 million): Some banks allow partial withdrawals without full cooperation from all heirs.

  2. Legal Action: Heirs can file a claim for deposit return against the bank. If the court confirms there are no risks, the bank will release the funds.

Inheritance Division and Exceptional Cases

While bank deposits are divisible claims by nature, there are exceptions:

  • Unfair Distribution: If dividing the funds equally seems unfair (e.g., due to prior financial contributions by one heir or significant gifts received by another), the deposits may be included in a court-supervised inheritance division process.

  • Inheritance Division Judgment: Heirs can request a family court to determine how assets, including deposits, should be distributed based on contributions, prior gifts, and fairness.

Using Bank Deposits for Tax Payments

Cash assets like bank deposits are often used to pay inheritance taxes. To avoid penalties, heirs are encouraged to prioritize tax payments during the division process.

  • Heirs may agree to exclude deposits from the division and allocate them for tax payments.

  • If an agreement is not reached, one heir can pay the taxes upfront and later claim reimbursement from the others.

Special Cases: Bonds, Stocks, and Cryptocurrencies

Like bank deposits, bonds and stocks are also divisible claims. Heirs can request:

  • Transfer of Ownership: Request the issuer to transfer bonds or stocks to their names.

  • Stockholder Name Changes: Request the company to update the shareholder registry.

Cryptocurrencies and other digital assets may also be included in the inheritance division, but they are handled similarly to other divisible claims.

Conclusion

Handling the inheritance of bank accounts and other divisible assets involves navigating legal procedures, cooperating with heirs, and managing tax obligations. Proper documentation and, when needed, legal guidance can help streamline the process. Families should prioritize fairness and compliance to avoid disputes and ensure a smooth transition of assets.


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