What happens if you don't plan for inheritance?

We will outline the specific risks and issues that can be expected if inheritance planning is neglected.

Main risks

1. Occurrence of trouble between family and relatives (inheritance disputes)

• If the inheritance division agreement cannot be reached, it easily develops into serious conflict between siblings and relatives.

• Without a will, cases often involve disputes over statutory inheritance shares or contributions, which not uncommonly lead to deteriorating family relationships or estrangement.

2. Excessive tax burden, delinquent tax, and additional tax

• If the deadline for inheritance tax filing and payment (generally 10 months) is missed, penalties for delinquent tax and additional tax are incurred, increasing the extra burden.

• If no tax-saving measures are taken, you may also miss out on deductions or special exemptions that you are rightfully entitled to.

3. Rights and assets such as real estate and deposits are frozen, complicating procedures

• If you neglect to change the name (inheritance registration), future inheritance procedures become difficult, which can lead to unnecessary costs and trouble.

• Savings and securities accounts are also frozen, and they cannot be cashed out unless an inheritance division agreement is reached.

4. Unknowingly inheriting debts or guarantee obligations

• Without prior assessment or the procedure for renouncing inheritance, there is a risk of inheriting the decedent's debts as well (there is a 3-month deadline for filing for renunciation or qualified acceptance).

5. Risk of statute of limitations expiration or infringement of rights

• Claims for the value of the reserved portion of inheritance and recovery claims have exercise deadlines, and if neglected, you will be unable to perform a fair division of inheritance or recover your rights.

• Inheritance registration is now mandatory, and from 2024 onwards, if you do not apply within 3 years, there is a possibility of incurring penalties.

6. Losses due to vacant houses or poor real estate management

• If real estate cannot be managed, it leads to a decrease in asset value and an increase in property taxes due to designation as a specific vacant house.

Actual examples

Risk details and real-life examples
Inheritance division disputes: Siblings could not agree on the division of the estate, leading to estrangementIncreased tax burden: Late filing resulted in
delinquency taxes being imposed, significantly increasing the tax amount dueAsset freezing and procedural difficulties:
Bank account freezing made it difficult to even cover funeral expensesInherited debt:
Parental debt of 70 million yen was inherited without proper proceduresUnregistered inheritance: The death of an heir made registration documents even more complex, leading to
procedural impossibility

Summary

• If you do not plan for inheritance, significant risks such as serious disputes between family and relatives, excess tax burdens, and asset freezing and loss of rights will become reality.

• Since many procedures have deadlines, early preparation, information sharing among family members, and utilizing experts are extremely important.

Please also enjoy our past articles.