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Inheritance of U.S. citizenship



In the case of U.S. citizens with Korean parents, it may be confusing how to proceed with the inheritance process when their parents pass away. In particular, it can be confusing whether to follow the laws of inheritance in Korea or the United States. In conclusion, in the case of the death of parents of Korean nationality, regardless of their children's citizenship and nationality, inheritance is carried out in accordance with the Korean inheritance law. This is because inheritance is determined by the nationality laws of the deceased. Procedures for inheriting U.S. citizenship

Let's take a look at the inheritance process for American heirs. 1) Commencement of inheritance and order of inheritance Inheritance begins with the death of one of the Korean parents. – In Korean inheritance law, the status of an heir is determined according to the order of heirs as below; 1st Priority: The deceased's child and spouse are the first heirs.

2nd Heir: Parent of the deceased

→ If there is a first-priority heir, the second-priority heir cannot be an heir. (The same applies to third- and fourth-ranked heirs.)


Identifying Inherited Property


When the inheritance process begins, heirs first figure out specifically how much inherited property there is. It is important to know exactly because the heir inherits not only deposits, real estate, and automobiles but also the inheritee's debts.

Applying for "Inheritance one-stop service" within six months of the heir's death to collectively inquire all inherited property, "Financial Transaction Inquiry Service for Heirs," and "Ancestry Land Search Service" are all methods of identifying inherited property.


To determine whether to approve or abandon an inheritance


Once you have identified the inherited property and debt, you decide whether to approve the inheritance or not.

What if the inheritee owes more than property left? The heir is liable for this debt. In this case, the only way to escape the burden of inheritance obligations is to "give up inheritance (Renunciation)" or "limit your approval (Limited Recognition)."

The inheritance obligation may be reimbursed only within the scope of the property inherited through "limited approval," or the inheritance status itself may be waived through "giving up inheritance."


Division of Inherited Property


Once the inheritance is approved, the joint heirs now go through the process of dividing the inherited property. (If there is only one heir, you will inherit the inherited property alone.) If the deceased parents left a legitimate will, the inherited property will be distributed to each heir according to the will. However, if there is no will or it is not legal, it will be subject to consultations on the division of inherited property between joint heirs or the family court's judgement on the division of inherited property.

The agreement on the division of inherited property is valid only when all heirs participate and all agree to the agreement.

As a result of the significance, a consultation on the division of inherited property must be prepared, and all joint heirs must put their seals on.

U.S. citizens can directly participate in the negotiation on the division of inherited property or appoint an agent to delegate the proceedings.

In the case of U.S. citizens, most of them do not have a Korean seal. At this time, the documents certified by the person in the United States (the signature certification document) are notarized, and the inherited property division agreement is signed and attached.

Alternatively, in the case of delegation to the agent, the agent participates in the negotiation on the division of inherited property and puts the agent's own stamp on it.


Registration of inheritance U.S. citizenship


If the inherited property received by a U.S. citizen is real estate, you need to register the inheritance at the registry office. Inheritance registration refers to the registration of the transfer of ownership of real estate due to inheritance, which indicates that the ownership of the inherited real estate has been transferred to the heir.

Of course, even if the inheritance is not registered, the heir can acquire ownership of the inherited real estate, but you must register the inheritance to dispose of the real estate. (In addition, inheritance registration is required for the payment of inheritance tax.)

There are ways for a U.S. citizen to apply for inheritance registration, such as by preparing documents directly after entering Korea or appointing an agent to proceed. In addition, U.S. citizens often do not have a Korean resident registration number, so they must obtain a registration number for real estate registration at the immigration office.


Paying Inheritance Tax for U.S. Citizens


Have you completed the process of inheritance registration in Korea? If so, you have to report and pay inheritance tax to Korea in 6 months. If all of the heirs are expats, then it’s 9 months.

Under U.S. tax law, people who receive inherited property are not required to pay taxes. The deceased person who left the inherited property owes the inheritance tax.Therefore, U.S. citizens who inherit property in Korea from their parents of Korean nationality only have to pay inheritance tax to Korea.

However, if the value of the property inherited by a U.S. citizen exceeds $100,000 a year, it must be reported to the U.S. IRS using Form 3520.


Let's wrap this up.


So far, we have learned about the procedure of inheritance when a U.S. citizen receives inherited property from his or her parents of Korean nationality.

It is not easy for a U.S. citizen to enter the Republic of Korea and directly proceed with the inheritance process for a considerable period of time or to participate in the discussion on the division of inherited property at a long distance from the U.S. Furthermore, after the inheritance is completed, the issue of managing the inherited property in Korea, paying various taxes, and taking the inherited property abroad, you can have a lot of difficulties.

Therefore, we recommend that you delegate the inheritance procedure to an agent in Korea or consult an inheritance lawyer to find the correct way.


Please send me an email for more information, jz@taxjz.com

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