Accessing Bank Accounts After Death in Japan: How Has the New Law Changed the Rules for Withdrawing Deposits Before Estate Division is Finalized?

Japanese Attorney at Law - Bengoshi L.L.

• 7 min read

When an individual passes away in Japan, their bank accounts are typically frozen by financial institutions upon notification of death. While this is a measure to protect the deceased's assets until inheritance is formally settled, it has historically created significant practical difficulties for heirs needing immediate access to funds for urgent expenses such as funeral costs, outstanding medical bills, or the living expenses of dependent family members. The traditional process of estate division (遺産分割 - isan bunkatsu) could be lengthy, leaving heirs in a precarious financial position.

A pivotal Supreme Court decision on December 19, 2016 (Heisei 28.12.19, Minshu 70-8-2121) clarified that bank deposits are not automatically divided among heirs according to their statutory shares upon death. Instead, they form part of the overall estate that must be formally divided among all co-heirs. This ruling, while legally clarifying the nature of deposits in an estate, further underscored the need for mechanisms to allow heirs to access necessary funds before the final division.

In response, Japan's Civil Code and related procedural laws were reformed, with key provisions effective from July 1, 2019, to address these liquidity challenges. These reforms introduced two main avenues for heirs to partially access the deceased's bank deposits and savings (預貯金債権 - yochokin saiken) before the estate division is finalized: an out-of-court system for limited withdrawals and a court-supervised procedure for more substantial provisional access.

Part 1: Partial Withdrawals Without a Court Order (Civil Code Article 909-2)

The revised Civil Code introduced Article 909-2, creating a new system that allows individual co-heirs to unilaterally withdraw a limited portion of the deceased's bank deposits without needing the consent of other heirs or a court order.

Purpose and Scope:
The primary aim of this provision is to provide a quick and straightforward way for heirs to access a modest amount of funds to cover immediate, essential expenses. This right is available to any legal co-heir.

Calculating the Withdrawable Amount:
The amount an individual heir can withdraw under this system is subject to two main limitations:

  1. Per Deposit Account Calculation: For each specific deposit account held by the deceased, an heir can withdraw an amount calculated as:
    (Balance of that account at the time of inheritance) × (1/3) × (The claiming heir's statutory inheritance proportion - 法定相続分, hōtei sōzokubun)For example, if the deceased had a bank account with a balance of 9 million yen, and there are two children (each with a statutory inheritance proportion of 1/2), each child could potentially withdraw: 9,000,000 JPY × (1/3) × (1/2) = 1,500,000 JPY from that specific account under this part of the calculation.
  2. Cap Per Financial Institution: Regardless of the amount calculated above, there is an overarching cap on the total amount an individual heir can withdraw under Article 909-2 from any single financial institution (e.g., one bank, even if the deceased held multiple accounts there). This cap is set by a Ministry of Justice ordinance and currently stands at 1.5 million yen per heir, per financial institution.

The final withdrawable amount is the lesser of the amount derived from the per-account calculation (summed across all accounts at that institution, if applicable to the 1/3 formula) and the 1.5 million yen cap for that institution. If the deceased had accounts at multiple, different financial institutions, this calculation and cap apply separately to each institution.

Procedure for Withdrawal:
To make a withdrawal under Article 909-2, the heir typically needs to approach the financial institution directly and provide:

  • Proof of the accountholder's death (e.g., a copy of the family register showing death).
  • Documents proving their status as an heir and their statutory inheritance proportion (usually requiring comprehensive family register excerpts - 戸籍謄本, koseki tōhon).
  • Personal identification of the claiming heir.

Financial institutions are generally not required to investigate the purpose of the withdrawal. This is intended to simplify and expedite the process for heirs needing immediate funds. The institution's main role is to verify heirship and ensure the withdrawal limits are respected.

Treatment of the Withdrawn Amount:
A crucial aspect of Article 909-2 is how these withdrawals are treated in the broader context of inheritance. The latter part of the article stipulates that any amount withdrawn by an heir under this provision is considered to have been received by that heir as a partial distribution of their share of the estate. This means the withdrawn sum will be treated as an advance on their inheritance and will be accounted for during the final estate division to ensure fairness among all co-heirs. It is not "extra" money; it's an early receipt of part of their entitlement.

This system came into effect on July 1, 2019, and applies to inheritances that commenced both before and after this date, as long as the withdrawal itself is made on or after this date.

Part 2: Court-Ordered Provisional Access to Deposits (Code of Civil Procedure for Family Affairs Article 200(3))

For situations where the amounts accessible under Civil Code Article 909-2 are insufficient to meet more substantial needs, or where a more tailored provisional distribution is required, the reforms also enhanced the Family Court's powers. A new paragraph (3) was added to Article 200 of the Code of Civil Procedure for Family Affairs (家事事件手続法 - Kaji Jiken Tetsuzuki Hō), specifically addressing provisional access to estate bank deposits.

Purpose and Context:
This provision allows the Family Court, in the context of an ongoing estate division case (either mediation - 調停, chōtei, or adjudication - 審判, shinpan), to issue a provisional order (保全処分 - hozen shobun) granting an heir temporary access to specific estate deposits. This is intended for more significant needs than the relatively small sums covered by Article 909-2.

Requirements for a Court Order:

  1. Pending Estate Division Case: An estate division mediation or adjudication case concerning the deceased's estate must already be pending before the Family Court. This provisional measure cannot be sought independently of such proceedings.
  2. Application by a Party: The request for provisional access must be made by an heir who is a party (applicant or respondent) to the pending estate division case.
  3. Demonstrated Necessity: The applicant must demonstrate to the court a genuine and pressing need to use funds from specific estate deposits. Article 200(3) provides examples of such necessities:
    • Payment of debts of the deceased that are chargeable to the estate.
    • Covering the living expenses of an heir who was financially dependent on the deceased.
    • Payment of funeral expenses.
    • Payment of inheritance taxes.
    • Other urgent matters related to the preservation or administration of the estate, or the immediate welfare of heirs.
  4. No Harm to Other Co-Heirs' Interests: This is a critical safeguard. The court can only grant the provisional acquisition if it determines that doing so will not prejudice the legitimate interests of the other co-heirs in the final estate division. This involves the court considering:
    • The applicant's likely final share of the estate (taking into account statutory shares, the will if any, special benefits, and contributions).
    • The total value and nature of the estate assets.
    • The financial situations and needs of all co-heirs.
      Generally, provisional access is more likely to be granted if the requested amount is well within the applicant's anticipated final share, or if arrangements can be made to ensure an equitable adjustment in the final settlement.

Nature of the Court Order:
If the court finds the conditions are met, it can order that a specific estate deposit account, or a portion thereof, be "provisionally acquired" (仮に取得させる - kari ni shutoku saseru) by the applicant heir. This allows that heir to withdraw the specified funds.

Relationship with Final Estate Division:
Amounts received through such a court order are considered a provisional distribution. They are typically treated as an advance on the heir's ultimate share of the estate and will be factored into the calculations for the final estate division agreement or judgment. The provisional order does not definitively determine any heir's final share of the overall estate.

Interplay and Practical Implications of the Two Systems

The two mechanisms for accessing funds before final estate division are designed to be complementary:

  • Civil Code Article 909-2 offers a non-judicial, rapid route for heirs to obtain relatively small sums for immediate outgoings, based on a clear formula and subject to a statutory cap per financial institution. Its key advantages are speed and simplicity, as no court involvement is needed.
  • Family Affairs Procedure Law Article 200(3) provides a court-supervised avenue for accessing potentially larger sums from estate deposits when there are demonstrated, significant needs and an estate division case is already in progress. This route allows for a more tailored assessment of needs and the overall estate situation by the Family Court.

It is possible for an heir to utilize the Article 909-2 system first for immediate cash and then, if further substantial funds are required and an estate division case is initiated, apply to the Family Court under Article 200(3).

Responsibilities of Financial Institutions:
Under Article 909-2, financial institutions are expected to process requests based on the documentation provided by the heir verifying their status and the statutory limits. They are not tasked with investigating the heir's purpose for the funds or the broader family financial dynamics beyond ensuring the formal requirements of the law are met. If an heir has already made withdrawals (e.g., by not initially disclosing the death to the bank) and then attempts to use Article 909-2, the financial institution's obligation is generally to apply the 909-2 rules to the remaining balance, though complex situations involving prior undisclosed withdrawals could raise issues of good faith or abuse of rights by the heir.

Considerations for Heirs:

  • Documentation: Heirs should be prepared to gather comprehensive documentation (family registers, proof of death, personal ID) to support their claims under either system.
  • Calculation Limits: Understanding the precise calculation method and the 1.5 million yen per-institution cap for Article 909-2 is crucial.
  • Nature as an Advance: It is vital for heirs to remember that any funds received through these provisional mechanisms are advances on their final inheritance share and will be reconciled during the formal estate division. This prevents misunderstandings about the final distribution of assets.
  • Communication with Co-Heirs: While Article 909-2 allows unilateral withdrawal, open communication with co-heirs about intended withdrawals can help maintain smoother family relations, even though it's not legally required for this specific provision. For court-ordered access, other heirs will be part of the proceedings.

Conclusion

The reforms enabling partial access to a deceased's bank deposits before the finalization of estate division represent a significant practical improvement in Japanese inheritance law. They address a long-standing issue that often caused considerable hardship for bereaved families needing immediate funds. By providing both a straightforward, non-judicial mechanism for limited withdrawals (Civil Code Art. 909-2) and a court-supervised process for more substantial provisional access (Family Affairs Procedure Law Art. 200(3)), the law now offers a more balanced approach. It acknowledges the immediate financial needs of heirs while still upholding the principle that bank deposits are part of the overall estate to be divided fairly among all entitled successors. These changes contribute to a more humane and efficient handling of financial matters in the difficult period following a death.