Challenging a Will in Japan: Understanding "Iryūbun" (Legally Reserved Portion) and its Enforcement

In Japan, as in many civil law jurisdictions, the principle of "freedom of testation" (遺言自由の原則 - yuigon jiyū no gensoku) allows individuals to freely dispose of their property by will (遺言 - yuigon or igon). However, this freedom is not absolute. To protect the interests of close family members who might otherwise be unfairly disinherited or left with very little, Japanese law provides for a system of "iryūbun" (遺留分), which translates to a "legally reserved portion" or "compulsory share." This system ensures that certain heirs receive a minimum guaranteed portion of the deceased's estate, regardless of the will's content.

For businesses, understanding iryūbun can be relevant when dealing with the estate of a deceased business owner, shareholder, or key individual, as it can impact the actual distribution of assets, including business interests, and potentially lead to claims against beneficiaries named in a will. This article explores the formalities of wills in Japan, the concept of iryūbun, how infringement is determined, and the modern mechanism for enforcing these reserved shares.

1. Wills in Japan – Formalities and Interpretation

A will is a formal, unilateral juristic act by which a person (the testator) dictates the disposition of their property upon their death. For a will to be valid in Japan, it must strictly adhere to the formalities prescribed by the Civil Code.

• Strict Formalities (要式性 - Yōshikisei):
  Failure to comply with these formalities can render the will, or parts of it, invalid. The most common types of wills are:
  1. Holographic Will (自筆証書遺言 - jihitsu shōsho yuigon) (Civil Code, Article 968): The testator must personally write the entire text of the will, the date of execution, and their full name, and then affix their personal seal (印鑑 - inkan). While an attached inventory of property need not be handwritten by the testator (Article 968, paragraph 2, a reform to ease drafting), the core testamentary provisions must be in the testator's own handwriting. If a crucial part, such as the identification of a beneficiary, is not handwritten (e.g., if a photocopy of a document is pasted in to identify someone, as suggested by one of the PDF's scenarios for item 200), that specific provision may be void.
  2. Notarized Will (公正証書遺言 - kōsei shōsho yuigon) (Article 969): This is prepared by a notary public based on the testator's declarations in the presence of two or more witnesses. It is generally considered the most secure form of will in terms of evidentiary value and resistance to challenges based on formal defects or testator capacity.
  3. Secret Will (秘密証書遺言 - himitsu shōsho yuigon) (Article 970): The testator writes and signs the will (or has it written), seals it in an envelope with the same seal used on the will, and then declares before a notary and two witnesses that it is their will, providing their name and address and that of the drafter if not self-written. This form is less common.
• Interpretation of Wills:
  The primary goal in interpreting a will is to ascertain the testator's true subjective intent (遺言者の真意 - yuigonsha no shin'i) at the time the will was made. Courts will consider the entire content of the will and may also look to relevant extrinsic circumstances to clarify ambiguities (Supreme Court judgment of March 18, 1983, Katei Saiban Geppō Vol. 36, No. 3, p. 143). However, this interpretative flexibility has limits; due to the strict formality requirements, extrinsic evidence cannot be used to introduce testamentary dispositions that are not expressed in the will at all, nor can it be used to correct a clear mistake in the will's wording if doing so would amount to creating a new disposition not found in the document (Supreme Court judgment of March 13, 2001, Katei Saiban Geppō Vol. 53, No. 9, p. 34).

2. "Specific Property Bequest to an Heir" (相続させる旨の遺言 - Sōzoku Saseru Mune no Igen)

A common phrasing found in Japanese wills is for the testator to state that a specific asset "is to be inherited by" (相続させる - sōzoku saseru) a particular heir. For example, "I direct that my son, Taro, shall inherit my house."

The Supreme Court judgment of April 19, 1991 (Minshū Vol. 45, No. 4, p. 477) established that such a "specific property bequest to an heir" (tokutei zaisan shōkei igen) is generally treated not as a mere bequest (izō - 遺贈, which creates an obligation on the estate to transfer), but rather as a method of estate division designated by the testator under Article 908 of the Civil Code, unless special circumstances indicate otherwise.

The practical effect is that the specified property typically passes directly to the designated heir at the moment of the testator's death by operation of law, without requiring a separate estate division agreement or formal transfer procedure for that particular asset among the heirs. However, if this designation results in the heir receiving assets valued in excess of their statutory inheritance share, they may need to register their full ownership to assert this excess portion against third parties (Civil Code, Article 899-2).

3. The Concept of "Iryūbun" – The Legally Reserved Portion

Despite the principle of freedom of testation, Japanese law seeks to protect certain close family members from complete disinheritance or grossly unfair distributions through the system of iryūbun (遺留分).

• Purpose: Iryūbun ensures that qualifying heirs receive a legally guaranteed minimum portion of the deceased's estate. It balances the testator's freedom to dispose of their property with the societal interest in providing a degree of financial security and recognizing the legitimate expectations of close family.
• Who are Iryūbun Holders (遺留分権利者 - iryūbun kenrisha)?
  The right to claim iryūbun is limited to:
  1. The surviving spouse.
  2. Children (and their descendants by representation, such as grandchildren if a child has predeceased).
  3. Direct ascendants (e.g., parents or grandparents of the deceased, but only if there are no children or other direct descendants).
     Siblings of the deceased do not have iryūbun rights (Civil Code, Article 1042, paragraph 2).
• Iryūbun Calculation Rate (遺留分率 - iryūbun-ritsu) (Article 1042):
  The total iryūbun for all entitled heirs combined is:
  • One-half (1/2) of the estate if the heirs include the spouse, children, or both.
  • One-third (1/3) of the estate if only direct ascendants (e.g., parents) are the heirs.
    This total iryūbun amount is then divided among the individual iryūbun holders according to their respective statutory inheritance shares (法定相続分 - hōtei sōzokubun). For example, if the heirs are a spouse and two children, the total iryūbun is 1/2 of the estate. The spouse's statutory share is 1/2 and each child's is 1/4. So, the spouse's iryūbun is 1/2 of 1/2 = 1/4 of the estate, and each child's iryūbun is 1/4 of 1/2 = 1/8 of the estate.
• Basis for Calculating the Iryūbun Estate (遺留分算定の基礎財産 - Iryūbun Santei no Kiso Zaisan) (Articles 1043-1045):
  The iryūbun is not calculated simply on the property owned by the deceased at the time of death. It's based on a "hypothetical estate" comprising:
  1. The value of property owned by the deceased at the time of death.
  2. PLUS the value of certain lifetime gifts (zōyo - 贈与) made by the deceased:
     • Gifts made to heirs that constitute "special benefits" (特別受益 - tokubetsu jueki, e.g., gifts for marriage, starting a business, or significant livelihood support) made within ten years prior to the commencement of inheritance (Article 1044, paragraph 3). This 10-year rule for heirs was a significant change in the 2018/2019 succession law reforms; previously, there was no such time limit for adding back special benefits to heirs (cf. Supreme Court, March 24, 1998, Minshū Vol. 52, No. 2, p. 433 which applied to the old law).
     • Gifts made to non-heirs within one year prior to the commencement of inheritance (Article 1044, paragraph 1).
     • Gifts made to anyone (heirs or non-heirs) at any time prior to death if both the donor (deceased) and the donee knew that the gift would prejudice the iryūbun rights of the entitled heirs (Article 1044, paragraph 1 proviso).
  3. MINUS the total amount of the deceased's debts.
     The valuation of assets for this calculation is generally based on their value at the time of the commencement of inheritance.

4. Infringement of Iryūbun and the Monetary Claim (Iryūbun Shingai-gaku Seikyūken)

• Shift from Abatement to a Monetary Claim (2019 Reform):
  A major reform to the iryūbun system, effective for successions commencing on or after July 1, 2019, changed the nature of the remedy for an infringed heir.
  • Old Law (pre-July 1, 2019): An heir whose iryūbun was infringed had a "right to demand abatement" (iryūbun gensai seikyūken - 遺留分減殺請求権). This was considered a real right (物権的形成権 - bukken-teki keiseiken) which, when exercised, could partially invalidate the infringing gifts or bequests in rem, often leading to complex co-ownership situations over specific assets (Supreme Court judgment of July 14, 1966, Minshū Vol. 20, No. 6, p. 1183).
  • New Law (Article 1046): The reformed law replaced this with a right to claim a monetary amount equivalent to the value of the iryūbun infringement (遺留分侵害額請求権 - iryūbun shingai-gaku seikyūken). This means the heir is now entitled to a monetary payment from those who received property in excess of what they should have, considering the iryūbun rights.
• How Infringement is Determined:
  An heir's iryūbun is infringed if the net value of the assets they are entitled to actually receive from the estate (taking into account their actual inheritance, any relevant lifetime gifts they received that are counted towards their share, and their share of the estate's debts) is less than their calculated iryūbun amount. The difference is the "amount of infringement."
• The Monetary Claim:
  The infringed heir can now claim this shortfall as a monetary sum from the parties who benefited from the infringing dispositions. This move to a purely monetary claim is intended to simplify dispute resolution by avoiding the creation of unwanted co-ownership and facilitating quicker settlements.

5. Exercising the Iryūbun Infringement Claim

• Against Whom? (Order of Liability - Article 1047):
  The monetary claim for iryūbun infringement is made against those who received benefits that infringed upon the reserved portion, in a specific order:
  1. Devisees (受遺者 - juisha, recipients of bequests) and beneficiaries of "heir-designating bequests" are liable first.
  2. If the infringement is not fully covered by them, then donees (受贈者 - juzōsha, recipients of lifetime gifts) become liable. Among donees, those who received gifts more recently are liable before those who received gifts earlier.
• If there are multiple persons liable at the same rank (e.g., multiple devisees, or multiple donees of gifts made at the same time), they are liable proportionally to the value of the benefits they respectively received.
• The liability of each devisee or donee is capped at the value of the benefit they actually received.
• Court's Discretion to Grant Grace Period for Payment (Article 1047, paragraph 5):
  Recognizing that a liable devisee or donee might need time to raise the funds, the court may, upon their request, grant a reasonable grace period for the payment of the monetary claim for iryūbun infringement.
• Time Limits for Claiming (Article 1048):
  The right to make a claim for iryūbun infringement is extinguished by prescription if not exercised:
  • Within one year from the time the iryūbun holder became aware of (a) the commencement of inheritance AND (b) the existence of the gifts or bequests that infringe their iryūbun.
  • Or, in any event, within ten years from the commencement of inheritance, regardless of the holder's awareness.

6. Waiver of Iryūbun

An heir entitled to iryūbun can waive this right.

• Waiver Before Death (Article 1049, paragraph 1): A waiver of iryūbun made before the testator's death is only effective if it receives the permission of the Family Court. This is to protect heirs from being unduly pressured into relinquishing their rights.
• Waiver After Death: After the commencement of inheritance (i.e., after the testator's death), an iryūbun holder can freely waive their right without needing court permission.

Conclusion: Balancing Testator's Intent with Family Protection

While Japanese law generally upholds a testator's freedom to dispose of their property by will, the iryūbun system serves as a crucial safeguard for the financial security and legitimate expectations of close family members. The significant 2019 reform, shifting the remedy from abatement (which could create co-ownership) to a purely monetary claim for the value of the infringement, aims to simplify and expedite the resolution of iryūbun disputes. For businesses and individuals involved in estate planning, acting as executors, or dealing with the estates of Japanese individuals, an awareness of the rules governing wills, the calculation of iryūbun, and the procedures for enforcing these legally reserved portions is essential for navigating the complexities of Japanese succession law.