In this paper, I reviewed several issues related to the seperation of inherited property by comparing the Meiji Civil Code with the current Korean Civil Code. The separation of inherited property is a system whereby the inherited assets of the decease...
In this paper, I reviewed several issues related to the seperation of inherited property by comparing the Meiji Civil Code with the current Korean Civil Code. The separation of inherited property is a system whereby the inherited assets of the deceased (the decedent) are kept separate from the heir’s individual property, allowing creditors of the inheritance to be repaid from the inherited assets and creditors of the heir to receive repayment from the heir’s individual property. When asset separation occurs, three main legal effects arise: (1) separation of inherited property from individual property (effect of asset separation), (2) priority repayment rights granted to creditors of the inheritance concerning inherited assets and to creditors of the heir concerning the heir’s individual property (effect of priority repayment), and (3) prohibition of the disposal of inherited property (effect of disposal prohibition). However, there is no provision in the Korean Civil Code that grants inheritance creditors the legal effect of priority repayment from the inherited property over the heir’s creditors. In the current Korean Civil Code, asset separation is designed to function in clearing inherited assets, not as a system intended to address any unforeseen liquidation of heir’s individual assets. Clarifying the priority between inheritance creditors and the heir’s creditors competing over the inherited property is more important than setting priorities for heir’s individual assets, which is an area in need of legislative improvement.
Additionally, this paper explores issues such as the legal basis for prohibiting the disposal of inherited property, the nature of the priority rights enjoyed by inheritance creditors and the heir’s creditors, whether it is appropriate to deny the legal effect of confusion due to claims of asset separation by inheritance creditors, and the rationale and practical benefits of limiting the claim period for asset separation, with a particular focus on discussions from the drafting process of the Meiji Civil Code. The theoretical and doctrinal foundations of the Korean Civil Code’s system of inherited property separation are not yet fully established. Discussions from the drafting of the Meiji Civil Code may serve as valuable reference material in understanding the Korean Civil Code and considering its future direction.
The legal effect of asset separation, which segregates assets belonging to the debtor into separate individual assets, occurs not only in inheritance but also in cases of creditor avoidance or trusts. If the theory and legal doctrine surrounding the separation of inherited property are refined, it could be utilized in various situations involving asset separation.