Month: February 2023

Putting on heirs, Part 2

Posted on by catforehead

On April 27, the government will launch a new system that will allow people to “return” land they own but don’t want to the state. The main reason for this new procedure is that there has been a marked increase in recent years of land whose ownership is not clear. In 2016, a specially appointed research group found that 4.1 million hectares of land in Japan, an area larger than the island of Kyushu, had no clear titleholders. If this trend continues apace, then by 2040 there will be 7.2 million hectares of unclaimed land. The reason for the increase is that it is assumed that as more land-owners die, a good portion will not have heirs to take over that property. Unmanaged land becomes a problem for the authorities in terms of disaster prevention and general administration, which includes appropriating land for public works and other projects. 

There are many reasons why people either abandon property they own or avoid inheriting it from family or relatives. Mostly, it has to do with the cost, including property taxes, of maintaining land and structures that they will never use and can’t sell, especially if they are located in remote areas. Sometimes the property is a rental apartment building that still has a mortgage but no tenants. Sometimes it’s a parent’s home that no one wants to occupy and, again, isn’t sellable for some reason. Then there are forested tracts of land that require management by law, which can be expensive. According to a survey carried out by the land ministry in 2019, 42.3 percent of people who own land or expect to inherit land think that such ownership is a “burden.” This portion goes up when the land is either vacant or zoned for residential use. In addition, 63 percent of unused or vacant land in Japan was inherited by the current owner, a common situation given that land inheritances are taxed at a lower rate than cash inheritances. 

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Putting on heirs, Part 1

Posted on by catforehead

On Jan. 23, the Asahi Shimbun reported that in 2021, ¥64.7 billion in assets were left to no one by people who had died. In other words, these people had passed away with no heirs and no will. In the end, most of this money will go to the national treasury. The amount mentioned is 7.5 percent more than the previous year’s amount, making it the highest ever recorded, and it will likely continue increasing until sometime after the baby boom generation dies off. As it stands, heirless assets have doubled in the past ten years and sextupled in the past twenty years, coinciding directly with the sharp increase in single-person households, many of which are occupied by seniors. In 2020, there were 6.71 million single-person households whose sole member was over 64, a 40 percent increase over the number in 2010. By 2030, this number is projected to increase to 8 million. Another reason for the increase is the decline in the rate of marriage. According to the Population Research Center, 28 percent of men over the age of 50 and 18 percent of women over 50 have never married. These portions are on the rise. 

The lesson that Asahi wants readers to take away from this information is that they should draw up wills as soon as possible if they haven’t already, especially if they have no children or family to whom they can or want to leave their money and property. 

When someone dies without an heir or will, any so-called interested parties can apply to family court for resolution, and the court will then appoint an executor to manage the assets. If the executor finds someone who they think deserves a share of the assets, say a caregiver or neighbor who may have been close to the deceased, those people may inherit something, but whatever is left over goes to the state. In 2021, 27,208 executors were appointed by family courts, another record. 

In order to explain the importance of legally binding wills, Asahi presents an example of a well-off man with lots of real estate assets who died at the age of 92 in Morioka with no heirs. His funeral was carried out by the real estate company he used in his property transactions as executor per his instructions before he died, and he gave the company ¥20 million to set up a grave at a nearby temple. He also wanted to set up a foundation and a scholarship with his money. These instructions were done verbally, however, and later a court rejected this “will” because it wasn’t written down. 

The court instead appointed a lawyer to be the executor of the estate, who then acquired the keys to the man’s house and all his bank records. The money he had in financial institutions amounted to ¥492 million. The safe in his home contained ¥810 million in cash. His real estate holdings, including his own 1,500 square meter home, which was located 10 minutes by foot from the nearest station, were assessed at ¥700 million. So the total worth of the estate was more than ¥2 billion.

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