The Succession Law of the People’s Republic of China was promulgated in 1985. As in many countries, succession law determines what happens to the decedent’s personal and real property. This article introduces some common areas where disputes may arise, and explains how such cases are adjudicated by courts. According to the PRC succession law, succession may be testate or intestate, depending on whether there is a valid will left by the decedent. If the decedent has left a valid will, the succession will be testate.
How can we determine the validity of a will? First, the will must be in line with public order and fine custom. This rule was followed by the court in a well-known case in Sichuan. The decedent made a will leaving all his assets to his unmarried sexual partner, but not to his wife. After the man’s death, his wife initiated a legal action claiming the right to inherit his assets. Finally, the court annulled the man’s will, taking the view that it was in violation of the public order and fine custom.
The will must also be in statutory form. The succession law specifies five different type of wills, namely notarial will, holograph will (a will written by the testator), allograph will (a will written by others and signed by the testator), sound-recording will and nuncupative (oral) will. For the last three types, the wills must be witnessed by two or more people, and comply with other formalities, failing which the wills may be unenforceable.
In recent years, the courts have tended to look at a testator’s true intention with greater tolerance for formality defects. Therefore, we see more and more examples of wills in non-statutory forms, such as typewritten wills or joint wills between spouses, being recognized by courts. Such a trend in judicial practice may ease the nerves of an heir who holds a will with some formality defects, however it is not always an easy argument to make, and sufficient evidence is required to convince the judge(s) that the will represents the real intention of the decedent.
One of the aims of succession law is making the decedent’s wish come true, and that is why we enforce a will (testate succession) before following the rules for intestate succession. The true wishes of testator should be protected.
According to the PRC succession law, a testator may appoint a testamentary executor for the purpose of distributing the property they own. In addition, a testator may establish a testamentary trust for a certain beneficiary. But due to the lack of specific legislation and social convention, it is rare to see such arrangement in China. As a result, there are limited precedents we can follow.
If a person dies without having made a will, or if the will is invalid, intestate succession takes place. In China, the successors first in line include spouse, children and parents. The successors second in order include brother and sister, paternal grandparents and maternal grandparents.
The successors first in line will inherit the entirety of the estate to the exclusion of the lesser-ranked successors. In other words, the successor(s) second in order shall be entitled to inherit only when there is no prior successor first in order. Where there is neither a successor first in order nor a successor second in order, the decedent’s assets shall pass to the state.
In intestate succession, disputes usually arise when two or more legitimate heirs need to distribute the decedent’s assets. Generally speaking, successors who are the same in order shall inherit in equal shares, for example, where a man and his wife have one child, and the man’s mother is living.
As China enforces a system of community property between husband and wife, when the man passes away, his wife is entitled to half of the property co-owned by the couple. Then, the remaining half shall be equally shared by the wife, the child and the decedent’s mother. This means all the assets in the man’s possession will be distributed in the following proportion: 2/3 to his wife, 1/6 to his child and 1/6 to his mother.
Exceptions are allowed where successors are incapable of working and earning a living, or are experiencing considerable financial difficulties. Successors who had made the predominant contribution in maintaining the decedent, or had lived with the decedent, may also be granted a larger share.
As a result of the family planning policy implemented for years, and the trend of fewer children, it is no longer a rare phenomenon that no successor to the decedent’s estate can be found. Unfortunately, this has not led to fewer disputes.
Disputes may arise where no heir can be found to authorise payment of debts due from the estate to creditors. Many experts have urged that the category of intestate successors be extended to avoid the occurrence of this awkward situation.
Gao Xing is a partner at Boss & Young