Leaving an orderly estate in Japan

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Please be orderly, when entering or leaving

The singer Prince left a mess by not preparing a Last Will and Testament before his departure. As a result, his estate will be managed according to statutory laws of the State of Minnesota where he resided. The result may not be as he would have wished.

The estates of foreign residents who die in Japan are also governed by local laws. To avoid statutory heirs receiving inheritance you don’t wish to give, you need a valid Will in Japan. Below is what every foreign resident needs to know about leaving an orderly estate.

Technically speaking, foreigners do not need a Japan Will, when they already have one that is valid in their native country. Japanese law recognizes the validity of a Will written under the laws of the decedent’s home country. If your Will is valid in Minnesota, it is also valid in Japan — even if written in the English language.

In practice, institutions which handle Wills are understandably uncomfortable working with unfamiliar, foreign documents. They include the courts which decide if a Will is valid or not, and the banks, brokers and land registries who are asked to transfer assets to heirs. Where documentation does not follow local custom, executors will likely face extra hurdles and burdens. Worst case, a Will could be voided by the courts.

Foreigners who choose to prepare a Japan Will have the added challenge of drafting documents that are also valid in their home country. In general, you’ll need a valid Will in all jurisdictions where assets reside. Later in this article we’ll address this complexity. But first, here are the basics:

There are many types of Japanese Wills. The three most prevalent are the Notary Deed Will, the Handwritten Will and the Secret Will. The most common form, the Notary Deed Will, is as detailed and organized as are the Japanese. In Japan, for example, people not only take off their shoes before entering a room — they also align them.

When preparing to leave, the Notary Deed Will is the most organized way to go. Producing one requires a verbal hearing before a Japan public notary in the presence of two witnesses. The validity of this Will is difficult to contest because the public notary scribes it based on the testator’s (i.e. your) expressed wishes. The notary takes great effort to prove the identities of people named in the Will. Then it is dated, signed and sealed in an envelope. The public notary keeps an original copy, so there is little chance of loss.

It is also the most expensive to produce. The public notary’s fees are based on the testator’s assets. The greater is your net worth, the greater are the fees. However, the law does not require a complete list of assets. In fact, a person can reveal only some (or none) of their assets. This, however, is not the Japanese way.

Solicitor Tetsuya Iida from the legal advisory firm, In Control Legal Support Services, recommends that clients update their Notary Deed Will every few years or when large assets are acquired. Failure to do so is “not fatal” he says, as lawyers typically include a clause to deal with assets not mentioned in the original version. But it is “advisable”.

To make a Notary Deed Will you must verbally convey your last wishes to the public notary in the Japanese language. Foreign residents who don’t speak Japanese can hire a translator to go with them to the hearing. Some notaries have casual working relationships with lawyers. In such cases, the notary may accept a written legal translation in pre-hearing discussions. Once accepted, the verbal hearing involves no more than asking (in the presence of your attorney) if the draft matches your aims. Say “Hai”, and you’re done.

The second most common Will is the Handwritten Will. Here the testator handwrites onto paper how they want their estate managed. There is no legal need for the document to be written in Japanese, although it is highly advised. Nor is it required to list personal assets, although many do. Once written, the Will is dated, signed and sealed in an envelope, which may not be opened by anyone other than the courts. It is usually stored at home in a desk drawer or placed under the family alter (butsudan).

While cheap and cheerful, the Handwritten Will may be voided by the courts. For instance, it could be deemed a forgery or thrown out on a technicality.

Timothy Langley, Representative Director of Tokyo based Langley Esquire, a legal and public affairs consultancy, believes any Will which has not been notarized by the courts is at risk of being unnecessarily voided. The Japanese courts, he says, “like to manage the entire process to extract the maximum estate taxes.” Foreigner executors and heirs, in particular, might have difficulty challenging a wrong decision made by a Japanese administrator who does not share their same interests.

The third most popular Will is the Secret Will. Like the Notary Deed Will, The Secret Will is notarized before two witnesses, but its contents remain secret. The notary accepts the Will ‘as is’, which can be written (or typed) in any language. After checking your identity, the Will is dated, signed and sealed in an envelope. It is not legally opened by anyone other than the courts. Unlike the Notary Deed Will, the notary does not keep a copy of the Secret Will. It is, however registered by the notary.

Which type is best, given the challenge of drafting a Will that is also valid in your home country? There is no one right answer.

While a single valid Will covering your global assets drafted under the laws of your home country seems simple and straightforward, the executors of your estate might have added burdens once you are gone. They must produce whatever documentation is asked to prove the foreign Will is legal in your home country, and therefore also legal in Japan. A legal translation will also likely be requested.

If you choose to go this route, consider having your foreign Will, already notarized once by a public notary from your home jurisdiction, notarized a second time by a Japan public notary. Double notarization converts a foreign Will into a Secret Will. You may posthumously be deemed in cultural contempt, but the Japan courts will also find it that much more difficult to ignore your last wishes.

Another choice is to draft two Wills, a primary one covering assets in your native country and a second subordinate Notary Deed Will which relates only to your Japan assets. The primary Will can be written in your native language and the subordinate one in Japanese. The contents of the two Wills must not conflict. The primary Will should prevail over the subordinate Japan Will, in case of contradictions. Wording should also ensure the later dated Will does not annul the earlier dated one.

Be forewarned: When you execute your Last Will, you typically extinguish all other pre-existing documents. That’s why it is called a ‘Last Will and Testament’ and not a ‘Second to Last Will and Testament’. As a result, a disgruntled heir could arguably contest the validity of the earlier dated Will.

Everyone’s situation will differ and professional advisers approach Wills differently. Be wise by consulting more than one adviser who specializes in the field, before making your final choice.

This article has been reviewed by Timothy Langley at Langley Esquire K.K. and Tetsuya Iida at In Control Legal Support Services. Mr. Langley was former General Counsel at General Motors Asia Pacific (Japan) and at Apple Computer Japan. Mr. Iida is a certified practicing solicitor.

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