21 Jun 2019 by Sophie Liu

Legal Consequence of Failure to Indicate Acceptance of Legacy

Citizens may, by making a will, bequeath their personal property in part or in full to the state, a collective or persons other than the statutory successors. However, in reality, there have been cases where successors lose their rights to inherit the estate due to a failure to indicate acceptance within the stipulated time frame.

A Real Case

In March 2010, Mr Wong’s grandparents, accompanied by Mr Wong’s parents, went to the notary office and made a will to leave their property to Mr Wong. After the grandparents passed away, Mr Wong took over the notarial will from his father. Since he has always been living in the property, he did not perform any succession procedures at that time. In September 2016, as Mr Wong was planning for his marriage and would like to move to a larger house, he went to the housing bureau to execute the transfer of title of the property but was informed that it had to be done in the statutory successors’ presence and with their signature. Mr Wong then discussed the matter with his uncle and auntie, who expressed their view that because Mr Wong had not confirmed that he would accept the estate within two months after his grandparents’ death, the will had been rendered ineffective. Mr Wong hence brought his case to the court.

When Mr Wong commenced the legal action, it had already been two years after Mr Wong knew about his right to inheritance. During the material time, Mr Wong had not evinced his intention to inherit the estate, nor did he go to the corresponding departments to assert his rights. As a result, the court held that the absence of the indication of acceptance had automatically rendered the grandparents’ will ineffective and the property should be handled in accordance with the provisions of statutory succession.

Lawyer’s Comment

Mr Wong’s case demonstrates that grandchildren are not recognised by the law as statutory successors and grandparents’ will to bequeath their estate to their grandchildren is a legacy in the eyes of the law. Pursuant to the law of succession of the People’s Republic of China Article 25, “A successor who, after the opening of succession, disclaims inheritance should make known his decision before the disposition of the estate. In the absence of such indication, he is deemed to have accepted the inheritance. A legatee should, within two months from the time he learns of the legacy, make known whether he accepts or disclaims it. In the absence of such indication within the specified period, he is deemed to have disclaimed the legacy.” In short, a legatee should, within two months from the time he learns of the legacy, expressly state that he will inherit it, otherwise the absence of indication will be deemed as a declaimer of the legacy. To avoid such situation, on the one hand, testators may make clear in the will that the successor will have to indicate his acceptance within two months after the testator’s death or from the time he learns of the legacy. On the other hand, the successor should also clearly express his acceptance within the stipulated time frame. The acceptance can take place in many forms, but the most appropriate ways would be by notarization, applying directly to the housing bureau for a transfer of title or filing a lawsuit in court.

To determine the starting date of the two-month period, it is necessary to take into account a number of factors. Since succession can only take place after the decease of the testator, even if the testator has enunciated in his will his intention to leave his property to persons other than the statutory successors, the will can only take effect after the testator passes away. Therefore, even if a successor knows before the testator’s death that he is going to inherit the estate, he still cannot give the indication of acceptance at that time. Accordingly, the earliest possible time to start counting the two-month period would be the date of the testator’s death. If the successor only knows about the legacy after the testator’s death, then he should indicate his acceptance within two months from the time he learns of the legacy. If the successor does not express his acceptance or only expresses his acceptance after the two-month period, it will be deemed as a disclaimer of the legacy. In that case, the successor can no longer rely on the will to inherit the estate, and that part of the estate will be distributed among the statutory successors in accordance with the law.

Published on Hong Kong Lawyer in the June 2019 issue

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