We are Murata Sogo Tax Accounting Office, with an office in Miyakojima-ku, Osaka City, specializing in inheritance tax and international taxation.
In this article, we will focus on inheritance tax considerations for single-child families in the case of multiple inheritance.

1. What is a Multiple Inheritance?

A "multiple inheritance" is a situation in which, after the death of the decedent (the person who died leaving property), an heir dies before the division of the estate is discussed. For example, when a father dies (primary inheritance) and his mother, the wife of the father, dies (secondary inheritance) before the division for property of the father is discussed, the inheritance is called a multiple inheritance because two or more successive inheritances, primary and secondary, have occurred.

2. How to Deal with Primary Inheritance in the Case of Multiple Inheritance (When There is More than One Child)

(1) Division of the Estate of the Primary Inheritance

In the example in 1, the mother had "the status to inherit the father's estate". This position will be succeeded by the mother's heirs (children), and the children will proceed with the partition of the primary inheritance on behalf of the mother.
In other words, since the heirs of the secondary inheritance will also participate in the division of the primary inheritance, the children will divide the estate among themselves, including the mother's share of inheritance.

(2) Use of Various Special Provisions

There are special exceptions to inheritance tax, such as "spousal tax reduction" , etc.," which can lower inheritance taxes.
In this case, the requirement is that the division of the estate, including the mother's inheritance share, has been completed between the childre and they can apply for these special provisions (assuming that the requirements other than the division of the estate have been met).

3. Handling of Primary Inheritance in the case of Multiple Inheritance (in the Case of an Only Child)

What we have described so far is the case of a family with several heirs to a second inheritance.
Then, what about the case of a single heir (so-called "only child" family) in the event of a secondary inheritance?

(1) Division of the Estate of the Primary Inheritance

In the case of an only child, the mother must inherit 1/2 of the legally inherited property left by the father, because, of course, a single child cannot discuss the division of the primary inheritance.

(2) Use of Various Special Provisions

In the case of an only child, special exceptions such as "spousal tax reduction" should be applied with caution.
If the mother passes away before the children and the mother have discussed the division of the primary inheritance, the "spouse's tax reduction" may no longer be applicable. It should be noted that these two exemptions may not apply if the partition agreement has not yet been finalized.

So, what should be done in the case of an only child family where the mother dies before the father's estate is divided?

Many people think that the division of the estate must not be done without a written agreement on the division of the estate, but an agreement on the division of the estate can also be done orally. Therefore, even if a written agreement on the division of the estate has not been prepared, there is no problem as long as a proper promise was made before death.
Inheritance taxes can vary from several million to several tens of millions depending on whether or not this has been handled, so when choosing a tax accountant, it is necessary to select one with a wealth of experience in inheritance taxes.

If you have any questions about inheritance tax, please feel free to contact us through our contact form.