Background: permanent resident, 2 non-Japanese parents living abroad
My parents are both in their late 60s, so while not a pleasant topic to discuss we agreed it’s time to draw a succession plan taking into account Japanese inheritance laws.
There’s a few points I need to clarify to them so that they can take the necessary steps. Hopefully the collective knowledge in this sub can shed light on all of them. Apologies for the wall of text 🙂
1. Right ownership structure for current assets
A few years ago, both I and my father put some of our cash savings in bonds, say he invested an amount X and I invested an amount Y. The securities are in an account in my name and which we both have access to, under the clear agreement that we are not to touch each other’s share as long as we are both alive. His will is for me to take full control of X when he passes away.
Had I read the info here at the time I’d have realized this wasn’t a smart allocation as (1) it makes it look like he gifted X to me even though we have an agreement to the contrary (2) being a PR, I am taxable for interests received on all my accounts anywhere, so declaring those again makes it look like I own the assets.
The situation is similar to the one analyzed by u/starkimpossibility in this post (a bit simpler actually since it’s just a single asset, but the “example story” in the answer there pretty much fits).
I am aware that ambiguous ownership cannot be disambiguated with 100% certainty. But again based on the linked post, would I be correct in thinking the best course of action to sort this out would be (1) moving X and Y in separate accounts to reflect actual asset ownership (2) documenting in detail the flow of assets in time as well as our agreement on it? Fortunately I have kept record of everything, so this should be easy to formalize in writing as long as we are both alive, and there are 2 more immediate family members who can attest and will hopefully outlive my parent.
2. Inheritance under the exemption threshold
When the first parent passes away, we plan to make use as much as possible of the inheritance exemption given that it can be applied again later for the second parent.
Suppose for example this is my father and that he will leave me with assets X above plus some cash savings C and possibly some early inheritance E (question on this later). Suppose that the value of X + C + E is below the threshold. In this case, my understanding is that there is no declaration to make in Japan, correct? Are there any specific documents/proof we should make sure to keep about the inherited assets and/or their transfer, in case there are any questions?
3. Inheritance from second parent
This will include a property as well as any residual savings and assets, and will almost for sure go above the reporting threshold. No questions now, will cross the bridge with the help of a professional when we come to it.
4. Early inheritance questions
My parents are considering using the early inheritance system to support me in buying a home at some point in the next few years. As far as I know, the gifted amount will be subtracted from the specific gifting parent’s exemption and again I should be able to apply this to both parents, correct?
If my parents keep all of their money in the same shared account, who is considered to be the gifting parent, simply the person I put in the declaration?
In case they both want to gift me an early inheritance I would have to file 2 different declarations, right?
by HighlySkilledWeeb