[News Terms] The Seed of Family Feud Among Chaebols: 'Yuryubun'

Following the passing of the late Cho Seok-rae, Honorary Chairman of the Hyosung Group, attention is focused on the distribution of shares within the Hyosung Group, and there is speculation that the second son, former Hyosung Vice Chairman Cho Hyun-moon, who experienced conflicts over management rights, may file a 'claim for return of statutory reserved portion.'

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The statutory reserved portion refers to the minimum share of inheritance that the bereaved family members are entitled to receive by law, regardless of the deceased's wishes. This system is in place because if the testator could freely dispose of their assets solely based on their will, it could jeopardize the livelihood stability of the remaining family members. It was introduced in 1977 with the intent to guarantee a minimum inheritance share for women and other children to maintain their livelihood, especially in a social atmosphere where inheritance was primarily given only to the eldest son. Generally, the statutory reserved portion takes precedence over the will during the inheritance process.

The provisions regarding the statutory reserved portion are specified from Article 1112 to Article 1118 of the Civil Act. According to these articles, the family members entitled to exercise the statutory reserved portion are the decedent's direct descendants, spouse, direct ascendants, and siblings. The statutory reserved portion for first-priority heirs, such as the spouse or direct descendants, is half of the legal inheritance share, while for second-priority heirs, such as direct ascendants and siblings, it is one-third of the legal inheritance share. If there are first-priority heirs, second-priority heirs cannot exercise the statutory reserved portion.

If the decedent had gifted assets to some children or third parties during their lifetime, causing the heirs to not receive their rightful inheritance shares after death, the heirs can reclaim the minimum inheritance share through a 'claim for return of statutory reserved portion.' Simply put, if the father had gifted or bequeathed all his assets only to the eldest son, after the father's death, the other children can file a claim for return of statutory reserved portion against the eldest son to recover at least a minimum portion of the estate.

However, the right to claim the return of the statutory reserved portion must be exercised within one year from the day the claimant becomes aware of the commencement of inheritance (the decedent's death) and the fact that they did not receive their rightful inheritance share. The claim must be made within ten years from the commencement of inheritance. If this period elapses, the right to claim expires.

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