1. What is limited inheritance?

• Limited inheritance means that when the decedent leaves debts, the heir is only required to repay those debts using the inherited assets, without using their own personal funds.
• In simple terms, when the debts exceed the inherited assets, the maximum liability is limited to the value of the estate, and any remaining debts do not need to be repaid.
• For example：
  • After Jeff passes away, leaving debts of NT$6 million and assets of NT$5 million, the child Tina only needs to repay NT$5 million, and the remaining NT$1 million does not need to be repaid.
  • After Jeff passes away, leaving debts of NT$3 million and assets of NT$5 million, the child Tina only needs to repay the NT$3 million debt and may inherit the remaining NT$2 million.

2. What is the difference between limited inheritance and waiver of inheritance?

• Waiver of inheritance means that both assets and debts are entirely renounced.
• Limited inheritance means that debts are repaid only within the scope of the inherited assets.

3. How should one choose between waiver of inheritance and limited inheritance?

• Under the Civil Code, if an heir does not specifically apply to waive inheritance, the law presumes that the heir accepts the inheritance under limited inheritance, including both assets and debts.
• However, if it is clear that the inherited debts significantly exceed the assets, it is generally recommended to proceed with a waiver of inheritance for convenience.
  
  

4. Is it necessary to actively apply for limited inheritance?

• Since June 12, 2003, the Civil Code has been amended to adopt a comprehensive limited inheritance system. In principle, if an heir does not waive inheritance, it is deemed limited inheritance by law.
• No special application is required; the inheritance (including debts) will automatically be handled under limited inheritance.
• The purpose of this amendment is to protect heirs, so they are no longer required to bear unlimited liability under the previous general inheritance system.
• However, it is still recommended that heirs prepare an inventory of the estate and report it to the court to avoid situations where, after settling debts with the estate, additional creditors later emerge and request repayment.
  
  

5. Choosing Limited Inheritance in Specific Situations.

• When debts exceed assets and the heir has known of their inheritance rights for more than three months, the statutory period for waiving inheritance has expired. In such cases, the heir can only proceed with limited inheritance to protect their rights.
• For example, if a mother passes away leaving no assets but NT$300,000 in credit card debt, her spouse, daughter, and son would normally waive inheritance together. However, if the grandparents are still alive and suffering from Alzheimer’s disease, they may be unable to obtain seal registration certificates, making it impossible to complete the waiver process.If the first-order heirs (the son and daughter) waive inheritance, the NT$300,000 debt would pass to the grandparents. If the grandparents have assets, the first-order heirs may instead choose not to waive inheritance and apply for limited inheritance through the court.
• Although the Civil Code now adopts comprehensive limited inheritance, meaning liability is limited to the inherited estate, proactively applying to the court and submitting an estate inventory (including assets and debts) provides practical advantages in evidence and debt settlement, and helps prevent personal financial loss.
• In another scenario, even if the grandparents have passed away, there may be many third-order heirs (siblings), some of whom reside overseas and cannot conveniently waive inheritance. Additionally, first-order heirs may wish to avoid burdening extended family members with debts, and therefore choose to apply for limited inheritance instead.
• Another situation arises when the decedent’s debts exceed the estate and the cause of death is accidental or suicide. Grandchildren may choose limited inheritance to avoid disclosing the death to elderly grandparents and causing emotional distress.This is because involving grandparents in a waiver of inheritance requires obtaining seal registration certificates, and during the application process, the household registration office may inquire about the purpose, potentially revealing the concealed situation to them.

6. Do the time limits for limited inheritance and waiver of inheritance conflict?

• Waiver of inheritance must be made within three months from the time the heir becomes aware of the death.
• Both the application for waiver of inheritance and matters related to limited inheritance are concentrated within the same three-month period after becoming aware of the death. Only one option may be chosen, so it is important to make proper arrangements within this critical timeframe.
   

7. Waht is the purpose of submitting an estate inventory?

• Submitting an estate inventory is a crucial part of limited inheritance.
• By submitting the inventory, the total amount of debts can be clearly identified, allowing for proper proportional repayment and helping to avoid disputes caused by unexpected additional liabilities.
   

8. How to submit an estate inventory?

• The estate inventory must be submitted by the heirs who have not waived inheritance, and one representative may be appointed to handle the submission. 
• Submitting the estate inventory protects both heirs and creditors. If heirs fail to submit it, creditors may apply to the court to order the heirs to do so.
• It must be submitted within three months from the time the heir becomes aware of the inheritance. If this period is exceeded, the heir may apply to the court for an extension.
• During the reporting period, heirs must not independently repay any debts to creditors.
• The inventory should be submitted to the district court (Juvenile and Family Division) at the decedent’s last place of residence.

9. What is the time limit for creditors to declare claims?

• According to Article 1157 of the Civil Code: “When the heir submits an estate inventory to the court, the court shall, through a public notice procedure, order the creditors of the decedent to declare their claims within a specified period. The specified period shall not be less than three months.”
• In simple terms, under limited inheritance, creditors must declare their claims within the specified period after receiving notice from the court in order to protect their rights.
  
  

10. What documents are required for submitting an estate inventory?

1. Household registration transcript of the decedent (with deregistration).
2. Household registration transcripts of all heirs.
3. Seal registration certificate of the applicant.
4. Inheritance system chart.
5. List of heirs.
6. Estate inventory.
7. Application fee: NT$1,000.
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11. What should be done after receiving the court notice for limited inheritance?

• After receiving the court ruling, follow the instructions stated in the ruling or provided by the court.
• If publication is required, the newspaper or magazine submitted to the court must have the relevant section marked with a red pen, and the applicant must bring their seal.
• The effective period of limited inheritance is calculated as six months starting from the day after the public notice is published.
• Proceed to the tax authority for assessment. The tax office will require a copy of the court notice, the estate tax assessment certificate, the estate inventory, the decedent’s deregistered household transcript, household registration transcripts, and the applicant’s ID and seal.