This article discusses, at a high-level, estate administration in China and some considerations when someone inherit assets located in China. As mentioned in my previous article, planning for cross-border estate administration with China is complex thus, I must admit the information is general in nature and based on my personal experience.

China’s Estate Administration

When it comes to estate administration involving moveable or immovable property in China, one can assume the process is different to the Canadian process.  Therefore, as with any foreign jurisdiction, a testator should be aware of the local laws that apply to estate administration.

In China, estate administration requires the involvement of the Public Notary Office which oversees granting the inheritance right of certification – this may be seen as similar to our probate process.  Interestingly, China will not recognize a foreign grant of probate and will require the executor to proceed according to China’s law.  The process takes time, and the Canadian executor will be required to provide specific documentation such as a death certificate, affidavit confirming the validity of the Last Will, confirmation of who are the beneficiaries and some information concerning the beneficiaries (notably, relationship with the deceased). All information and documentation requested by the Public Notary Office must be provided in order for the certifications to be completed and issued.

A Canadian executor must understand the undertaking of executorship in China; notably, their responsibilities when accepting the role as representative of the estate. For example, in China, estate administrators shall perform their duties in accordance with the Chinese law and shall bear civil liability to the beneficiaries or creditors for damages resulting from an intentional act or gross negligence. This clearly highlights the importance of seeking professional advice before accepting the mandate of executorship in China.

Estate administration in China will be time consuming as the process is strict, and every step must be complied with.   Advice should be sought from a cross-border estate lawyer.

Inheriting Assets Located in China

Canadians inheriting property situated in China will face some challenges in accessing their inheritance. It is worth noting that since 2011, China has enacted the “Law of the People’s Republic of China on Choice of Law to Foreign Related Civil Relation” where a provision stipulates that foreign inheritance laws will apply to the personal assets in China, except for the inheritance of real estate properties.  However, in practice, the process is more nuanced and complex and often China’s succession law will be followed.

If a Canadian inherits cash held in a bank account in China, the beneficiary can expect the Chinese bank will request the foreign beneficiary to open a Chinese bank account, which may in itself be challenging.  Then, there is a process for transferring the funds to the beneficiary’s Chinese bank account and ultimately, a foreign bank account; this process takes significant time and may need to be implemented over a period of time.

If someone inherits a real estate property in China, they will need to obtain a notarial deed of right to succession and have the Last Will notarized by the local Notary Office in the province or municipality or autonomous region in which the real estate property is located (if this is not possible, the beneficiary needs to go before the Chinese Courts).

If the beneficiary wishes to sell the inherited real estate property, they will need to consider China’s taxes when an owner has obtained the property ownership by way of gift or inheritance; there are income tax implications and possibly additional taxes depending on the local jurisdiction (province/municipality/autonomous region) in which the real estate property is situated.

Truth be told, inheriting property located in China will test a beneficiary’s patience.  From experience, it is one thing to read about China’s succession law but another thing to proceed with the succession of assets.  The key is to have experienced professional advisors in both jurisdictions that can navigate the process and necessary documentation– this will [somewhat] expedite the matter.