These days, it’s completely normal for a family’s assets to be spread across Japan and the United States — for example, when a relative emigrates from Japan to the U.S., or buys a home while living in America. But once those assets actually have to be passed on to the next generation, things quickly become complicated, especially because of the tax issues involved. In this post, I’d like to briefly summarize some of the key points I’ve noticed through my day-to-day work advising clients on cross-border inheritance.
1. It’s safer to separate your Japan and U.S. estate plans
The laws that apply to married couples, the taxes imposed on assets, and the rules on wills and trusts are all different in Japan and the United States. In the U.S., it is common for spouses to hold a joint bank account, but such accounts simply do not exist in the Japanese banking system. A U.S. joint account is usually held “with right of survivorship,” which means that when one spouse dies, the balance automatically belongs to the surviving spouse and does not pass through probate. In Japan, by contrast, there is no joint account concept; funds in the deceased person’s bank account are treated as part of that person’s estate and must be divided among the heirs.
Real estate in the U.S. is also governed by the law of the state where the property is located. If a Japan‑resident testator tries to dispose of U.S. property in a Japanese will together with their Japanese assets, the will may not satisfy the formal or substantive requirements of the applicable state law, and could be invalid or become a source of dispute. The reverse can also happen.
On top of that, states like California apply community property rules between spouses—an approach used in only nine U.S. states. Under community property law, most assets acquired during the marriage are presumed to have been built up jointly, and division is based on a strong presumption of equality, with various exceptions developed through case law depending on how the couple actually lived and managed their property. For someone used to “ordinary” family law, community property can feel completely counterintuitive—I remember needing far more than ten question marks the first time I studied it. Yet this unfamiliar set of rules is exactly what governs a couple’s assets when one spouse dies, making cross‑border succession even more complex.
For all of these reasons, the safest and most practical way to handle Japan–U.S. cross‑border inheritance is usually to plan Japanese assets under a Japanese will and U.S. assets under a U.S. will or trust, rather than trying to cover everything with a single document.
2. The Process of Probate Court
In most U.S. states, if a person dies without a will and has not placed their assets into a trust, their estate will go through a court‑supervised procedure called probate. In cross‑border cases, if the deceased owned property in more than one state, a separate probate process may be required in each state. When heirs live overseas, and depending on how capable the local attorneys are, the process can become quite uneven—and it is not unusual for probate to take two or even three years to complete.
One of my clients inherited U.S. real estate from their parents and later decided to sell it, only to discover that the estate had never been properly probated. Until the court process is finished, the property cannot legally be transferred, so they have been forced to keep paying the carrying costs while waiting for everything to be sorted out.
In practice, it is far wiser to put U.S. assets either into a valid state‑law‑compliant will or into a trust before death, so that probate can be minimized or avoided altogether.
3. Paper checks are still common in the U.S.
Something many people do not realize until they are directly involved in a U.S. estate is that paper checks are still widely used there, and mailing a check is often treated as a standard way to make payments, even today. In inheritance procedures, it is quite normal for beneficiaries to receive their share of the estate by check rather than by wire transfer.
n Japan, by contrast, banks no longer provide a practical way for individual clients to cash foreign checks, so a U.S. check sent to a heir living in Japan effectively has no value unless it can be converted into a bank transfer. To change the method of payment, it is usually necessary to petition the probate court and obtain permission for a different form of distribution.
In one of my own cases, opposing counsel insisted on issuing a check instead of arranging an international wire, which led to far more delay and effort than anyone had anticipated. Practical differences like these—between what is “normal” in the U.S. and what is workable in Japan—can significantly increase the burden on heirs if they are not anticipated in advance.
4. Summary
What has been covered above is only a small sample of the many differences between Japan and the United States when it comes to inheritance, probate, and estate division; a truly comprehensive explanation could easily fill an entire book. If you have a specific situation or set of questions about cross‑border succession, please feel free to contact me through the inquiry form for tailored advice.