Division of Inheritance in Kind or in Value

- Determine the heirs of Hoa as: Mr. Chat, Mrs. Hien, Mrs. Hai. Each person is entitled to a share worth: 154,842,289 VND (Mr. Ngoc receives the inheritance of Mr. Chat).

The next part of the judgment is the division of specific assets to each heir and payment of the difference.

In Decision No. 79 dated June 13, 2003, the Chief Justice of the Supreme People's Procuracy appealed the Appeal Judgment No. 55 dated April 12, 2002 of the Appeal Court of the Supreme People's Court in Hanoi with the comment: The judgment determining the time of inheritance opening, inheritance, heirs, and application of inheritance division is well-founded. However, the inheritance shares are not of equal value, and the inheritance cannot be divided equally in kind. The Court of First Instance valued the inheritance in November 1999, but it was not until April 2002 that the appeal was heard, and the value of the land and house at 42 Nguyen Huu Huan had a significant difference. The Court of Appeal did not re-evaluate at the time of the appeal hearing, which did not ensure fairness for Mr. Ngoc and other heirs when receiving payment of the difference in value. Request for review of the case according to the instructions in Official Dispatch No. 109/2001/KHXX dated September 4, 2001 of the Supreme People's Court.

The Supreme People's Court of Appeal in Hanoi upheld the Appeal Judgment No. 55 because the heirs did not request revaluation and had proceeded in accordance with the law.

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The question is: If Mr. Ngoc does not accept the above valuation because after 2 years, the house at 42 Nguyen Huu Huan has a very high actual value, while in terms of litigation, the Court has conducted the valuation since 1999 and in accordance with the law, will the Court of Appeal re-evaluate the property? Should there be further guidance on valuation according to market value but at the time of trial?

3.1.3. Division of inheritance in kind or in value

Article 685 - Clause 2: “ The heirs have the right to request the division of the inheritance in kind; if it cannot be divided equally in kind, the heirs shall

The heirs may agree on the valuation of the property and on the recipient of the property; if no agreement is reached, the property shall be sold for division. The law specifically stipulates the form of division; however, in some inheritance disputes, the Court may only divide in kind or only by value.

3.1.3.1. Inheritance dispute case when one of the heirs sold the inheritance before division:

The case is summarized as follows:

The plaintiffs are Mr. Huynh Hao and Chau Muoi and the defendant is Chau Thanh. Mr. Chau Kiet died in 1961 and Mrs. Lan Nga died in 1990 and had two children, Chau Thanh and Chau Thuy. Chau Thuy died in 1955, and his wife was Huynh Chung, who had two children, Huynh Hao and Chau Muoi. In 1970, Mrs. Chung adopted a child named Moc Nguyen.

Mr. Kiet and Mrs. Nga came to Vietnam from China before 1945 and bought together a house at 457 Duong Cong Trung Street. Later, Chau Thanh built three houses from this house: 457/24, 457/26, 457/28 Cong Trung Street, District 6, now Duong Thi Nho Street, District II, Ho Chi Minh City. In 1961, Mr. Kiet died, Mr. Thanh sold house 457/28 to rebuild the two remaining houses.

After Mr. Kiet died, Mrs. Nga moved to Buon Ma Thuot, so the family register and the house declaration in 1977 were under the names of Mr. Thanh and his wife (Mrs. Tram). Therefore, the authorities allowed these two people to legalize the two houses. Later, Mr. Thanh sold these two houses to Mr. Loi Thai for 190 taels of gold in 1992. Huynh Hao and Chau Muoi sued to divide the inheritance of their grandparents.

The first instance judgment decided:

The two houses above are the inheritance of Mr. Kiet and Mrs. Nga, in which Mr. Thanh contributed.

The legal heirs of Mr. Kiet and Mrs. Nga are Mr. Thanh and the successors are Huynh Hao and Chau Muoi (Mr. Thuy's children).

The house sale contract between Mr. Thanh and Mr. Thai is invalid and the consequences will be resolved according to Article 137 and Article 146 of the Civil Code.

The value of the two houses above after deducting Mr. Thanh's contribution is the inheritance divided for Mr. Thanh and also divided for Huynh Hao and Chau Muoi.

Mr. Thanh appealed to determine that the two houses above belong to him, thereby recognizing the sale contract between him and Mr. Thai as legal, and rejecting the plaintiff's request to divide the inheritance.

The plaintiff requested to uphold the first instance judgment but requested to divide the inheritance in kind. The appeal judgment decided:

- Recognize the House Sale Contract between Mr. Thanh and Mr. Thai - determine that the proceeds from the sale of the two houses are the inheritance of Ms. Nga and Mr. Kiet after deducting Mr. Thanh's efforts in leveling the ground as well as the efforts in building the house.

- The legal heirs are Mr. Thanh and Mr. Thuy's two children.

The inheritance dispute case through two levels of trial shows the lack of consistency in the application of the law. The decision of the Court of First Instance is reasonable, the Court of Appeal misapplied the provisions of the law on "disposition of valuable assets jointly owned by many people". This solution reveals the contradiction in the Court's perception. If the two houses are recognized as inheritance of Mr. Kiet and Ms. Nga, the contract of sale of those two houses between Mr. Thanh and Mr. Son Ha cannot be recognized as legal. On the contrary, if this contract is recognized as legal, the two houses must be recognized as legally owned by Mr. Thanh.

In our opinion, to be reasonable, the two houses sold to Mr. Son Ha must be declared invalid and violate the will of the co-owners. It cannot be

Take the money from selling the houses to divide because the value of the two houses from 1992 compared to 2001 has a huge difference. If the money from selling from 1992 is divided, it will be very disadvantageous for the two heirs. According to the plaintiff's request to receive inheritance in kind to meet the needs of food, accommodation and living, the Court should resolve according to their request after deducting Mr. Chau Thanh's contribution.

3.1.3.2. In case the Will leaves a division in kind but the Court divides the value among the parties:

In Article 684 - Clause 2: " In case the will determines the division of the inheritance in kind, the heirs shall receive the inheritance in kind according to the benefits and profits obtained from that inheritance or shall bear the loss in value of the inheritance up to the time of division of the inheritance; if the inheritance is destroyed due to the fault of another person, the heir shall have the right to request compensation for damages". However, there are courts that have not ruled in the direction of this Article.

Case content: Mr. Vo Van Khiem and his wife Nguyen Thi Dua had nine children: Mrs. Gap, Mrs. Choi, Mr. Hoi, Mr. Phung, Mrs. Mau, Mr. Trong, Mrs. Vui, and Mr. Thieu. On July 1, 1972, Mr. Khiem made a will with the following content: Handing over the house and property in the house to Mr. Trong to manage for the worship of his parents, and the remaining 1.26 hectares of rice fields would be divided equally among the nine children. This will was agreed upon by Mr. Dua and his children and confirmed by the old government. At the end of 1972, Mr. Khiem died, in 1983, Mr. Dua died, until their deaths, Mr. Khiem and Mr. Dua still did not change the will made in 1972. The rice fields in the will were later turned into a guava garden measuring 6,870 m2 by Mr. Trong and were granted a land use rights certificate in 1992.

Due to a conflict, in 1999, the heirs of Mr. Khiem and Mr. Dua requested to divide the inheritance. In the first instance judgment No. 111, the CT District People's Court accepted the will and divided the above land plot equally among the heirs and forced the heirs to pay the value of the trees and the land compensation to Mr. Trong. However, in the appeal judgment No. 137 of the Dong Thap Provincial People's Court, it was assigned to

Mr. Trong for the entire land plot above because he had been granted a Land Use Rights Certificate and forced Mr. Trong to pay the other heirs the value of each inheritance of VND 2,500,000. In our opinion, the First Instance Judgment ruled in accordance with the spirit of the will. During the period when the inheritance had not been divided, the issuance of the Land Use Rights Certificate by the competent authority was an omission because, based only on the declaration of the grantee, the authority issuing the ownership certificate did not verify the origin of the land and therefore issued the Land Use Rights Certificate to Trong. This omission cannot be the basis for the Court of Appeal to recognize Mr. Trong's ownership.

3.1.4. Determining the division of inheritance in the common property

From the time of opening the inheritance, if there is a request to divide the inheritance, the Court must determine what the deceased's inheritance consists of, including not only the deceased's personal property but also the deceased's share of the property in joint property with others. In addition to the grounds provided by the parties, the verification of the property must be carried out fully, not omitting elements related to the property owned by the deceased himself and the deceased's joint property in the property with others. There have been many cases where the Court did not fully verify the inheritance, leading to many shortcomings in the decision and judgment, causing disadvantages to the heirs.

Case content: Mr. Dam Quang Tung and his wife, Ms. Nguyen Thi Dinh, have six children together: Ms. Ban, Ms. Nhan, Ms. Linh, Ms. Don, and Ms. Diep. Mr. Tung has a relationship with Ms. Mau, who has two children: Mr. Trung and Ms. Thuy.

Mr. Tung died on April 28, 1997, and left a will for Mr. Trung to inherit all of his estate, including: the four houses mentioned above, three sao and seven thuoc of residential land, all assets in the house and 600m2 of cultivated land.

Mrs. Dinh asked the Court to divide the inheritance. Ms. Nhan and Ms. Don asked to use the land area that their parents gave them. Mr. Dinh's other children

Tung and Mrs. Dinh gave the inheritance to their mother. Ms. Thuy did not request to divide the inheritance.

During the dispute resolution process, it was determined that Ms. Dinh had been managing and using 1,200 square meters outside the camp since 1972.

Appeal Judgment No. 340 decided:

- Divide the ownership of two houses in the west and trees on the land, one bicycle to Mr. Trung. The total value is 3,400,000 VND. Mr. Trung is allowed to use 500m2 of cultivated land.

- Divide the ownership of the two houses to the east to Mrs. Dinh into two wooden beds, a rice box, a personal cabinet, a table, a lotus fan, a cast pot, a bronze tray, and three longan trees. The total value is 7,000,000 VND, but the difference must be paid to Mr. Trung, which is 3,000,000 VND, and the land outside the camp will be used. Mrs. Dinh will be allowed to use 100 square meters of cultivated land.

The Deputy Chief Justice of the Supreme People's Court has filed a protest No. 90 against the above appellate judgment because the determination of the inheritance to be divided in the above appellate judgment is not accurate. Upon review, there is sufficient evidence to believe that the will written by Mr. Tung is legal. However, when he wrote the will, the marital relationship between Mr. Tung and Ms. Dinh still existed. Therefore, Mr. Tung's decision to give the entire inheritance to Mr. Trung is incorrect. On the other hand, Mr. Tung also did not allow Ms. Dinh to enjoy 2/3 of the inheritance share according to Article 669 of the 2005 Civil Code, which is inappropriate. Therefore, Mr. Tung's will is only partially legal. In this case, to accurately determine the portion of property that Mr. Trung is entitled to according to Mr. Tung's will, it is necessary to determine Mr. Tung's portion of the property in the joint property with Ms. Dinh, and only the portion of property that is Mr. Tung's legacy will Mr. Trung be entitled to inherit according to the will after allocating 2/3 of the inheritance to Ms. Dinh.

In addition to the cases we mentioned above, in civil life there are many types of inheritance disputes due to different reasons that cause instability in legal and inheritance relations.

3.2. CAUSES OF ERRORS IN THE PROCESS OF RESOLVING DISPUTES ON PAYMENT AND DIVISION OF HERITAGE

The development of the market economy has led to instability in economic life. In the past, the inheritance of family property was passed down in a hierarchical order, clearly distinguishing between superiors and subordinates, and promoting the role of the patriarch, so the number of disputes over the inheritance of the deceased did not increase as in the present era. However, those strict regulations did not ensure equality in the right to inheritance. In the present era, inheritance disputes are very common. In terms of society, moral values between brothers and relatives seem to no longer be preserved because material life dominates all relationships. All actions to achieve desired benefits are increasingly sophisticated. It is difficult for lawmakers to predict what is about to happen in this area, so the provisions of related laws cannot be amended to keep up with the development trend. There are many objective and subjective reasons that lead to the backlog and prolongation of inheritance disputes. Here, we would like to mention some of the main reasons as follows:

Firstly , due to the low stability of civil law, especially the law related to the management of land use rights, one of the assets (heritage) with the highest economic value. Each time there is an amendment, it causes confusion and inconsistency, leading to many judgments being revised, amended, or annulled. On the other hand, the procedural law on the settlement of land disputes is not reasonable, the issuance of land use right certificates is too "sloppy" in some places and too slow in others. This leads to the pushing and shoving between the Court and the People's Committee at the competent level to resolve disputes. For example, for residential land, currently, according to the 2003 Land Law, if the user is not named in the Land Registry, and there is no property on the land, the dispute is not under the jurisdiction of the People's Court, therefore the Court cannot include the land in the inheritance block for division.

Second , the 1995 Civil Code has entered social life, but up to now, some provisions are no longer suitable to reality. The 2005 Civil Code has only been in effect for nearly a year, so the cases of inheritance disputes according to statistics are cases that have been accepted and resolved in previous years. Therefore, some provisions in the inheritance regime are not clearly explained and applied, and there are many different ways of understanding them, for example:

- Article 640 - Clause 2, Point b stipulates the rights of the estate administrator: " Entitled to remuneration as agreed with the heirs". In reality, it is rare for the parties to agree on remuneration in advance. In practice, in most cases, the Court deducts remuneration for the administrator and user of the estate (regardless of whether there is an agreement or not). However, there is an opinion that the estate administrator who is also the user and exploiter of the benefits from the estate is only entitled to remuneration when there is an agreement. If there is no agreement, when there is a dispute, the Court will not force the heirs to pay them remuneration.

- Article 683 stipulates the order of priority for payment of property obligations and expenses related to inheritance, in which in clause 8: " Other debts to individuals, legal entities, or other entities" . Through our survey, we found that the judgments resolving inheritance disputes are all related to the heirs, almost no inheritance cases involve lawsuits demanding that the heirs pay the previous amounts that the deceased had to pay or lawsuits demanding payment of the difference that one of the heirs has made in excess of the inheritance he or she is entitled to. Perhaps, the settlement between the heirs and the creditors has been "peacefully" achieved. But with the diverse and complex developments in life, these lawsuits will sooner or later occur. Therefore, there needs to be legal regulations to resolve the case where the inheritance left behind is not enough to pay the property obligations to the creditors.

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