The liquidation-type will: selling property to divide the proceeds, and how it is executed

In short: a liquidation-type will has the executor sell real estate and other assets and divide the remaining proceeds among heirs or beneficiaries. It suits cases where the property is hard to divide in kind. Registration for the sale is handled by a judicial scrivener and the tax on the proceeds by a tax accountant, engaged separately.

Updated and sources checked: 12 October 2026. This article organises liquidation-type wills and the executor’s role as general information. Retrieved National Tax Agency materials were checked, but the current consolidated Civil Code (民法), final amendment number and complete commencement history, and registration and tax treatment specific to liquidation-type bequests remain unverified. They require review by a judicial scrivener, tax accountant and lawyer.

What is a liquidation-type will? (its relation to division by conversion)

A liquidation-type will directs that property (typically real estate) be sold and converted to cash, and the proceeds distributed to heirs or beneficiaries. As opposed to division in kind, where the property is divided as it stands, dividing the proceeds after a sale is called division by conversion. A liquidation-type will sets out this division by conversion in the will and entrusts the sale and distribution to the executor.

The executor's role is set by the Civil Code. Civil Code Article 1012(1) provides that "the executor has the rights and duties to perform any and all acts necessary to manage the inherited property and otherwise execute the will, in order to realise the contents of the will." Civil Code Article 1015 provides that an act done by the executor within authority, shown to be as executor, takes effect directly against the heirs. These amended provisions took effect on 1 July 2019.

When is selling and dividing better than dividing the property in kind?

Suitable situation	Reason
Several heirs who want a fair cash split	Avoids co-ownership shares; divides by amount
Heirs are distant or busy and co-ownership is hard to manage	A sale and settlement leaves no management behind
There are no heirs and a gift to a third party is intended	The proceeds can go to a specified person or body

Co-ownership can require coordination between owners over sale and management, and differences of opinion may cause difficulties. Consent requirements differ for management, preservation and disposal; confirm the requirements for each specific act with a qualified professional (current consolidated provisions remain unverified). Selling and dividing the proceeds lets the basis of distribution be set in the will. However, a sale takes time and cost, and there is no guarantee of selling at the market price. Where an heir wants to keep the property in kind, division by conversion is not always best.

What does the executor do in the sale and distribution? (order of registration and settlement)

A typical flow is as follows. Under Civil Code Article 1012(2) only the executor may perform a bequest, and Civil Code Article 1013(1) prohibits an heir, where there is an executor, from a disposition that obstructs the execution of the will.

Order	Main work	Who
1	Taking up the executor role; checking heirs and property	Executor
2	Checking the registration method and documents; preparing necessary inheritance registration, etc.	Judicial scrivener for registration
3	Finding a buyer, sale contract and settlement preparation	Executor and real-estate company
4	Settlement, delivery and transfer registration to the buyer	Sale parties; judicial scrivener for registration
5	Checking costs and tax, and distributing the net proceeds	Executor; tax accountant for tax

The table separates preparation from settlement; it does not place transfer registration to a buyer before finding the buyer or signing the sale contract. The specific title, registration order and applicant treatment for liquidation-type bequests have not been verified. Show the will and property circumstances to a judicial scrivener to establish any necessary inheritance registration and the procedure. Individual legal judgments on the executor’s authority belong to a lawyer or other competent professional.

Who bears the tax on the sale proceeds (quasi-final return)?

National Tax Agency No.2022 states that the quasi-final return covers income from 1 January in the year of death to the date of death, with filing and payment within four months from the day after the commencement of inheritance becomes known (retrieved 12 October 2026). That material alone does not establish who receives taxable capital gains from a later sale under a liquidation-type will or who must file which return (unverified). A tax accountant should assess the will, rights and sale timing, distinguishing the quasi-final return from sale-related filing.

If inherited real estate is sold within a set period, a special rule may allow part of the inheritance-tax amount to be added to the acquisition cost ("acquisition-cost addition"). Who is taxed and how much, and whether the rule applies, depend on how the property was acquired and the holding period. Tax calculation and filing are the tax accountant's role. This article does not give individual tax amounts.

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How should the will be drafted to avoid trouble?

• State clearly the purpose of selling and dividing the proceeds (division by conversion) and the shares and order of distribution
• Appoint an executor and set out specific authority to sell, apply for registration, terminate contracts and settle (also keep in mind the difference from a specified-property succession will under Civil Code Article 1014)
• Set a policy on the minimum sale price and timing, and the treatment if it does not sell
• Write the order in which costs (registration, brokerage, tax) are deducted from the proceeds

Whether to make it a notarial deed is discussed with a notary. Infringing a reserved portion (the minimum share held by heirs other than siblings) can lead to later disputes, so design the distribution carefully. Where a dispute is anticipated, or for judgements on the reserved portion or the will's validity, consult a lawyer.

How are drafting, registration, tax, disputes and the sale handled separately?

Who to engage	Scope
四葉行政書士事務所	Support for drafting the will; taking up executor office; preparing the property inventory
Notary	Drawing up the notarial-deed will
Judicial scrivener	Inheritance registration and transfer of ownership
Tax accountant	Capital gains, acquisition-cost addition and filing
Lawyer	Reserved portion, the will's validity, disputes among heirs
四葉不動産株式会社	Appraisal and brokerage of the property sale

四葉行政書士事務所, 四葉社会保険労務士事務所 and 四葉不動産株式会社 are each a separate, independent business. You contract with each field's provider separately as an independent business, and each provider bills and receives payment directly. Our office receives no referral fee.

See inheritance support, the engagement process and the fee schedule. The property sale is handled separately through the inherited-property consultation service. For the basics of wills, the handwritten and notarised will comparison and, on the executor's duties, the executor's duties and appointment are useful references.

FAQ

Q. How does a liquidation-type will differ from division by conversion?
A. Division by conversion is the name of a method of dividing an estate by selling it and splitting the proceeds; a liquidation-type will sets this out in the will and entrusts the sale and distribution to the executor. Division by conversion is also possible by a division agreement.

Q. Can one of the heirs serve as the executor?
A. Yes. But the sale, registration, settlement and distribution are a heavy burden, and interests among heirs can conflict. Considering neutrality and effort, appointing a professional is also an option. Registration is handled by a judicial scrivener.

Q. Does the executor pay the tax on the sale proceeds?
A. National Tax Agency No.2022 states that the quasi-final return covers income from 1 January in the year of death to the date of death, with filing and payment within four months from the day after the commencement of inheritance becomes known (retrieved 12 October 2026). That material alone does not establish who receives taxable capital gains from a later sale under a liquidation-type will or who must file which return (unverified). A tax accountant should assess the will, rights and sale timing, distinguishing the quasi-final return from sale-related filing.

Q. Is a liquidation-type will that infringes the reserved portion void?
A. It is not immediately void, but an heir whose reserved portion is infringed may make a monetary claim. For the design of the distribution and the response where a dispute is anticipated, consult a lawyer.

Sources (Primary Information)

• e-Gov: Civil Code: Article 1012 (the executor's rights and duties: paragraph (1) on any and all acts, paragraph (2) on performing a bequest), Article 1013(1) (prohibition of obstructive acts), Article 1014 (execution of a will on specified property), Article 1015 (direct effect against heirs), Article 907 (division of the estate).
• Amendment and commencement history of Civil Code Articles 1012, 1015, etc.: original-material retrieval and reconciliation with the current consolidated provisions are incomplete (unverified).
• National Tax Agency: No.3267, special rule on acquisition cost when inherited property is transferred (referenced 2026-10-12).
• National Tax Agency: No.2022, the return when a taxpayer dies (quasi-final return) (referenced 2026-10-12).

Updated and sources retrieved 2026-10-12. The explanations in National Tax Agency No.2022 and No.3267 were checked within the scope of the retrieved texts. The Civil Code’s e-Gov consolidated provisions and amendment/commencement history, specific liquidation-bequest registration practice and attribution of capital gains remain unverified and are not treated as retrieved. Publication is held pending qualified review; registration, tax and authority require a judicial scrivener, tax accountant and lawyer.

This is general information and does not guarantee the will's validity, the reserved portion, or the outcome of registration or tax. Individual matters are judged by human qualified professionals and the responsible authority after checking the records. Written by Joji Uramatsu, administrative scrivener and licensed real-estate transaction specialist.