Refer China: Foreigner’s 7-Figure Estate May Go to the State Due to No Heirs

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Foreigner's 7-Figure Estate May Go to the State Due to No Heirs

In a remarkable legal case, a Shanghai court recently ruled that the estate of a U.S. citizen of Chinese origin, who passed away in Shanghai, may be absorbed by the state and directed toward public welfare due to the absence of legal heirs.

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Born in Shanghai in 1930, Mr. Liu left for the United States in 1948 to pursue higher education and later became a naturalized U.S. citizen. Despite living abroad for decades, he never severed emotional ties with his homeland. In the 1980s, he donated one million yuan in his father's name to establish the Liu Huhan Education Foundation in Shanghai. He also set up a personal charity fund in his ancestral hometown of Nanxun and donated rare ancient books to the Huzhou Library.

Mr. Liu returned to China in his later years and resided in Shanghai until his passing in early 2023. He was the only child in his family, remained unmarried, had no children, and left behind no will. Several million yuan in deposits remained in multiple foreign banks within China, now deemed "unclaimed."

The only known relative was a distant nephew who paid for Mr. Liu's funeral expenses. However, lacking legal heir status, he could neither access the full details of Liu's estate nor reclaim the expenses.

Despite Mr. Liu's foreign citizenship, Chinese law applies to estate matters within its borders under the Law on the Application of Laws to Foreign-related Civil Relationships. Since all assets are located in China, the court was empowered to handle the case under Chinese legal jurisdiction.

The court ruled that the local civil affairs department where Mr. Liu resided and died would act as the estate administrator. The judgment was grounded in Article 1145 of China's Civil Code, which states that when there are no heirs or executors, the civil affairs bureau or village committee of the deceased's last domicile must manage the estate.

According to legal experts, the civil affairs department will first initiate a public notice procedure to identify any outstanding debts or claims. If none arise within the stipulated time, a year-long public notice will follow to identify potential heirs.

Should this period end without any legitimate claim, the estate—valued at several million yuan—will, per Article 1160 of the Civil Code, be declared ownerless and absorbed by the state. Ultimately, the assets are expected to be directed toward public welfare initiatives.

Source: 上观新闻