The Supreme Court rendered the 107-Tai-Shang-1453 Civil Decision of August 17, 2018 (hereinafter, the “Decision”), holding that the cost of estate management, which are paid out of the estate, is a common good in nature and includes all necessary and indispensable costs for the preservation of the estate.
According to the facts underlying this Decision, the Appellee asserted that when the inheritee was deceased, he left behind certain parcels of land and compensation as his estate and a will. The Appellee asserted that since the inheritance tax and land value taxes on such estate which had been paid by him should be reimbursed from the estate because they are inheritance expenses, this complaint was filed to divide the estate. Part of the Appellants remarked that to pay the inheritance tax, the Appellee had asked each of them to pay NT$5 million, which should be included as an inheritance cost. However, the original trial court did not accept the assertion. Therefore, this matter was appealed to the third instance.
According to this Decision, Article 1150 of the Civil Code provides that estate management cost shall be paid out of the estate. The so-called “estate management cost” refers to the cost incurred at the beginning of inheritance. Since the cost is a common good in nature and is not only beneficial to every heir as well as inheritance creditors and other stakeholders, it would be fair that such cost should be assumed by the estate. Therefore, this should include all necessary and indispensable expenses for the preservation of the estate, including factual custodial fees and taxes. In addition, the requirement that such expenses be paid out of the estate under this article refers to the assumption and payment of such expenses by the estate.
It was further pointed out in this Decision that the land value taxes on the inherited lands in this matter were paid by both parties based on their inheritance shares since 2012, and whether some Appellants had each paid an inheritance tax of NT$5 million was still to be verified. If such payment indeed was made to pay the inheritance tax, the land value taxes and NT$5 million should certainly be paid by the estate, and this pertains to the scope of the estate. Although the original trial court held that the inheritance taxes and land value taxes paid by the Appellee were part of estate management expenses and thus allowed their payment out of the estate, still such expenses was asked to be deducted from the monetary compensation ought to be made by the Appellee to the other people, while the NT$5 million respectively paid by some Appellants was simply ignored. In addition, whether the other heirs had overpaid the land value taxes was not considered at the same time before a determination unfavorable to the Appellants was made. Therefore, the original decision was reversed and remanded for insufficiency of grounds, contradictory reasons, and erroneous application of laws and regulations.