º¬Ðß²ÝÉçÇø

In practice, unclaimed inheritances due to unresolved problems surrounding the deceased¡¯s estate, including debts and claims, are common. To address this, the Civil Code introduced the estate administrator system, where articles 1145 to 1149 grant civil affairs departments the authority and responsibility to act as estate administrators and refine the legal framework for cases with no heirs, or where all heirs renounce their inheritance.

The law stipulates that, in cases of unclaimed inheritance, civil affairs departments, which perform social service functions, act as ¡°last resort¡± estate administrators. This system resolves the practical impasse of ¡°no one to sue¡±, providing interested parties with a clear path for dispute resolution. As inheritance cases increase, civil affairs departments are increasingly participating as litigants in such disputes.

Nature of responsibilities

Based on legal provisions and practical application, the appointment of civil affairs departments as estate administrators is typically a last-resort measure, employed in exceptional circumstances where no heirs exist, or all heirs have renounced their inheritance.

Legally, the civil affairs department in the deceased¡¯s last place of residence is designated estate administrator, reflecting its role in social relief and welfare. The author argues that when civil affairs departments act as estate administrators, any litigation related to the estate should be considered civil litigation.

Their role in such proceedings should be equivalent to that of other civil parties; once designated as estate administrators, their actions should be regarded as civil, not administrative, in nature.

Challenges in performing duties

Identifying estate assets poses significant difficulties. Under current laws, civil affairs departments acting as estate administrators lack direct legal authority to access property information. They typically rely on third-party intermediaries and investigation orders to conduct inquiries.

Estates often include diverse assets such as movable property, real estate, securities and vehicles. However, the absence of a unified inquiry system increases the likelihood of omissions when civil affairs departments compile estate inventories.

The criteria for assessing the necessity of hiring a third party, and the reasonableness of the costs, vary. Due to limited personnel and a lack of legal expertise, civil affairs departments often step in as estate administrators in cases where there is ¡°no defendant to sue¡±. Once designated, they must handle subsequent litigation, including debt repayment, estate management and bequests.

To fulfil duties such as identifying the estate¡¯s scope and value, litigation management and asset disposal, civil affairs departments inevitably require assistance from third-party intermediaries.

A review of numerous cases reveals that many plaintiffs challenge the necessity or reasonableness of third-party fees, arguing that these costs, which are paid from the estate, are excessive or unwarranted. This issue is particularly prevalent in Shanghai. However, the lack of detailed supporting regulations leaves courts without uniform standards for determining necessity and cost reasonableness, resulting in rulings that do not set a precedent.

Estate administrators lack unified operational guidelines. Currently, civil affairs departments have not established detailed rules for performing these duties, nor do they have dedicated internal bodies to manage estate matters. As a result, there are no standardised regulations and practices vary across regions, making it difficult to replicate successful experiences and leaving responsibilities unclear.

Recommendations

• 

  Authorise civil affairs departments to access property information and establish horizontal and vertical co-ordination mechanisms between queried institutions and civil affairs departments to facilitate their duties as estate administrators.

• Introduce detailed regulations to define the scope of necessity for engaging third-party intermediaries and standardise criteria for expenses charged to the estate. Regarding cost reasonableness, since the civil affairs department is primarily responsible for engaging third-party intermediaries, any objections raised by creditors or other heirs during litigation should not lead to adjustments of these fees if the civil affairs department has not disputed them.

Instead, rulings should focus on the amounts charged to the estate. Assessment of the reasonableness of such fees should be based on the considerations made by the civil affairs department at the time of engagement, local development and reform commission fee standards, and the actual workload involved.

• Develop operational guidelines for estate administrators to standardise their work. Drawing on the bankruptcy administrator system, establish detailed and specific procedures to regulate the duties of estate administrators. Additionally, create a directory of third-party intermediaries that will assist estate administrators with their duties, enhancing the professionalism of civil affairs departments in estate management.
• Stakeholders should take proactive steps to handle estates effectively. On discovering the death of a relevant party without heirs, or where heirs have renounced inheritance, they should promptly communicate with the civil affairs department. If disputes arise over the selection of an estate administrator, these can be resolved through special procedures or addressed alongside other disputes in litigation. During the estate administration process, stakeholders should actively supervise and assist the administrator, provide property leads and support the civil affairs department in preparing a comprehensive estate inventory.

While the system of civil affairs departments serving as estate administrators faces numerous challenges in practice, the establishment and refinement of relevant regulations will undoubtedly transform its advantages into practical effectiveness, further improving the institutional framework of inheritance law in China.

Li Yinghui is a founding partner at Zhihe Partners. She can be contacted by phone at +86 186 0211 9842 or by email at liyinghui@zhihepartners.com

Hong Liang is a founding partner at Zhihe Partners. He can be contacted by phone at +86 139 0185 8589 or by email at hongliang@zhihepartners.com