A South Korean Supreme Court ruling in a complex inheritance case may create a wild high stakes terrain for North-South diplomacy. The case involves a North Korean man who fled South during the Korean War and started a second family. The court ruled that his four surviving children in North Korea have legitimate claim to a portion of their father’s estate (Korea Herald here; KBS here). The case is likely to spawn others, aided and abetted by the North Korean regime, and the consequences for North-South reconciliation and eventual unification are potentially immense.
When the Korean War broke out, a man identified only by his surname of Yoon fled the North with his eldest daughter, leaving two sons and three other daughters behind. Yoon subsequently remarried in the South and had four more children with a woman similarly identified only by surname as Kwon. Following Yoon’s death in 1987, his eldest daughter sought to connect with her remaining family in the North, and through an American missionary was ultimately able to contact four remaining siblings.
An unholy alliance ensued between the eldest daughter, the missionary, the State Security Ministry and—unmentioned in the coverage—South Korean lawyers who picked up the case. Two law suits followed: a paternity suit to establish that the North Korean siblings were in fact Yoon’s children, supported by hair and fingernail samples; and an inheritance suit demanding a share of the ten billion won ($8.9 million) estate Yoon had left to his eldest daughter, South Korean wife and children; the stories are a little unclear about how the estate was divided. The South Korean family contended that the intermediary and power-of-attorney role played by the American missionary and the assistance provided by the State Security Ministry somehow invalidated the North Korean family’s claims and that the inheritance suit should be dismissed; the paternity case had already been settled by the DNA evidence. The high court didn’t buy it, arguing that identification as Yoon’s offspring was clearly not coerced or against the North Korean siblings’ will.
The story no doubt has elements of family drama that are yet to be revealed. For example, was the eldest daughter getting cut out of the spoils and seeking revenge by diluting the estate?
But the case has wide-ranging implications. There are thousands of families in similar situations. Needless to say, we are skeptical that the North Korean family will be able to enjoy the benefits of legal victory; the regime will no doubt tax it away. Indeed, the North Korean regime now has an incentive to support such litigation, and then to tax away potential claims.
But this new opportunity to racketeer raises its own problems for the North. If you are a potential beneficiary, why pay the tax? Cases of this sort could provide incentives for family members to flee South to stake their claims.
Such payments may even be a source of diplomatic leverage for the South. The South Korean government could accept the ruling of high court, but deny the transfers on the grounds that they violate current sanctions law. But even if such payments are not prohibited under current sanctions, the actual transfers could be a practical impossibility because of the lack of credible channels. Instead, the South Korean government could hold the funds in escrow until the diplomatic situation merited their release, creating a carrot it could dangle in front of the North. Or they could hold the funds in escrow until claimed in person, increase incentives to defect.
And if North Koreans can and do successfully claim their inheritance rights in the South, does this not strengthen the case of South Koreans demanding restitution for family property or inheritances seized in the North, even if not currently supported by North Korean law?
These are just a few of the unintended consequences that the South Korea high court may have just unleashed. Who ever said unification would be easy?