Can Taiwan's compulsory portion (特留分) be avoided — and does a Singapore trust do it?

應繼分 and 特留分 are two different fractions, and the second is a fraction of the first

The confusion behind most family arguments is that the two words are used as if they were the same number. 應繼分 is the statutory share — what an heir takes when nobody has written anything down. Civil Code article 1138 sets the order of heirs after the spouse: lineal descendants, then parents, then siblings, then grandparents. Article 1141 divides equally by head within the same order. Article 1144 places the spouse: she shares equally with first-order heirs; she takes one half against second- or third-order heirs; two thirds against fourth-order heirs; and the whole estate where there is no heir in any of the four orders. 特留分 is different in kind. It is the minimum a will cannot take away, and article 1223 expresses it not as a slice of the estate but as a proportion of that heir's own 應繼分. So the two numbers move together: change the composition of the family and both change.

The arithmetic, worked, because the fractions are useless in the abstract. Method: a surviving spouse and three adult children, no debts, no gifts of the kind article 1173 brings back, a net estate of NT$120,000,000, and the version of article 1223 in force today. 應繼分 first — article 1144, item 1, puts the spouse on the same footing as the first-order heirs and article 1141 divides by head, so there are four equal shares of NT$30,000,000 each. 特留分 second — article 1223 gives a spouse and each lineal descendant one half of their 應繼分, so each of the four is protected to NT$15,000,000. Total protected: NT$60,000,000. Total the founder may direct by will without anyone being able to disturb it: the other NT$60,000,000, exactly half. Now suppose the will leaves the entire estate to the eldest son. The spouse and the two other children each abate NT$15,000,000 out of that gift; the son keeps NT$75,000,000. He does not lose the will. He loses NT$45,000,000 of it.

Two mechanics decide whether that number is right. Article 1224 says the 特留分 is calculated from the estate as determined under article 1173, less debts. Article 1173 requires that property given by the deceased to an heir before the succession opened for the purpose of marriage, of setting up a separate household, or of going into business be added back to the estate at its value at the date of the gift, unless the deceased expressed a contrary intention at the time, and then deducted from that heir's own share on division. The practical effect is the one families never see coming: the NT$40,000,000 the father put into one son's factory fifteen years ago enlarges the pot against which everyone else's 特留分 is measured, and is then charged against that son. The second mechanic is time. The Judicial Yuan's own Judicial Weekly, issue 2103 of 29 April 2022, records that the 扣減權 is treated as a formative right exercised by a unilateral declaration to the recipient — no lawsuit is required to exercise it — and that it is extinguished by lapse of time by analogy with Civil Code article 1146, paragraph 2: two years from knowledge of the infringement, and in any event ten years from the opening of the succession. An heir who waits for the family mood to improve can wait the right itself away.

The article 1223 reconciler: the government database is showing you next year's law

This is the part no other page states, and it decides real money. Open the Ministry of Justice Laws and Regulations Database at the article page for Civil Code article 1223 today, 4 September 2026, and the text rendered is four items: the compulsory portion of a spouse is one half of that spouse's 應繼分; of a lineal descendant, one half; of a parent, one half; of a grandparent, one third. Siblings do not appear. That is the amended text. It is not the law today. The banner at the top of the same page reads that some or all of the provisions of this Act have not yet taken effect, last effective date undetermined, and the amendment note underneath records that the amendment to article 1223 promulgated on 17 August 2026 takes effect six months after promulgation.

The text actually governing a death occurring today sits one click away, under the historical-version link on the same database. It is five items, in a different order: the compulsory portion of a lineal descendant is one half of his 應繼分; of a parent, one half; of a spouse, one half; of a sibling, one third; of a grandparent, one third. Article 12 of the Act Governing the Implementation of the Inheritance Chapter of the Civil Code, fetched separately, is the commencement rule and says so in one sentence: the article 1223 of the Civil Code as amended on 28 July 2026 takes effect six months after promulgation, and the general commencement rule in the preceding article does not apply. Promulgation was 17 August 2026. Six months later is on or about 17 February 2027. For any death before that date, siblings have a compulsory portion of one third of their 應繼分. For any death on or after it, they have none. Succession law applies as at the date of death, so the operative question is never which text is on the screen; it is which text was in force on the day the succession opened.

What turns on it, worked. Method: a founder with no children and no surviving parents, leaving a spouse and two siblings, net estate NT$60,000,000, and a will leaving everything to the spouse. 應繼分 — article 1144, item 2, gives the spouse one half, NT$30,000,000, and article 1141 divides the remaining NT$30,000,000 equally between the two siblings, NT$15,000,000 each. For a death today, article 1223 in its in-force five-item form protects each sibling to one third of that, NT$5,000,000; the two of them abate NT$10,000,000 out of the gift to the spouse. For a death on or after commencement, they abate nothing. Note carefully what does not change: siblings remain heirs under article 1138 and keep their 應繼分 on an intestacy. What the amendment removes is only the protected floor — that is, the ability to override a will. The Ministry of Justice's stated reason is that patterns of family life have changed and the tie between siblings is no longer what it was. For a family drafting now, the practical point is unglamorous and urgent: the wall the will has to clear is about to move, and which wall applies is decided by a date nobody schedules.

The avoidance menu, answered item by item

Lifetime gifts. This is the real answer to the question, and it is narrower than the seminars suggest. Article 1225 by its terms abates 遺贈 — a testamentary gift — and nothing else. The Judicial Weekly article cited above states the orthodox position squarely: a disposition of his property made by the deceased during his lifetime is unrestricted, save for dispositions taking effect on death, such as a gift in contemplation of death. The same source records that dispositions on death other than 遺贈 are caught by analogy, and lists them: designation of the method of estate division under article 1165 paragraph 1, designation of shares, 死因贈與, and a trust created by will — all held to permit the exercise of the 扣減權 by analogous application of article 1225, citing Supreme Court judgments 103 Tai Shang 880 and 104 Tai Shang 1480. Read those two propositions together and the line is clear. A gift completed and registered while the founder is alive and competent falls outside 扣減; a testamentary trust does not. Two honest qualifications, labelled as such. First, whether and how a lifetime gift can ever be reached is contested in the Taiwanese literature and is not settled by statute — we state the practice, not a guarantee. Second, article 1173 already reaches back at a lifetime gift of the marriage, separate-household or business kind, not to reverse it, but to enlarge the base on which everyone else's 特留分 is calculated. A gift can therefore be immune from abatement and still cost the recipient the same money on division.

Now the tax half, which families conflate with the civil half and should not. Estate and Gift Tax Act article 15 provides that property given within two years before death to the deceased's spouse, to an heir in the order set by Civil Code articles 1138 and 1140, or to such an heir's spouse, is deemed part of the estate and taxed with it. That is a rule about the tax base. It does not by itself restore the asset to the estate for the purposes of 特留分, and article 1225 is not written in tax language. The two systems draw the line in different places and on different clocks, which is why a transfer can be perfectly effective against a sibling's 扣減 claim and still produce a tax assessment — and why the reverse also happens. A lifetime gift also carries gift tax in its own right: for 2026 the Ministry of Finance fixed the annual gift-tax exemption at NT$2.44m, with brackets of 10 per cent to NT$28.11m, 15 per cent to NT$56.21m and 20 per cent above, in the announcement of 27 November 2025 and its official table.

The sale that is not a sale. Selling the apartment to one child at a nominal price is the oldest item on the menu and it fails twice. On the civil side, Civil Code article 87 makes a declaration of intent void where it is made in collusion with the other party as a sham, and the transaction the sham conceals is governed by the rules applicable to that transaction — a fake sale is treated as what it actually is, a gift, and a void transfer never left the estate at all. On the tax side, Estate and Gift Tax Act article 5 deems a transfer to be a gift where property is transferred for a manifestly inadequate consideration, to the extent of the difference, and separately deems any sale of property between relatives within the second degree of kinship to be a gift unless the buyer can produce firm proof of payment which was not lent to him or secured for him by the seller. The proof requirement is the whole rule: the burden sits on the family. Registration in someone else's name — 借名登記 — is the same trade under a different label and is worse. Taiwanese courts treat the arrangement by analogy with mandate, and Civil Code article 550 provides that a mandate relationship is extinguished by the death of either party unless the contract provides otherwise or the nature of the business precludes it. The inference, and we label it as an inference: what falls into the estate on the founder's death is not the apartment but a claim to recover it, which every heir can see, value and litigate. 借名登記 does not shrink the estate. It converts an asset into a lawsuit.

Insurance, and the trust. Insurance Act article 112 provides that where an insured sum is agreed to be paid on the death of the insured to a beneficiary he has designated, that sum may not be treated as part of the insured's estate; Estate and Gift Tax Act article 16, item 9, keeps the same proceeds out of the gross estate for tax. That is the cleanest exclusion on the menu and it is why it is sold so hard. Two limits. On tax, the Ministry of Finance circulated by letter Tai-Cai-Shui No. 10900520520 of 1 July 2020 a revised schedule of sixteen worked cases, prepared 16 June 2020, in which death benefits were nonetheless brought into the estate on the substance-over-form principle; the recurring characteristics named in the schedule are single-premium purchase, purchase at advanced age, purchase while already ill, purchase shortly before death, purchase in a very large amount, purchase funded by borrowing, and premiums paid equal to or greater than the sum insured. Substance over form has statutory footing in article 7 of the Taxpayer Rights Protection Act, which directs the authority to assess on the real economic substance, defines tax avoidance as abuse of legal form to escape the elements of a tax charge, and — the against-interest detail worth knowing — puts the burden of proving avoidance on the authority and generally bars a separate evasion penalty, subject to concealment. On the civil side the exclusion is real but it is not a plan: proceeds paid to a designated beneficiary sit outside the estate, and therefore outside 扣減, but the premiums came out of the estate and the timing pattern that attracts the tax authority is precisely the deathbed pattern. As for a Taiwanese trust: Trust Act article 1 defines the relationship as a transfer of property rights to a trustee to manage for a beneficiary, so a trust settled during life with someone other than the settlor as beneficiary is a completed lifetime disposition — outside 扣減 on the orthodox view, and immediately inside gift tax, because Estate and Gift Tax Act article 5-1 deems the settlor to have given the beneficiary the right to the trust benefit and taxes it as a gift. A trust created by will is the opposite on both counts: article 3-2 charges estate tax on it at the testator's death, and the Judicial Weekly lists it among the dispositions on death that the 扣減權 reaches by analogy.

Renunciation, and moving the money out. 拋棄繼承 is not an avoidance tool and cannot be used as one against an heir. Civil Code article 1174 lets an heir renounce, but only in writing to the court within three months of learning that he is entitled to inherit — which presupposes that the succession has already opened, so a family agreement signed while everyone is alive binds nobody. Article 1175 makes the renunciation retroactive to the opening of the succession and article 1176 redistributes the renouncing heir's 應繼分 to the others. The consequence for 特留分 is arithmetic rather than doctrine: 特留分 is a fraction of 應繼分 and an heir who has renounced has neither, so renunciation extinguishes the floor along with the share, and it does so at the renouncing heir's own election. Estate and Gift Tax Act article 17, paragraph 2, also strips a renouncing heir of the spouse-to-grandparent deductions. Moving assets offshore, finally, changes the forum and the enforcement problem, not the rule. That is the subject of the next section.

The Singapore counterfactual, and its four honest limits

Start with the hinge, because everything else follows from it. Article 58 of the Act Governing the Choice of Law in Civil Matters Involving Foreign Elements provides that succession is governed by the national law of the deceased at the time of his death, with a proviso that where under Republic of China law a Republic of China national would be an heir, he may inherit the deceased's property situated in the Republic of China. For a Taiwanese founder, that means the Taiwan Civil Code — articles 1138, 1144, 1223, 1225 and all — is the succession law of his estate on the day the succession opens, and it does not stop being so because the account is in Singapore or the holding company is in the British Virgin Islands. The proviso pulls in the same direction. A page that begins anywhere else is selling something.

What Singapore actually provides is section 90 of the Trustees Act 1967, and it is worth quoting rather than paraphrasing, because the paraphrases oversell it. Subsection (1) deems a person who creates a trust, or transfers movable property to be held on an existing trust, during his lifetime to have capacity to do so if he has capacity under the law applicable in Singapore, the law of his domicile or nationality, or the proper law of the transfer. Subsection (2) then provides that no rule relating to inheritance or succession affects the validity of that trust or transfer where the person had capacity under subsection (1). Subsection (3) sets two conditions: the rule does not apply if, at the time of creation or transfer, the settlor was a citizen of Singapore or domiciled in Singapore; and it applies to a trust only where the trust is expressed to be governed by Singapore law and the trustees are resident in Singapore. Subsection (5) adds that a trust is not invalid merely because the settlor reserved powers of investment or asset-management functions. A Taiwanese founder is ordinarily neither a Singapore citizen nor Singapore-domiciled, so the gateway is ordinarily open. Singapore also supports the architecture around it: a trust period of up to 100 years, and no public trust register. The text above was read on Singapore Statutes Online, page last updated 4 September 2026.

Now the four limits, stated plainly, because a page that omits them is how families buy litigation. First, forum. Section 90 binds a Singapore court applying Singapore law to the validity of a Singapore trust. It does not bind a Taipei court, it does not displace article 58, and it says nothing about what a Taiwanese judge may order the settlor or an heir personally to do while they are within the jurisdiction. Second, situs. Subsection (1) speaks of transfers of movable property; land in Taiwan is not movable property, its transfer is governed by the law of its location, and no Singapore statute reaches the Taipei land registry. Third, tax. Nothing in section 90 touches the Estate and Gift Tax Act, which charges the entire worldwide estate of a national habitually resident in Taiwan; because Singapore has charged no estate duty on deaths on or after 15 February 2008, there is also no foreign tax paid to credit. The site's page on the 2026 遺產稅免稅額 sets out that computation and this page does not vary it. Fourth, timing and motive. A settlement made when capacity is already arguable will be attacked on capacity; a transfer inside the two-year window before death is pulled into the tax base by article 15 wherever the trustee sits; and a transfer whose evident purpose was to strip an heir invites both a 扣減 claim in Taipei and an assessment under article 7 of the Taxpayer Rights Protection Act. Doing it late does not merely fail. It documents the intent.

What is genuinely different, said without inflation. Singapore has no compulsory portion for non-Muslims, so the Singapore-law question is whether the trust is valid, not what fraction each child is owed — and validity is a question decided years earlier, on paper, rather than at a hearing after the funeral. Assets settled into a lifetime trust are not in the estate on the day the succession opens: there is nothing there to divide, nothing to freeze while heirs argue, and nothing waiting on a grant, so the trustee can distribute or lend on the day a Taiwanese tax deadline falls due. Set against that: Taiwan-situs land and shares in Taiwanese companies stay where they are and stay subject to article 1223, the Taiwan tax is unchanged, and the settlement itself is a taxable gift when made. The honest summary is narrow and, for a reader who is outside the room, useful anyway. A Singapore trust changes what is in the estate. It does not change whose law governs the estate, and it does not change who the family is. The decisions that make the difference are the ones taken while everyone is alive and nobody is in a hurry — which is also, inconveniently, when nobody wants to have the conversation.