getttyimagesbank

Estranged family members will no longer be eligible to claim life insurance payouts, after the government revised the trust system law whereby claimants will be limited to those already designated by the deceased.

This is the latest development in a years-long legislative effort to disqualify absentee parents as beneficiaries of an inheritance, prompted by the death of Goo Ha-ra. The K-pop star's mother attempted to claim her estate after Goo's suicide, despite having abandoned her when she was 9.

The Financial Services Commission (FSC) said the revision, effective Tuesday, will address the needs of asset holders in designating beneficiaries, as mediated by the insurance claim trust.

The revision establishes a legal framework that allows banks and insurers to introduce trust products of over 30 million won ($21,376).

The contract remains valid if the trust buyer is also the asset holder. Beneficiaries will be limited to the buyer's parents, children and spouse.

In the event of the buyer's death, the trust can be used to pay monthly income to the buyer's children who are underage or have a mental disability.

Also guaranteed will be monthly income for the children, without intervention from the buyer's ex-spouses.

The FSC said the revision will fortify the welfare of surviving family members.

Calls for the implementation of the so-called "Goo Ha-ra Law" gained momentum in August 2023, triggered by an appellate court upholding a lower court's decision that found for an 80-year-old mother claiming the death insurance payout of her son she had abandoned when he was only two years old.

The Busan High Court ruled at the time that the mother was within her rights to claim the money, since “she was not the sole responsible party in failing to raise the deceased.”

The mother filed the civil suit against her estranged daughter, the deceased's older sister, in December 2022, after the mother learned that he was eligible to receive about 300 million won in death insurance payouts and compensation from his employer.

The lower court found for the mother, citing the civil code that stipulates that inheritance is claimed first by the children of the deceased and then by the parents.

The son was single and had no children, so the mother was declared the legal inheritor.

The older sister said the ruling was beyond senseless.

“The woman who claims to be our mother left when my brother was 2," she said. "We have never heard from her since and now the court is siding with her just because she is the biological mother? This is beyond common sense.”

Further fueling the outrage was, the sister said, the mother and her new family registering the son's assets as their own.

“When I found out about this, I wanted to kill all of them and end my life," she said. "However, I didn't because I wanted to change the law.”