What to Do When Inherited Assets in Vietnam Are Pawned by Someone Else?

Ms. Hanh (name changed), an overseas Vietnamese living in Australia, asked DEDICA:

"My father passed away years ago. Late last year my mother passed away in Ho Chi Minh City without leaving a will; the estate includes a car and more than ten taels of gold, all kept by my younger brother, who lived with her. Only when I returned for the funeral did I learn that he had pawned both the car and the gold at two pawnshops to raise business capital. He can no longer redeem them, and one shop is threatening to liquidate the car. My questions: do I still have a share in that car and gold? Was it even legal for my brother to pawn them on his own? Can I recover the assets from the pawnshops? And what should I do before they are sold off, given that I live in Australia and can only stay in Vietnam for a few days at a time? I hope the lawyers can address these concerns."

DEDICA ADVISES Inherited assets in Vietnam being pawned by someone else is a situation DEDICA sees regularly in families with relatives settled abroad: before the heir overseas can complete any procedure, the assets are already sitting in a pawnshop, and the greatest fear, as Ms. Hanh puts it, is that they will be "sold off" before she can act. The situation should be broken into five questions: (1) who owns an undivided estate, and what may the person holding it do; (2) is a pledge created by someone without the right of disposal valid; (3) when can the assets be recovered from the pawnshop; (4) the sequence of action, from negotiation to litigation and emergency measures; and (5) how an heir living overseas can handle all of this remotely. DEDICA analyses each in turn.

An undivided estate belongs jointly to all co-heirs

Ms. Hanh's mother died without leaving a will, so the estate passes by operation of law. Both siblings belong to the first order of heirs under Article 651 of the Civil Code 2015 and take equal shares. Living in Australia neither removes nor reduces this right: inheritance rights do not depend on nationality or place of residence, and for movables such as gold or cars, an heir living overseas takes ownership just as a domestic heir would.

A point many people miss: an heir's rights arise immediately, with no procedure required first.

In other words, from the day the mother passed away, the car and the gold became the two siblings' common property. The inheritance declaration procedure at a notary office is merely the step that records ownership for re-registration or withdrawals; it is not a condition for the rights to arise. The brother holding the assets does not thereby become their sole owner.

The law is equally clear about what a person holding an estate may do. Ms. Hanh's brother, as the person currently possessing and managing the estate while the family has not yet appointed a formal administrator (Clause 2, Article 616, Civil Code 2015), is under a duty to:

Even an administrator named in a will or appointed by the heirs may dispose of estate assets only with the heirs' written consent (Clause 1, Article 617). In short: "holding" the assets is not the same as "being entitled to pawn" them; taking the car and the gold to pawnshops already breached the statutory duties of a person holding an estate.

Validity of a pledge created by a person without the right of disposal

The very nature of a pledge rests on one root condition: the asset must belong to the person pledging it.

Ms. Hanh's brother holds only a share in the undivided estate, yet he pledged the assets in their entirety as if they were his alone. A transaction established over property that the pledgor has no right to dispose of lacks a validity condition under Article 117 and is invalid under Article 122 of the Civil Code 2015, at least as to the other co-heirs' shares. In practice, where undivided common property cannot be separated (one car, one common holding of gold), courts tend to invalidate the transaction in its entirety.

As for the pawnshop, pawnbroking is a conditional business line and the law obliges shops to verify before accepting a pledge. For assets with ownership certificates, such as cars, the shop must keep the original ownership papers throughout the pledge period (Clause 3, Article 29, Decree 96/2016/NĐ-CP). In other words, the shop could not have failed to see that the vehicle registration bears the name of a deceased person, not the name of the person who brought the car in. The Decree further provides:

Once the pledge is declared invalid, the legal consequences return everyone to the starting point:

The pawnshop returns the assets; the person who pledged them returns the loan money. One common misconception needs correcting here: the family is not required to "pay off the debt" to redeem the assets. The obligation to repay the pawnshop belongs to the brother, who entered into the transaction, not to the co-heirs. Note also that this mechanism applies to movables: houses and land cannot be "pawned" at a pawnshop (land use rights may only be mortgaged under separate rules), so if a shop is merely holding the pink book (the house and land ownership certificate), holding the paper creates no rights whatsoever over the property itself; DEDICA analyses that topic in a separate article.

Recovering assets from the pawnshop: the line between good faith and bad faith

Invalidating the transaction is one thing; getting the assets out of a pawnshop's hands is the next. An owner may reclaim property from a person possessing it without legal grounds (Article 166, Civil Code 2015), but pawnshops typically invoke the status of a "bona fide third party", that is, someone with grounds to believe they had rights to the property (Article 180). In Ms. Hanh's situation, that argument has two weaknesses.

First, good faith must be weighed against the verification duties described above: a professional pawnbroker that accepts a car registered in someone else's name without requiring the owner's written authorization can hardly claim it "did not know and could not have known" that the person had no right of disposal (Article 181). Second, even if a court accepts that the shop acted in good faith, the law still leaves a path to reclaim the assets; how wide that path is depends on the type of asset:

For movables subject to ownership registration, such as cars, Article 168 of the Civil Code 2015 allows the owner to reclaim them even from a bona fide possessor, save for the narrow exception in Clause 2, Article 133 (a third party who relied on the property being registered in the name of the person they dealt with). That exception does not apply here, because the car is still registered in the mother's name. Mapping this onto the two types of assets in Ms. Hanh's family:

The biggest real-world risk lies not in the rules but in timing: if the shop manages to liquidate the car or sell the gold to someone else, the assets pass through yet another layer of transactions, and recovery becomes far longer and more complicated. The crux of the whole matter is therefore to freeze the status of the assets as early as possible, which is the subject of the next section.

Sequence of action: from notice and negotiation to litigation and emergency measures

DEDICA's experience in matters where an estate has been disposed of without consent: acting in the right order protects both the assets and the family relationship, and each earlier step lays the evidentiary ground for the next.

1. Consolidate standing and evidence. Gather the death certificate, the documents proving the inheritance relationship (birth and civil-status records), the vehicle registration, photos or details of the gold, and every trace of the pawning, such as shop names, pawn tickets, and messages exchanged with the brother.
2. Send written notices to the pawnshops. The content: the assets form part of an inheritance estate in dispute, the person who pawned them had no right of disposal, and all dealings with the assets must stop. After this notice, the shop can no longer claim it "did not know"; if it sells the assets anyway, the co-heirs gain further grounds to claim damages (Article 170, Civil Code 2015).
3. Negotiate within the family and with the shops. The smoothest option: the brother repays the loans and redeems the assets, with any shortfall settled internally, for example by the heirs agreeing to deduct it from his share upon division. One working session with a lawyer representing the heirs is often enough for everyone to see the legal consequences clearly and choose this route.
4. Sue when negotiation stalls. Ask the court to declare the pledge invalid and order the assets returned; emergency interim measures can be requested at the very moment the lawsuit is filed (Clause 2, Article 111, Civil Procedure Code 2015) to block any dissipation.

One more tool is worth knowing about, though it is rarely the first choice among relatives: if the person holding the estate uses deception or absconds in order to appropriate the co-heirs' shares, the conduct may amount to abuse of trust to appropriate property under Article 175 of the Criminal Code 2015 (amended in 2017), with a prosecution threshold of just VND 4 million. In most matters DEDICA handles, the client's goal is to recover the assets, not to send a sibling into criminal proceedings. Even so, when all sides understand that this tool exists, negotiations tend to become markedly more serious.

A remote-handling option for heirs living abroad

Ms. Hanh's worry that she "can only return for a few days" is not, in fact, a legal barrier. Every step above, from sending notices to the pawnshops and negotiating with her brother to filing the lawsuit, attending court and enforcing the judgment, can be carried out through an authorized representative in Vietnam. She only needs to execute a power of attorney to a lawyer while in Australia, have it notarized and consularly legalized so that it is valid for use in Vietnam (a procedure DEDICA explains in detail in a separate article), then send the original back to Vietnam; she does not need to be present in the country at any point in the process.

In pawned-estate matters, DEDICA typically accompanies clients through the full cycle: assessing the file and building an overall strategy; guiding the preparation and consular legalization of documents from abroad; sending notices and dealing with the pawnshops and the person holding the assets on the client's behalf; representing the client in negotiations among co-heirs; litigating and pursuing the case through to enforcement; and, once the estate is recovered, advising on transferring the proceeds abroad for heirs settled overseas. Clients follow progress remotely through periodic reports instead of flying back for each procedural step.

If you are abroad and discover that your family's inherited assets have been pawned, send DEDICA scans of the death certificate, the asset papers and any information about where the assets were pawned. Our lawyers will quickly assess the prospects of recovery, immediately draft notices demanding that the pawnshops stop dealing with the assets, and guide you through executing a power of attorney from abroad so that DEDICA can handle the entire matter in Vietnam on your behalf.

This article is for general reference only; every matter has its own facts, so please consult DEDICA's lawyers for advice tailored to your specific case.