Li Yaohong lost her entire family in a car accident in March. Now she could lose everything they left behind.

The 33-year-old is embroiled in a legal battle to claim the assets and savings her sister and brother-in-law had built up, a total of almost 3 million yuan ($470,000), before their tragic death in Heilongjiang province.

According to a loophole in the law, the sum will instead go into government coffers because Li's 6-year-old niece, who was traveling in the same car at the time of the accident, survived her parents by just a few hours.

"The inheritance process begins at death, so theoretically the little girl automatically inherited her parents' property when she was on the way to hospital," explained Shao Xiaoyan, Li's attorney.

China's Heritage Law states that the only people eligible to inherit the assets of a person who dies without a will, are the deceased's spouse, children, parents, siblings or grandparents. The list does not include aunts and uncles.

Property that cannot legally be claimed goes to the government, or the collective ownership that the deceased was a member of, which mostly occurs when a death occurs in a rural community.

"Being the dead couple's only child whose grandparents had already passed away, she (Li's niece) technically had no inheritors," Shao said, adding that her parents owned an apartment, a car, and had savings at the time of their death.

She said Li's case illustrates that the 27-year-old inheritance code no longer meets the needs of the socioeconomic situation of the country, a place without a tradition of making wills but with growing private property and nuclear families with only one child.

Both the Beijing High People's Court and the capital's civil affairs bureau were unable to provide data on how many disputes have arisen from people dying without wills.

Analysts said the lack of statistics indicated an unawareness of the emerging issue, which could one day deprive relatives their legal property.

Lawmakers expect the issue to be addressed by the country's legislature this year.

The National People's Congress Standing Committee, China's top legislative body, has initiated the task to amend the law, said Wang Shengming, director of the Civil Law Office of the NPC Standing Committee Legislative Affairs Commission.

Liang Huixing, member of the NPC Law Committee and a civil law professor at the Chinese Academy of Social Sciences, submitted a proposed amendment to the Inheritance Law to the NPC in March.

Liang said he broadens the current 37 clauses to 90, and among other suggestions has urged the legislature to include more family members into the list of legal inheritors.

"We have more private property than before, but the family planning policy has made family trees much simpler. Many kids, especially in cities, don't even have a brother or sister," he said. He warned the clauses, if kept unchanged, will trigger more disputes in the future and result in an infringement on property rights.

Aside from increasing the number of legal inheritors, Liang has also proposed expanding the list of inheritable properties to include land use rights, insurance, shares and antiques collections.

He said the suggestions have been made in hope of plugging a loophole in the law, which lists inheritable objects as income, houses, forest, livestock, cultural objects, copyright and patent rights as well as other lawful property.

"The Chinese didn't have so many kind of property in the past when the law was legislated, and the list of inheritable properties should update along with socioeconomic change," he said.

zhaoyinan@chinadaily.com.cn