Insights

Ningbo Parents Funded to Register Children's Divorce Division

Ningbo Author：LuXu WANG

After getting married, Mr. Zhao and his wife purchased a commercial residential property, with the down payment provided by Mr. Zhao’s parents. The property is registered in the names of both Mr. Zhao and his wife. During the divorce, Mr. Zhao’s parents claimed that the funds were a loan and demanded that both spouses jointly repay it; his wife, however, maintained that the funds constituted a gift from her in-laws to both of them. Disputes of this nature are quite common in divorce cases, and the relevant rules will undergo new changes in 2025. The conclusion first says: if the parents' contribution to purchase the house is registered under the name of the child's husband and wife, the agreement shall be handled according to the agreement; If there is no agreement, the capital contribution after marriage shall be deemed as a gift to both husband and wife in principle, and the real estate shall be divided according to the joint property of the husband and wife. If one parent makes full contribution and the house is registered in the name of his or her children and there is no clear agreement to give to both parties, the (II), the marriage, at the time of divorce division, the court may decide that the house belongs to one of the children of the funder, and only give the other party appropriate compensation-if the parents claim to borrow, they shall bear the burden of proof for the consent of the loan.

1. Legal Basis: The Applicable Context of Interpretation (I) and Interpretation (II)

When handling this type of issue, the first step is to determine whether the capital contribution occurred before or after the marriage: Article 29 of

Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Code of the the People's Republic of China Civil Code (Fa Shi [2020] No. 22, hereinafter referred to as Interpretation I) stipulates that: before the marriage of the parties concerned, if the parents contribute to the purchase of the house for both parties, the contribution shall be recognized as a gift to their own children, except that the parents clearly indicate that the donation is given to both parties; after the marriage, if the parents contribute to the purchase of the house for both parties, it shall be dealt with in accordance with the agreement; if there is no agreement or the agreement is not clear, it shall be dealt with in accordance with the principles stipulated in the fourth paragraph of the first paragraph of Article 1062 of the Civil Code-that is, there is no agreement after marriage The contribution is presumed to be a gift to both husband and wife, and the property corresponding to the contribution of the house becomes the husband and wife.

Article 8 of the Interpretation (II) of the Supreme People's Court on the Application of the Marriage and Family Code of the the People's Republic of China Civil Code (Fa Shi [2025] No. 1, hereinafter referred to as Interpretation II), which came into effect on February 1, 2025, refines the division rules on the basis of Interpretation I, which is divided into two paragraphs: The first paragraph stipulates that during the existence of the marriage relationship, one parent shall fully contribute to the house, if the donation contract clearly stipulates that only one of the children will be donated, it shall be handled according to the agreement; if there is no agreement or the agreement is not clear, when the divorce divides the joint property of the husband and wife, the people's court may decide that the house is owned by the investor's children, and comprehensively consider the common life And the situation of the birth of the common child, divorce fault, contribution to the family, and the market price of the house at the time of divorce, determine whether the party acquiring the house will compensate the other party and the specific amount of compensation. The second paragraph stipulates that if the husband and wife purchase the house partially funded by one parent or the parents of both parties, if the gift contract clearly stipulates that the corresponding capital contribution is only donated to one of their children, it shall be handled according to the agreement; if there is no agreement or the agreement is not clear, the divorce divides the husband and wife When the property, the people's court may, according to the litigant request, based on the source and proportion of the capital contribution, taking into account factors such as living together and the birth of common children, the fault of divorce, the size of the contribution to the family and the market price of the house at the time of divorce, it is decided that the house belongs to one of the parties, and the party who obtains the house shall make reasonable compensation to the other party.

string together the rules to see: for the houses with full capital contribution and registered in the name of one's own children, "the investor's children take the house + appropriately compensate the other party" becomes the norm; for the houses with partial capital contribution (such as down payment) or both parents' capital contribution, the court will make a comprehensive discretion based on the capital contribution ratio, the possibility of "the party who contributes more to take the house and give the other party reasonable compensation" increases-in Mr. Zhao's case, the parents contributed the down payment and registered the names of both parties, which belongs to the second paragraph of Article 8 of the interpretation. In the event of divorce, the court will comprehensively determine the division on the basis of the source of contribution, and the wife's expectation of "necessarily dividing half" is not accurate.

The core issue of the 2.: Is the contribution a loan or a gift? Who is the burden of proof

When the parents contribute money, there is usually no written document. When the parents claim "it is a loan" and the children's spouse claim "it is a gift". How does the court judge? The rule is: the party who claims the loan (usually the parent) bears the burden of proof for the agreement of the loan. The reason is that parents' contribution to the purchase of their children is more in line with the social norm of giving, and the establishment of a loan relationship requires both parties to have the intention to borrow (articles 6

67and 679 of the Civil Code).

What evidence can prove the existence of a loan agreement? A written promissory note or loan contract, a remittance note indicating “loan,” records of subsequent repayment of principal and interest, or a clear statement in chat records such as “this money will be repaid later.” What evidence will make the claim fail? There is no debit note, the transfer note is "purchase money" or there is no note, the parents have never urged it, and the amount obviously does not match the children's income and still do not claim it for a long time. Practical Reminder: Oral "borrowing" is almost impossible to prove, and the court generally does not believe it. If parents do have the intention to borrow money, they must ask their children to issue an iou and note "loan" when transferring money. It is best to agree on interest-otherwise, the iou will be supplemented at the time of divorce. One of the spouses may claim that it is made up afterwards and colluded maliciously. The court will review the time of the formation of the iou and the authenticity of the fund exchange.

In addition, pay attention to a rule in the opposite direction: even if it is determined that the contribution is a gift, it is also required to see whether "whether the gift contract clearly stipulates that only one party of one's own children will be given"-if the parents state in writing when making the contribution that "the contribution is only given to my son and has nothing to do with the daughter-in-law", the rights and interests corresponding to the contribution belong to the children of the contribution shall belong to the children of the other party, and cannot be claimed when divorce, proceeding with the foregoing presumption.

3. Split by Registration: Split Trend of Five Combinations

Combine "capital contribution situation × registration situation" to see:

  1. After marriage, one party’s parents provide the full funding, and the property is registered in the name of their own child.: If there is no clear agreement between the two parties, the first paragraph of Article 8 of the Interpretation II applies. The house is generally awarded to the children of the investor, and the other party gets appropriate compensation (the amount of compensation is determined by the age of marriage, children, fault and market price);
  2. After marriage, one party’s parents provide the full funding, and the property is registered in both spouses’ names.: The registration indicates that the donee includes both parties; generally, the property is divided as joint property, but the court may determine the respective shares based on the source of funds and each party’s contributions.
  3. After marriage, one parent partially contributes (such as down payment), registered under the name of both parties: Mr. Zhao's case type, the second paragraph of Article 8 of Interpretation II is applicable, and the house ownership and compensation are determined comprehensively based on the source and proportion of capital contribution;
  4. After the marriage, the parents of both parties contribute and register their own funds in the name of one or both parties.: Comprehensive treatment shall be carried out based on each party’s respective capital contribution ratio, with the party holding the higher contribution ratio enjoying a preferential position in the division.
  5. Before marriage, parents contribute to the registration of their children: Article 29 of the interpretation 1, it is determined that the house is personal property and will not participate in the division (the part of joint loan repayment after marriage will be dealt with according to the compensation rules).

In either case, parents are not registered rights holders and are not directly involved in the divorce division-if there is another dispute over the return of capital contributions between parents and children, it should be resolved through a separate case of borrowing or unjust enrichment, and parents cannot be "stuffed" into the divorce proceedings to directly divide the house.

Operation suggestion and evidence list of 4. parties

to the contributing parents: transfer notes ("loan" or "gift to my son personally"), sign a written document when necessary; keep the source of funds to avoid cash delivery; if you want to protect your own rights and interests after contributing, you can consider registering as a co-owner (pay attention to the balance between taxes and the stability of children's marriage).

To the children of the donee: understand that "parents' contribution ≠ white take", and confirm with parents in writing as soon as possible when the nature of the contribution is not clear; if the contribution is a gift, keep the proof of the meaning of the gift (WeChat, written), and use it to fight against the other party's claim of "sharing the loan" when divorcing.

to the divorced parties: fixed purchase contract, capital contribution transfer certificate, registration information, loan repayment record, communication record between parents and both parties; determine the bottom line of negotiation after judging the nature of capital contribution-if the other parents fully contribute and register in their children's name, it is more realistic to strive for "compensation" than to strive for "half"; if their parents contribute, it is necessary to prevent the other party from diluting the contribution with "joint loan repayment" and "joint decoration.

5. After a dispute arises: separate litigation and evidence confrontation

The dispute over the nature of capital contribution not only occurs within the divorce proceedings, but also often occurs in the form of separate cases, and the two types of cases should be clearly identified:

One is that the parents sued their children for "borrowing money" in another case ".Before or after divorce, parents may file a lawsuit against their children and former spouse on the grounds of a private loan dispute, seeking repayment of the funds they contributed. The focus of court review in such cases is whether the loan agreement is real: the time when the loan is formed (whether it is written in a surprise before and after the divorce), the transfer notes, the presence or absence of interest agreements and repayment records, and whether the statements of parents and children are consistent. The practical rule is: there are transfer vouchers + remarks on loans + IOUs formed at the time of capital contribution, the probability of support is high. The direction of the defense of one spouse when responding to the lawsuit: the point of contribution is earlier than the breakdown of feelings, there is no agreement on borrowing, according to the relationship at that time should be a gift, the other party has malicious collusion. Such litigation and divorce proceedings can be parallel, and the court will refer to each other.

The second is to claim the proportion of capital contribution in divorce proceedings. one of the parents contributed a large part of the capital and claimed to divide it more when dividing it, while the other claimed that "the capital contribution is a gift and should be divided equally according to the common property". The court made a comprehensive discretion based on the source and proportion of capital contribution according to Article 8 of Interpretation II. At this time, the completeness of the evidence determines the determination of the proportion of capital contribution: parents' transfer vouchers, account flow and registration information are indispensable, and there is almost no room for determination of cash capital contribution. Evidence-taking advice to both parties: if one's parents contribute more, pull out the complete chain of "parent's account → child's account → developer/seller"; if one claims that the other party's contribution is a gift or loan is unknown, one is required to provide evidence of debit note and loan agreement and examine the time of its formation.

At last, it is suggested that the limitation of action and period: for property disputes after divorce, the three-year limitation of action is generally applicable (from the date of discovery); for those who revoke the property clause of the divorce agreement, the circumstance of being subject to fraud and coercion is limited by the period of exclusion; for private loan litigation where parents claim to borrow money, the three-year limitation of action is applicable, from the time the agreed repayment period expires or the return is claimed-delays not only make it more difficult to collect evidence, but may also expire the right itself.

Case Reference: Where parents finance the purchase of a house for their children and the property is registered in the names of both spouses, upon divorce it shall, in principle, be treated as marital joint property, with particular emphasis on calculating the portion of mortgage repayments made during the marriage and the corresponding increase in value. Ningbo local court has similar treatment: in the case of property dispute after Qian mou and Wang Jinhan's divorce (Ninghai county people's court, Zhejiang province,(2022) Zhejiang 0226 minchu no 1604), the down payment of the house before marriage belongs to the registrar, the joint repayment of the loan and the value-added part after marriage are recognized as the joint property of the husband and wife, and the compensation for the other party is ordered to be 305053.9 yuan. It is evident that such properties are not returned mechanically in proportion to the respective contributions; rather, compensation is provided for the post-marital joint mortgage repayments and any appreciation in value. Where there is an agreement, the terms of the agreement shall prevail; in the absence of a clear agreement, the party asserting that the contribution constitutes a loan bears the burden of proof as to whether it is a loan or a gift. Trial Court: Ninghai County People’s Court, Zhejiang Province Case Number: (2022) Zhe 02

26Minchu 1604 No.

6. Frequently Asked Questions

The down payment made by parents, can parents go back when they get divorced?

If you claim to borrow money, you must prove the agreement of the loan (debit note, remarks, collection records), otherwise it is usually recognized as a gift and cannot be returned; even if it is recognized as a loan, the object of the claim is also the children and husband of the borrower, which is treated according to the common debt rules, which is different from "returning the house.

registered in the children's name, parents can split when divorce?

No. Parents are not registered rights holders and do not have the right to directly divide the property registered in their children's names.

Will the court support the verbal agreement that it is a loan?

Extremely difficult. Oral lending is almost impossible to prove in the context of divorce, and the court generally determines the gift.

If one parent makes a full contribution and registers their children's name, does the other parent really not get a cent?

No. The first paragraph of Article 8 of Interpretation II stipulates that "the house may be decided to be owned by the investor's children" and the other party shall be given "appropriate compensation" taking into account the age of marriage, childbirth, fault, market price, etc.-the amount of compensation may not be high, but the party who has lived together for many years, has children and has no fault can still claim reasonable compensation.

The nature of the capital contribution was not clearly written at that time. Can you sign a supplementary agreement to confirm it after the divorce?

can be re-signed, but the validity should be marked with a question mark: if both parties (including the couple of children) unanimously confirm afterwards that the capital contribution is a loan or a gift to one party, it is a supplementary confirmation of existing facts and is generally effective; if only the parents and their children unilaterally re-write and the spouse does not approve, the court will review the time of re-signing and the flow of funds, if there is no supporting evidence such as transfer notes and collection records, the IOUs suddenly written before and after divorce are mostly deemed to be made up afterwards and will not be accepted. Instead of making up for it afterwards, it is better to write clearly at that time-the transfer note "loan" or "gift to my son personally" is the most convenient step.

7. Practical Insights from a Lawyer

In this kind of dispute, the first contradiction is always whether the money given by parents is a loan or a gift. From the experience of handling the case, the proposition is that the borrowing party should come up with a loan agreement: a loan note, a loan agreement, a chat record or a transfer note that clearly reflects the meaning of the loan.According to the current rules, if the parents contribute to purchase the house after marriage and there is no clear agreement, in principle, the house will be treated as a gift to both husband and wife, and the house will be divided according to the common property. Only if the parents make full capital contribution and register in the name of one of their children, and there is no agreement to give the two parties, can they be awarded to the children of the investor and give appropriate compensation to the other party. Therefore, first clarify the timing of the capital contribution and the registration status.

Evidence preparation should focus on three key aspects: the source of funds, the registration status, and the agreements between the parties. On the parents' side, they should keep the transfer voucher, the time of contribution, the purchase contract and the real estate certificate. If it is part of the capital contribution or both parents have made money, it is also necessary to clearly correspond to the proportion of capital contribution. Whether the property is registered in whose name, as joint ownership or as sole ownership, directly affects the conclusion. Whether there is a written agreement between the two parties and what the terms of the agreement are must also be determined by referring to the original text. It should be noted that if parents sue for borrowing separately, it will affect the property determination in the divorce case. The factual claims of the two cases should be consistent and not contradictory.

In the negotiation, it is better to discuss the proportion of capital contribution, housing ownership and compensation scheme together rather than hard-hitting on loan or gift. In practice, the more common and more secure way of talking is to determine the housing to one party, according to the capital contribution and joint repayment of the situation to the other party a compensation, and specify the payment period and transfer cooperation. The party who wants to keep the property as much as possible will have to accept more compensation; the party who wants to share more will have to speak with objective materials of capital contribution and registration. In any case, it is best to complete a written agreement in advance and indicate the purpose of the parents' money, and it is often much more difficult to sign it afterwards than in advance.

The characterization of the purchase of a house funded by parents can be summarized in one sentence: there is an agreement from the agreement, there is no agreement to see the time point (before and after marriage), to see the way of capital (full/partial), to see the registration (unilateral/both parties), and to advocate the borrower to prove the evidence. Suggestions to all parties: parents should clearly write down their intention (transfer remarks + written explanation) when making capital contribution, and the nature of capital contribution should be confirmed in time during the existence of children's marriage; In the event of divorce, the proportion of capital contribution shall be calculated first and then the division plan shall be discussed. The house under the name of the party shall be registered with full capital contribution. The other party shall not be expected to leave the house clean. The proportion of part of capital contribution shall be combined factors shall strive for reasonable results. The three types of materials—proof of investment, registration information, and communication records—form the foundation for all aspects of litigation in such cases. Please also remember a yardstick of judgment: whether the "transfer point" coincides with the "written document formation point", whether it is a gift or a loan, is an important basis for the court to identify the true agreement-the closer the two points, the more complete the document, the more credible the claim.