Insights

The boundary between the joint property and personal property of the husband and wife in Ningbo.

Ningbo Author：LuXu WANG

for many years after ms. chen's marriage, her husband's income from running the company was relatively high, and her salary was mainly used for the daily expenses of the family. She is unsure whether her husband’s company earnings and stock investment returns constitute marital property, nor is she certain to whom the interest earned on her premarital savings after marriage should belong—during divorce consultations, determining the scope of marital assets often becomes the first issue that needs to be resolved. In a nutshell: During the subsistence of the marriage, wages, bonuses, income from business operations and investments, proceeds from intellectual property rights, and property acquired through inheritance or gift are, in principle, marital property; premarital property, personal articles of daily use, and property designated by will or gift contract as belonging solely to one spouse are considered separate property. In determining the ownership of property, both the time of acquisition and the source and nature of the property must be considered; neither can be omitted.

1. Legal basis: statutory list of joint property and personal property

Article 1062 of the the People's Republic of China Civil Code stipulates that the following properties acquired by the husband and wife during the existence of the marriage relationship shall be the common property of the husband and wife and shall be jointly owned by the husband and wife: (1) salary, bonus and labor remuneration; income from (II) production, operation and investment; income from (III) of intellectual property; property inherited or donated by the (IV), except for the third item of Article 1063 of this Law; (V) other property to be owned jointly.

Article 1063 of the the People's Republic of China Civil Code stipulates that the following property is the personal property of one of the spouses: (1) the premarital property of one of the (II); the compensation or compensation obtained by one of the spouses for personal injury; the property determined to belong to only one of the spouses (III) to the will or the gift contract; the daily necessities for the exclusive use of one of the (IV); (V) other property that should belong to one of the spouse.

Article 25 of the Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Code of the Civil Code of the People's the People's Republic of China of China further clarifies that during the existence of the marriage relationship, the following properties belong to "other properties that should be jointly owned" stipulated in Article 1062 of the Civil Code: the income obtained by one party of the (I) from personal property investment; (II) the housing subsidy and housing accumulation fund that both men and women actually obtain or women should obtain; (III) the basic old-age pension and bankruptcy resettlement compensation that both men and women actually obtain or should obtain.

By comparing the above provisions, three main lines of judgment can be extracted: first, the time standard-whether the property is acquired during the existence of the marriage relationship; Second, the source standard-whether the property comes from labor, management, investment, inheritance and donation or personal attribute compensation; Third, the agreement takes precedence-the written agreement between husband and wife (Article 1065 of the Civil Code) can change the legal ownership. The interplay of these three factors constitutes a comprehensive framework for determining the ownership of marital property.

2. Specific ownership of several types of property: breakdown by scenario

The legal checklist provides the framework; when applied to specific assets, each item still requires individual analysis. Below, we break down common types of disputes:

  1. Salaries, bonuses, and remuneration for services: Any income acquired after marriage shall be deemed joint property, regardless of who holds or deposits it in whose account. The husband’s salary and dividends from the company he manages, as well as the wife’s salary as a teacher, all constitute marital property.
  2. Income from production, business operations, and investments: Any income generated after marriage from operating a company, opening a store, trading stocks, or purchasing mutual funds using marital property or the personal time and effort of one spouse shall be considered marital property. It is particularly important to note that if one party invests with premarital personal property, the investment income generated after marriage still falls under "income from investments" (Interpretation (I), Article 25, Paragraph 1) and is considered joint marital property.
  3. Natural appreciation andinterest of premarital personal property: According to Article 26 of Explanation (I), any income generated from the personal property of one spouse after marriage, as well as any natural appreciation in value, shall still be considered the personal property of that spouse. For example, fixed-term interest earned on premarital deposits after marriage, as well as the natural appreciation of premarital real estate due to market conditions, generally remain classified as individual property. However, if such real estate is rented out after marriage and requires managerial labor, the rental income is more akin to business-related earnings, and the prevailing view in practice tends to treat it as joint marital property.
  4. Income from intellectual property: According to Article 24 of Interpretation (I), "income from intellectual property" refers to the property income that has been actually obtained or has been clearly ascertainable during the subsistence of the marital relationship. If a work is completed before marriage and the author receives the manuscript fee after marriage, and it was already clearly ascertainable during the marriage that such payment would be received, then the fee shall be regarded as joint marital property.
  5. housing accumulation fund, pension insurance: the part actually acquired or should be acquired during the existence of the marriage relationship belongs to the common property (Article 25 of the (I) of interpretation), the balance of the accumulation fund account can be divided at the time of divorce, and the part of the pension personal account corresponding to the marital years is also included in the division.
  6. Inherited or gifted property: By default, it is considered marital property, unless the will or gift agreement explicitly states that it “belongs solely to one party.” This is the only legally recognized way for parents to protect their children’s inheritance from being divided in a divorce; the stipulation must be clearly documented in writing, as verbal assurances are not valid.
  7. Compensation for personal injury, medical expenses, and disability compensation: It is of a personal and exclusive nature and constitutes personal property (Article 1,063, paragraph 2 of the Civil Code).
  8. One-time payments such as military demobilization allowances and self-employment benefits: The portion calculated by multiplying the duration of the marriage by the annual average is considered joint property of the spouses (Interpretation (I), Article 71); the remaining portion belongs to the servicemember individually.

In addition, there is a high-risk scenario in practice that requires separate notification:A house purchased with personal funds after marriage but registered in the spouse’s name.. In judicial practice, in the absence of evidence establishing a clear agreement for the gift of personal property or a nominee holding arrangement, there is a risk that the property will be deemed to be marital joint property. The investor should retain documentation of the source of funds at the time of contribution and, where possible, clearly document the nature of the contribution in writing (e.g., as a loan, nominee holding, or gift) to avoid difficulties in providing proof at a later date.

3. The "transformation of form" and commingling risks of premarital property

Pre-marital property does not automatically become marital property simply because its form changes, but commingling can create evidentiary challenges. Typical scenarios include: transferring premarital deposits into a new account after marriage, withdrawing and re-depositing them into different accounts; using premarital savings to purchase stocks or real estate after marriage; selling premarital property after marriage and then purchasing a new home, among others. The legal rule is clear: as long as the source of the funds can be proven, a change in the form of premarital property does not alter its status as personal property. However, the crux lies in the “proof”—if the funds are commingled with post-marriage joint income in the same account and are repeatedly transferred in and out, making it impossible to distinguish them, the court will have no choice but to treat them as marital property. Therefore, retaining original supporting documents such as the house purchase contract, bank statements, and transfer records is a crucial step in safeguarding premarital property.

Conversely, there is also a reverse form of confusion: for example, whenjoint income after marriage is deposited into one spouse’s personal account, or when rental income from premarital property is used to repay the mortgage, this can likewise blur the boundaries betweenCommon property and individual property. The party asserting its rights in a divorce proceeding should establish a complete chain of evidence regarding the sources and flows of funds, and, where necessary, request the court to investigate the other party’s bank accounts, securities accounts, corporate equity interests, and other property-related information.

4. Analysis of Common Misconceptions

Misconception 1: After marriage, if each spouse manages their own salary separately, it is considered personal property. Error. After marriage, regardless of who manages the wages or whether each spouse has independent control over them, such income is considered marital property unless there is a written agreement to the contrary.

Misconception No. 2: Rental income from a premarital property leased out after marriage is considered personal property. Error. After marriage, renting out a property typically requires time and effort to manage; rental income is generally regarded as business income and thus considered marital property. In the extreme case where the property is entirely entrusted to a real estate agent for management with no personal involvement or investment, there may be some room for debate, but the prevailing view still tends to classify it as joint property.

Misconception 3: If premarital savings are transferred into a joint account once after marriage, they automatically become marital property. Error. As long as the source of funds can be proven, premarital savings do not lose their character as personal property merely due to a change in form; be sure to retain records of any transfers and bank statements.

Misconception 4: Inherited property from one’s parents after marriage is automatically considered joint marital property.Inaccurate. In the absence of a will or if the will does not make specific provisions, any inheritance acquired during marriage shall be considered joint property; however, if the will expressly states that the inheritance is to belong solely to one spouse, it shall be deemed the individual property of that spouse. If you wish to leave personal property to your children, be sure to specify this in your will.

Misconception 5: As long as it is registered in your name, it is your property. Error. During the subsistence of the marriage, real estate and vehicles acquired with marital property and registered in the name of one spouse still constitute joint property; the name on the registration record does not determine ownership.

5. from Proof to Segmentation: Comparison between Operation List and Common Mistakes

Whether through negotiation or litigation, the outcome of property ownership disputes hinges on the presentation of evidence. It is suggested to proceed according to the following operation list: first, inventory-list two lists of premarital property and newly added property of both parties, indicating the acquisition time, source and voucher deposit place; The second step is to fix-keep the original materials such as house purchase contract, bank flow, gift contract, copy of will, equity certificate, etc., involving a separate book of personal property investment; Step 3, distinguish-characterize each property according to the standard of "time + source". If you are not sure, make a conservative plan according to "may be identified as common". The fourth step is to check-such properties as provident fund, pension, medical insurance personal account, securities account, overseas assets, etc. that are easy to be missed are included. The fifth step is to investigate-if the other party conceals property, apply to the court to investigate the registration information of banks, securities and real estate, apply for an investigation order if necessary.

In the qualitative aspect, we also need to compare a group of misunderstandings that are easy to confuse: Misunderstanding 1, the salary that each manages after marriage is personal property -- the salary after marriage is common property no matter who keeps it; Misunderstanding 2, the rent of the house property before marriage and after marriage is personal property -- the rent put into management and operation after marriage is generally recognized as common property; Misunderstanding 3, pre-marital deposits become common property after marriage-the source of funds can be proved, and the attribute will not be changed due to form conversion; Misunderstanding 4, who is registered in whose name-the common property is purchased in marriage and the property of one party registered is still common property; Misunderstanding 5, only divorce judgment can check property-if one party in marriage hides and transfers large amount of common property, the other party can request division within marriage according to article 1066 of the civil code, no need to wait for divorce. Behind each set of misunderstandings is the dislocation of "form" and "substance": the law values the time of acquisition, the source of funds and the state of agreement, rather than whose card the money is placed in and whose name the house is written in.

6. Use written agreements to clarify ownership: lists of personal property and prenuptial/postnuptial agreements.

Beyond the statutory rules, spouses may also, by written agreement, alter the ownership of their property. Article 1,065 of the Civil Code provides that the parties to a marriage may agree that premarital property and marital property shall be owned separately by each party, jointly by both parties, or partly by each party and partly jointly. Such agreements shall be in writing and shall be legally binding on both parties. This provides the most definitive solution for property with “blurred boundaries”: rather than arguing afterward about whose money it is, it is better to specify this in advance through a written agreement.

There are two types of written arrangements that are most commonly used in practice: one is the marital property agreement, which clearly stipulates the ownership of specific real estate, deposits and equity, which is applicable to the situation where one party has obviously more property and wants to isolate risks; the other is the personal property list, which lists the pre-marital deposits, pre-marital real estate and donated property item by item and attaches the certificate index, and both parties sign and confirm it as the benchmark for future attribution. The purpose of the inventory is not to create rights, but to establish the factual determination of “what constitutes personal property,” thereby avoiding difficulties in producing evidence over time.

What needs to be prompted is the boundary of the written arrangement: firstly, the agreement should not harm the interests of the third party-the "clean-out" agreement signed to avoid debts can not fight against creditors, and may be revoked by creditors; secondly, for the agreement involving the change of property ownership, it is better to register the change of property rights at the same time, otherwise the public status is inconsistent with the agreement, and there is still the risk of being punished and executed; third, once the agreement is made, the repentance needs to have legal reasons (fraud, coercion, obvious unfairness) and in the period of exorcism, the written agreement itself has a strong stability-this is the "prior agreement is better than after the quarrel" system logic.

class case reference: in the case of property dispute after the divorce between Zhu and Zhou, although the house was built on one floor before marriage, it was rebuilt twice after marriage. the court determined that the three three-storey houses and the vehicles purchased after marriage were the common property of husband and wife, and they were divided together. It is evident that determining property ownership depends both on the time of acquisition and on the source and nature of the property; the transformation and commingling of premarital property after marriage are key factors in distinguishing between individual and marital property. Trial Court: People’s Court of Xiangshan County, Zhejiang Province Case No.: (2014) Yongxiangximinchu No. 47

7. Frequently Asked Questions

Is the equity in my husband’s company considered marital property?

is divided into two levels: whether the company's equity itself (shareholder qualification) is jointly disputed, but the dividends based on equity and the investment income corresponding to equity appreciation during the existence of the marriage relationship belong to the joint property of husband and wife; if both parties agree through consultation during the divorce, the equity can also be divided directly as the common property, but the preemptive right of other shareholders and the conformity of the company shall be dealt with according to the procedure of the company law.

If a house was purchased before marriage and the mortgage is paid off by one spouse after marriage, does the house still belong to that individual?

The ownership of the house shall remain with the party who purchased it before marriage; however, upon divorce, the other party is entitled to compensation for the principal and interest repaid using marital joint property after the marriage, as well as for the corresponding increase in value. This type of situation—purchasing a property before marriage and continuing to repay the mortgage after marriage—is one of the most common sources of disputes among families in Ningbo. It is advisable to keep records of the source of funds used for mortgage repayments.

Who is the interest and financial income of the premarital deposit

Interest earned on deposits constitutesinterest and belongs to the individual; if financial products purchased with pre-marital savings require active management, the resulting income is more akin to “income derived from investment” and is therefore more likely to be classified as joint marital property.The dividing criterion lies in whether the income is "naturally generated" or "put into operation".

8. Lawyer's Practical Insights

To find out the scope of the property, it is not by reciting the law, but by "going through the account" of the family's money ". It is recommended to make a list of property first, listing the real estate, vehicles, deposits, stock funds, company equity, provident funds, and pensions under the names of both parties, indicating the time of acquisition and the source of funds. Wages, business investment income, intellectual property income and inherited property acquired after marriage are, in principle, common property. To judge attribution, both time and source should be looked at, and mistakes may be made without one.

The most common issues are “confusion” and “morphological transformation.” Pre-marital deposits are invested after marriage, pre-marital property is sold and then bought a new house, and repeated transfers between personal accounts and common accounts can blur the original clear attribution. Therefore, it is necessary to keep evidence of the flow of funds on a daily basis and remember which money came from before marriage, where it was transferred and what it was bought to form a traceable chain. If the two parties have another written agreement on certain property, the agreement takes precedence. A marital agreement that clearly states the ownership is often much more convenient than holding different opinions afterwards.

There should be a division of responsibilities in presenting evidence. If a property is claimed to be personal property, it shall bear the burden of proof and produce the pre-marital source and the special certificate of the special fund; if it is claimed to be common property, it shall also state the time and source of acquisition. If it is suspected that the other party may conceal property, apply for a property declaration or investigation order in a timely manner to spread the scope of the inquiry. By sorting out the list and evidence before negotiation or prosecution, your confidence in the division comes from "calculating clearly", not "shouting loudly". In addition, if both parties have already made a written agreement on the ownership of a certain property, they should take out the agreement as soon as possible. Don't let the agreement lie in the drawer and give up a ready-made grasp in vain.

The core of the determination of the property ownership of husband and wife is the double standard of "time + source": the property acquired before marriage, personal exclusive property and will gift clearly belongs to only one party belongs to the individual; the income from labor, business and investment in marriage and the inherited and donated property without special designation belong to the common. For the parties concerned, the three most pragmatic steps are: the first step is to sort out the list of premarital property and keep the original documents when the relationship is still good; The second step is to fix the nature of capital contribution and the ownership agreement in writing if large amount of personal property investment and house purchase are involved. The third step is to make a written arrangement through the marital property agreement (Article 1065 of the Civil Code) if there is a real need for isolation. The law protects rights that can be proven; written evidence and transaction records are far more reliable than verbal promises.