How to divide the financial loss after marriage in Ningbo

After many years of marriage, the husband has been using their joint savings to trade stocks and invest in mutual funds, but the wife believes the risks are too high and has repeatedly tried to dissuade him. The market experienced significant volatility, causing the account balance to shrink from over 800,000 to 300,000. Meanwhile, the couple’s relationship deteriorated, leading to divorce. The wife insists that the husband should be responsible for covering the losses, while the husband argues that the remaining funds in the account should be divided equally. Scenarios like this are not uncommon in divorce counseling. The conclusion first said: after marriage with the husband and wife common property investment income in principle belongs to the husband and wife common property, losses are also shared by both parties, divorce only on the remaining property division. Clarifying the rules for determining profit and loss attribution is essential to avoid suffering a financial disadvantage during property division.

1. Legal Basis: Rules for the Attribution of Investment Profits and Losses

Article 1062 of the the People's Republic of China Civil Code stipulates that the "income from production, operation and investment" during the existence of the marriage relationship is the joint property of husband and wife; Article 1063 stipulates that the premarital property of one party, the compensation or compensation obtained by one party due to personal injury, etc. are personal property. Article 25 of the 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 clarifies that the income obtained by one party's personal property investment during the marriage relationship belongs to "other property that should be jointly owned"; Article 26 further stipulates that the income generated by the personal property of one spouse after marriage, except for fruits and natural appreciation, shall be recognized as the joint property of the husband and wife.

The core logic of this set of rules is: the nature of the property is determined by the source of the funds, while the attribution of the income depends on whether post-marriage labor and management were contributed. Investments made with marital joint property, regardless of whether they generate profits or losses, remain within the scope of the marital joint property. Investments made with premarital personal property retain the principal as personal property; however, any income generated through active management after marriage becomes marital joint property, while any natural appreciation in value that occurs after marriage remains personal property. During divorce property division, Article 1087 of the Civil Code requires that the interests of the children, the wife, and the party without fault be taken into consideration—where “fault” refers to the behaviors listed in the law, such as concealing, transferring, or squandering marital assets; ordinary market losses do not constitute fault.

2. Scenario breakdown: profit and loss allocation in five scenarios

Scenario 1: Using marital joint property to invest in stocks or mutual funds results in losses. Losses shall be borne jointly by both parties; at the time of divorce, only the remaining value in the account will be divided, and the portion that has already been lost will not be subject to division. Whoever operates the account and whoever opens it does not affect the conclusion of joint liability.

Scenario 2: Investing premarital personal property, with its value increasing after marriage.The principal and any natural appreciation (e.g., from a fund held long-term without trading, as market conditions improve) belong to the individual; any gains generated from active buying and selling after marriage are considered joint marital property.

Scenario 3: Investing premarital personal property results in a loss.Losses only reduce the amount of one’s personal property; the spouse is not obligated to compensate the principal. However, if any profits generated prior to the loss have already been incorporated into the common household and consumed, such amounts will not be subject to retroactive recovery.

Scenario 4: One party unilaterally uses a large amount of joint property for high-risk speculation (e.g., leveraging, cryptocurrency trading, or gambling-style investments). If the other party can prove that it has no consent, obviously violates the family's risk tolerance and causes heavy losses, it can claim that the party is at fault and request to divide less in the division; if the circumstances are serious (such as squandering), it can also request to divide the common property in marriage according to Article 10

66of the Civil Code.

Scenario 5: Funds in the financial management account are commingled with the family’s daily income and expenses. After marriage, premarital accounts continue to deposit wages, frequent in and out, and when the flow of funds is complicated, the court may consider part of the funds as common property according to the source of funds, the frequency of account changes and the duration of marriage. This explains why "isolation and trace" is the key to protect premarital financial funds.

3. The boundaries of "loss" claims: what can be claimed and what cannot.

The law does not support a blanket claim that “if you lose, the other party must compensate.” What can claim less points is that the other party has legal faults such as hiding, transferring, selling, destroying, squandering the common property of husband and wife or forging common debts (Article 1092 of the Civil Code), as well as the obvious faults of unauthorized high-risk speculation and imputable responsibility; What cannot be claimed is the loss caused by normal market fluctuations-the decline in the market is an investment risk, not a legal fault. The party claiming fault bears the burden of proof and needs to provide dissuasion records (WeChat chat, recording), transfer and transaction flow, evidence of investment decision-making process, etc. In Ningbo, electronic evidence must retain the original carrier, and screenshots and copies are often difficult to be accepted due to defects in proof (according to the White Paper on Family Trial of Yinzhou Court). Article 6 of the Marriage and Family Interpretation (II) implemented on February 1, 2025 also clarifies: one party uses the joint property of husband and wife to reward on the network live broadcast platform without the consent of the other party, and the amount obviously exceeds the general consumption level of the family and seriously damages the interests of the joint property, It can be regarded as "squandering", the other party can ask the proposal to split or divorce the party less points, no division-"reward-style profligacy" from then on there is a clear basis for the judgment.

4. Common misconceptions and correct answers

Myth 1: Whoever invests bears the losses; if there’s a loss, it’s the other party’s problem.Correct answer: Losses incurred from investments made with jointly owned property shall be borne by both parties, and neither party shall be held solely liable simply because one of them was in charge of the investment.

Myth 2: If premarital property is invested after marriage and incurs losses, the other party must compensate me for the principal.Correct answer: The principal invested from premarital personal property always belongs to the individual; any losses only reduce the amount of that individual’s personal property and cannot be claimed as compensation from the other party.

Misconception 3: As long as an investment results in a loss, it will automatically reduce the other party’s share of the marital property.Correct answer: A party may receive a smaller share of the marital property only if they engaged in high-risk investments without consent and exhibited clear fault (such as reckless spending or malicious disposal of assets); losses resulting from market fluctuations do not constitute fault.

Misconception Four: Whose name the account is registered under, that person owns the money.Correct answer: Funds contributed after marriage using marital property remain marital property, even if deposited into one spouse’s account. In the event of division, the source of the funds, rather than the account holder’s name, is what matters.

Misconception 5: Simply issuing a verbal warning is sufficient to fulfill one’s evidentiary obligation.Correct answer: To assert negligence, you must provide verifiable evidence—such as chat logs or audio recordings—and demonstrate that this evidence corroborates the timeline of the funds transfer and the relevant transaction activities.

5. Operable steps and evidence list

The party asserting division or fault proposes proceeding in five steps:1. Clarify the sources of account funds, Distinguish between premarital personal property, marital joint property, and gifts from parents;2. Print a stamped statement, obtain bank statements, securities account statements, and fund transaction records through the brokerage app or at a branch counter, and calculate the total investment amount and the current market value.3. Determine whether there is any fault., check for unauthorized disposal of assets, frequent high-risk transactions, fund transfers, live-stream tipping, and other such activities;4. Secure the evidence, retain records of dissuasion chats, audio recordings, and materials documenting the transaction decision-making process, and preserve the original media;5. Negotiation or Litigation, If possible, draft a divorce agreement to clearly specify the ownership of the account and the method for determining its monetary value. If no agreement can be reached, file a lawsuit with the court and, if necessary, request the court to obtain the transaction records of the securities account. List of Evidence: Bank statements, securities account statements, fund confirmation slips, wealth management contracts, transfer vouchers, dissuasion records, household income and expenditure ledger, and supporting documents comparing account opening dates with the date of marriage registration.

6. Evidence rules for fault determination and new forms of property

For the claim that “unauthorized high-risk investments constitute negligence” to be upheld, three hurdles must be cleared: first, the factual determination of whether consent was given. Whether the spouse gives informed consent depends on whether there is a communication record in the investment decision-consent includes express consent and implied laissez-faire, and long-term informed non-objection may be regarded as default; For those who advocate authorization, a timeline evidence of "dissuasion first and transfer out later" should be provided. The form of dissuasion should be WeChat, SMS, email and other retentable carriers.Secondly, the professional aspect of risk and loss assessment. Whether is a "high-risk operation that obviously exceeds the family's risk tolerance" can be demonstrated by comparing the leverage ratio, varieties (futures, options, currency circle), single amount and family income in the transaction record; the amount of loss is subject to the statement with seal, and screenshots and oral estimation are difficult to be accepted. Third, the relationship between causality and scope. Only the portion of the loss directly attributable to the wrongful act may be claimed as a reduced share; the portion attributable to normal market fluctuations shall still be treated as joint property.

Key points of evidence collection of new property forms: insurance financing (dividend insurance, annuity insurance, universal insurance) is divided to see the cash value rather than the paid premium, and the other party can be required to disclose the insurance policy and apply to the court to investigate the insurance company; virtual currency account has no central registration, and it is difficult to provide evidence by trading platform records and wallet address, so it is advocated to prevent the transfer of the other party while dividing; the share division of private equity funds and managed products is based on the register of holders and the record of redemptions. What needs to be reminded is that the divorce agreement should clearly state the ownership and discount method of the existing financial account, regardless of whether it is claimed to be "sharing losses" or "sharing faults", and verbally agree that "how to calculate the money in the account" is the biggest source of subsequent disputes. In the lawsuit, you can apply to the court to obtain the transaction details of the securities account and the bank flow of water, and combine the burden of proof with the investigation tools.

Question: If the other party uses marital property to purchase insurance or annuities, can these be divided in a divorce?Answer: Yes, but what is divided is the policy’s cash value, not the premiums already paid. During the marriage, savings-type and annuity-type insurance policies purchased with marital joint property have cash values and associated returns that constitute marital joint property; insurance policies purchased with premarital personal property or protection-type products with a strong personal nature (such as critical illness or accident insurance claims) are not subject to division. A party seeking division may request the other party to disclose the insurance policy and apply to the court to obtain the cash value schedule from the insurance company.

Question: In investment loss disputes, will the court proactively investigate the opposing party’s account?Answer: Generally, investigations are not initiated on the authority’s own initiative; they must be requested by the party concerned. You can apply to the court for access to the other party's bank flow, securities and fund account transaction details, or apply for an investigation order within the period of proof. Under the property declaration system, a party who conceals accounts shall also bear adverse consequences, such as receiving a smaller share of the assets.

Question: If joint marital property is used for an investment that results in a loss, how should this be addressed in the divorce agreement to avoid future disputes?Answer: Clarify three points: the ownership of the existing account balance and current positions, confirmation that historical losses will not be retroactively claimed, and the allocation of future account profits and liabilities. For example, the agreement stipulates: “As of a certain date, the securities account balance shall belong to the husband, and any profits or losses incurred in that account prior to that date have been settled, with neither party seeking reimbursement from the other.” By formally documenting the “portion that has already been lost,” you can prevent the other party from later reneging on the agreement and persistently claiming, after the divorce, that the investment losses should be shared.

Question: After the other party’s investment incurred losses, they became emotionally agitated and also took out a foreign debt. Does this debt qualify as joint marital debt?Answer: It depends on the purpose of the loan. Borrowing for common life or family business is a common debt; borrowing by a party without authorization in the name of an individual for personal speculation and not for the common life of the family is generally not recognized as a common debt, unless the creditor proves that it is used for common life. Those who claim that “investment debts are unrelated to the family” must provide evidence of how the borrowed funds were used and clearly explain where the money went.

Question: After marriage, if jointly owned property is invested and generates profits, how is theValue-addedportion divided upon divorce?Answer: Investment income constitutes joint property and shall be divided together with the principal; after determining the valuation reference date and the account’s market value, it shall be allocated in accordance with the agreed or court‑determined ratio. If the investment includes premarital principal, first allocate the principal based on its source; then treat the post-marriage appreciation as marital property. If necessary, engage an appraiser or auditor to determine the allocated amounts.

Question: The funds in the wealth management account were marital property acquired before marriage and have remained untouched since then. Will they still be subject to division upon divorce? Answer: The principal and natural value-added (the part that is not operated and changes passively with the market) belong to the individual, and will not be divided when divorcing; what needs to be proved is that "no joint capital is invested and no active management is done after marriage", and the flow of water and transaction records are the core evidence. If there were any active transactions during the period, such as redemptions followed by reinvestments, theValue-added portion may be deemed to constituteCommon property.

Case Reference: In the property dispute case following the divorce between Ge and Xu, the court determined that housing provident fund contributions and stock investment income acquired during the marriage constitute marital joint property and should be divided based on the ascertained amounts; the return of the dowry was also addressed in the same proceeding. It is evident that, in principle, any income generated from investments made with marital property after marriage constitutes joint marital property, with both parties sharing the profits and losses. Upon divorce, only the remaining assets are subject to division, and a party may receive a smaller share only if they bear significant fault. Trial Court: People’s Court of Xiangshan County, Zhejiang Province Case Number: (2010) Yongxiangshijia No. 407

7. Frequently Asked Questions

Question: If one spouse incurs financial losses in post-marriage investments, can they request the other spouse to compensate for those losses upon divorce?

Answer: Generally, no. If investments are made using marital property, profits and losses are shared by both parties, and upon divorce only the remaining value in the account is subject to division. Only if the other party engages in unauthorized high-risk investments or commits wrongful acts such as concealing, transferring, or squandering assets may one spouse claim a smaller share.

Question: If a premarital investment account appreciates in value after marriage, to whom does theValue-addedportion belong?

Answer: The principal belongs to the individual; any income generated through active management after marriage is considered joint property, while natural appreciation (i.e., increases in value due to market conditions without any active intervention) remains the individual’s property and must be distinguished based on transaction records.

Question: The other party secretly used the joint marital funds to trade cryptocurrencies and lost all of it—can I get a smaller share as a result?

Answer: Yes. Unilaterally using substantial joint property for high-risk speculation that results in significant losses constitutes a clearly attributable fault, justifying a smaller share upon division; if it can be proven to be wasteful spending, one may also, pursuant to Interpretation (II), claim division during marriage or no division at all.

Question: I’m against his investment, but he won’t listen—how can I gather evidence?

Answer: Use WeChat and SMS to clearly dissuade and keep the original records, record the time and amount of funds transferred out, form the time line of "dissuasion before and transfer out after", and submit the statement together with the lawsuit.

Q: Which court is in charge of financial loss cases?

Answer: It belongs to the division of divorce property, which is under the jurisdiction of the basic court of the defendant's domicile or habitual residence; the parties in Ningbo can file a case online through the online service of the people's court.

8. Practical Insights from a Lawyer

With the account down by more than half, one party demanding that the other “make up the difference” is the most common claim in such disputes, but the approach is often misguided. With the joint property investment of husband and wife, the profits and losses fall into the common property, divorce is usually only the remaining part of the division, not because of the loss of the operating party alone compensation. If you want to claim that the other party is responsible, you can't just say "he has to speculate", but point to him going beyond the scope of normal financial management, punishing him without authorization knowing the risks, or moving common property to do high-risk operations.

In terms of operation, first draw up the flow of the account from the opening of the account to the divorce: where did the principal come from, when did it come in, how much did it come in and out, and how much is left now. To judge whether the principal is common property, the key depends on the source of funds; to judge the attribution of profit and loss, it depends on whether there is labor and common funds invested after marriage. Don't just stare at the loss of the account, the same period of each other's other accounts, financial management, fund profit and loss should be checked together, to prevent only the loss out, the profit hidden. Only by accounting for both sides together can the basis for division be truly accurate.

During negotiations, rather than getting bogged down in who should be held responsible for the losses, it’s better to focus on calculating how much is left and how to divide it. If one party is clearly at fault, this may be cited as a basis for seeking a larger or smaller share of the property, rather than demanding full compensation. During the negotiation, we should also prevent the other party from transferring or redeeming the money in the account while talking about it. If necessary, we should apply for property preservation and evidence preservation for the relevant account. We should first fix the divisible property and then talk about the proportion. By solidifying the current state of the assets, negotiations can avoid being purely theoretical.

The rules of financial management profit and loss after marriage can be summarized as one sentence: determine the nature according to the source of funds, determine the attribution of income according to active management, and determine whether there is legal fault or not. Suggestions to Ningbo parties: pre-marital accounts and post-marital accounts are set up separately, and common income such as post-marital wages are not included in pre-marital financial accounts; Investment accounts keep sealed statements and transaction records; If you oppose high-risk investments, you should leave a record of dissuasion in a proof-of-proof way. When divorcing, sort out the capital chain before deciding to negotiate or litigate. Ordinary losses are not wrongful acts; what can always be asserted is not “compensation for losses,” but rather the legal invalidation of malicious dispositions and wasteful conduct.