Insights

Ningbo these kinds of property divorce without division

Ningbo Author：LuXu WANG

Not everything needs to be divided during a divorce. There are several categories of property that the law expressly designates as belonging to one spouse alone and which are not subject to division in the event of divorce. To begin with the conclusion: Article 1,063 of the Civil Code designates five categories of property as the personal property of one spouse—namely, premarital property, compensation or damages received by one party due to personal injury, property specified in a will or gift contract as belonging solely to one party, personal articles for daily use, and any other property that should be deemed the personal property of one party. In principle, anything that falls under this provision is excluded from the scope of division; whether it does so hinges on the time of acquisition, the reason for acquisition, and whether there is a clear “personal designation.”

1. First categorize, then discuss division: the basic framework for qualitative analysis.

During divorce, marital property is subject to division; however, the law also specifies certain types of property that are exclusively owned by one spouse. Article 1,062 of the Civil Code specifies the scope of jointly owned property: wages, bonuses, and remuneration for services; income derived from production, business operations, and investments; proceeds from intellectual property rights; property acquired through inheritance or donation (except where a will or gift contract designates it as belonging solely to one spouse); and any other property that should be jointly owned. To determine whether property should be divided, follow this three-step process: First, ascertain whether the property falls within the scope of jointly owned property as defined in Article 1062; second, examine whether any of the circumstances set forth in Article 1063 apply, rendering the property individually owned; and third, verify whether there exists a written agreement regarding property matters between the spouses pursuant to Article 1065. The characterization is wrong, and the following points are all partial.

a common intuition needs to be corrected: "acquired after marriage" is not equal to "common property". Precisely because Article 1063 exists, property acquired during marriage through gift, bequest, or compensation—provided it meets the statutory requirements—remains the individual property of the recipient, even if it was acquired during the subsistence of the marriage. Similarly, the property acquired before marriage belongs to the individual in principle, but the income generated after marriage should be judged separately-according to article 26 of the (I) on the interpretation of marriage and family, the income generated after marriage of personal property is generally recognized as the joint property of husband and wife, except for the interest and natural appreciation. for example, the interest of pre-marital deposits belongs to the individual, while the rental income of pre-marital real estate after marriage is usually treated as joint property.

2. Personal injury compensation: exclusivity and remedial nature

Article 1063, item (II) of the Civil Code stipulates that compensation or indemnity obtained by one party due to personal injury shall be the individual property of that spouse. Such funds are of a personal and compensatory nature and belong solely to the injured party; they are not subject to division in the event of divorce. Examining the elements separately: with respect to the subject, it must be obtained by one spouse personally as a result of personal injury; in terms of its nature, it must constitute compensation or indemnity; and with regard to its source, there must be a direct causal link to the personal injury. In cases of work-related injury compensation, traffic accident claims, or tort liability, expenses such as medical fees, nursing care costs, disability compensation, costs for assistive devices for the disabled, compensation for mental distress, and subsequent treatment costs are all of a personal nature and shall not be included in the scope of division of jointly owned property. Compensation received for property damage (such as vehicle repair costs) is not included herein and shall still be determined according to the nature of the property.

It is important to distinguish between lost‑earnings compensation: it compensates for the income that would have been earned during the period of injury. Since income earned during the marriage is, in principle, considered joint property, lost‑earnings compensation may, in practice, be deemed to constitute joint property; however, judicial rulings vary across jurisdictions. For this reason, the list of compensation items in the compensation mediation, judgment or agreement must be properly retained, and the division must be matched item by item, which is more convincing than the general claim that "the whole sum is mine. Similarly, life insurance proceeds received due to illness, accident, or disability are personally owned by the insured and have a personal nature; however, investment-linked insurance policies purchased during marriage with marital property and having a cash value are subject to separate treatment of their cash value in accordance with the policy terms (see the dedicated article on insurance division in this series).

3. Property designated in a will or gift as belonging solely to one party.

Article 1,063, item (III) of the Civil Code stipulates that property designated in a will or gift contract as belonging solely to one party shall be considered personal property. The core element here is the word "definite": there must be a clear statement on the carrier such as a will, a gift contract, a notarized document or a transfer note, indicating that the property is only given to one of the spouses and has nothing to do with the spouse. The will clearly "inherited by the granddaughter, not owned by his spouse", the property is not divided in the event of divorce.

The oral expression "only for so-and-so" is almost unacceptable in litigation. There are three prudent approaches: First, put the will and gift agreement in writing and, where possible, have them notarized; second, transfer large sums of money via bank transfer and include a note stating “This gift is made solely to [Name], and does not constitute marital property”; third, deposit the funds into the donee’s separate account and retain complete records. For matters related to the purchase of a house contributed by parents, see also Article 29 of the Interpretation (I) for Marriage and Family: If parents contribute to the purchase of a house by both parties before marriage, the contribution shall be recognized as a gift to their own children, except where the parents clearly indicate that the gift is given to both parties; If the capital contribution is made after marriage, there is an agreement from the agreement, if there is no agreement or the agreement is unclear, it shall be handled according to the rules on the donation of common property.

Property corresponding to 4. special daily necessities and personal debt

Item (IV) of Article 1063 of the Civil Code lists the daily necessities dedicated to one party as personal property, and the requirements are "dedicated" and "daily use", which usually refer to the articles with low value, such as clothes, cosmetics and professional tools, which serve the daily life of one party. If valuable jewelry and famous watches and bags obviously exceed the needs of life and have the attribute of investment preservation, they may be recognized as the common property of husband and wife in practice instead of simply classified as "special daily necessities". This is the most common dispute point. When dividing, specific judgment must be made in combination with the purchase purpose and usage. It is suggested to keep the purchase certificate to explain the purpose and source.

The problem corresponding to personal debts is the same: the debts incurred by one party before marriage and the personal debts not used for living together after marriage shall be paid off by his personal property according to the rules of Article 33 of the (I) for the Interpretation of Marriage and Family, which are not naturally borne by the common property of husband and wife; the corresponding formed or corresponding property shall not be divided as common property. The core of the judgment is whether the funds flow into the family to live together, which can be mutually confirmed by the use of the loan, the whereabouts of the funds and the level of the family's expenditure in the same period.

5. Key points for presenting evidence regarding these types of property.

The focus of the category of personal injury compensation is to split the compensation items. Medical expenses, disability compensation, and mental damage compensation have personal exclusiveness and belong to individuals; there are disputes about the nature of lost work expenses, so the item details in the mediation or judgment must be kept intact. In matters involving wills or gifts, the key issue is whether there is a specific designation: property explicitly designated as belonging solely to one spouse shall be that spouse’s separate property; if no such designation is made, property acquired during marriage through inheritance or gift shall, in principle, be considered marital property. A sentence in the family inheritance arrangement often determines the amount of money.

It is suggested that the evidence materials should be collected according to the list: first, the category of personal compensation, retaining the original compensation agreement, mediation statement or judgment, the bank flow of money to the account, the detailed list of compensation items and medical bills; second, the category of testamentary gifts, retaining wills, gift contracts, notarized documents, screenshots of transfer postscript and the flow of donated accounts; third, the category of qualitative auxiliary, retention of marriage registration time certificate, property acquisition time certificate, husband and wife property agreement. The party that has fully prepared the evidence will take the initiative during the court’s examination of evidence, thereby avoiding the passive position imposed by the principle of “who asserts must prove.”

6. Case Verification

According to analogous judicial precedents, the woman was awarded approximately RMB 460,000 in compensation for medical expenses, disability compensation, and mental distress damages arising from personal injury. Upon divorce, this sum was recognized as her personal property due to its personal nature and was not included in the division of marital assets; the man’s claim for a 50% share was entirely dismissed.

According to the rules of similar adjudication, when the elders make a will, it is clear that a set of real estate is inherited by the granddaughter and does not belong to his spouse. In divorce proceedings, the real estate is not divided as common property. In contrast, another deposit of about 300000 yuan in the same estate that is not designated by an individual is still treated as common property because the inheritance occurs during the existence of the marriage relationship. Both cases demonstrate that the completeness of qualitative evidence directly determines the conclusion regarding property ownership.

7. Risk Warning

  • Treating personal injury compensation as joint property and dividing it while disregarding the specific nature of each compensation item.
  • The testamentary gift is not clearly attributed to only one party, resulting in the marital inheritance being presumed as common property.
  • If you fail to distinguish between personal and shared interests from the outset, your negotiating leverage is flawed from the very beginning.
  • Disregarding personal assets and footing the bill for the other party’s premarital debts.
  • Confusing special-purpose items with valuables, and lumping “everyday necessities” together with “investment goods.”
  • verbally promised to "only give it to me personally", and the lawsuit was lost because there was no proof.

8. The boundary between premarital property and postmarital income

Item (I) of Article 1063 of the Civil Code lists one party's premarital property as personal property, but the attribution of the income generated by the premarital property after marriage shall be judged separately according to Article 26 of the Interpretation (I) of the Marriage and Family Code: the income generated by one party's personal property after marriage shall be recognized as the joint property of husband and wife, except for fruits and natural appreciation. Three typical situations are split: first, the pure fruits such as interest on pre-marital deposits and national debt interest belong to individuals; Second, the natural appreciation of pre-marital real estate due to the rise of market conditions belongs to individuals; Third, the "operating income" such as dividends obtained after pre-marital equity and rent collected from pre-marital real estate rental is usually recognized as common property according to investment income due to the need to invest in management or based on investment relationship, among them, the nature of rent is divided in practice, and many courts tend to treat rents that need to be continuously managed as investment income.

If the house is purchased separately with the full amount of the house price after the pre-marital house is sold, it belongs to the form transformation of personal property: if it can prove that the new house price is all from the pre-marital house price and the capital chain is complete and closed, the corresponding part of the new house can still claim to be personal property; if the payment is mixed with the joint deposit after marriage and the source cannot be distinguished, it may be treated as a common property as a whole. Another set of rules applies to the situation of mortgage purchase before marriage and joint repayment after marriage: the house itself belongs to the individual of the registered party, but the joint repayment after marriage and its corresponding value-added part belong to the common property, and the property right will compensate the other party in the event of divorce. The compensation amount is usually converted according to the idea of "joint repayment of principal and interest ÷ 2 × (present value of the house ÷ purchase cost)"-this kind of compensation and housing ownership are two levels, don't misread "the house belongs to me" as "all the value added belongs to me".

Risk control of 9. personal property mixing and transformation

The greatest enemy of personal property is commingling. Personal compensation, donated funds and the joint income of husband and wife enter the same account for repeated withdrawal. A few years later, they claim that "this money is mine" and often lose the lawsuit because they cannot be distinguished. The funds in the personal property account are used to pay for large family expenses (down payment for house purchase, decoration, children studying abroad). If there is no written agreement or remark, it may be presumed as an investment or even a gift to the family. There are three operations to control the risk of mixing: first, personal property is opened separately, earmarked for special purposes, and compensation and grants are not mixed with common income such as wages; Second, when large amounts of personal property are disposed of, complete documents of capital flow (source account, destination account and purpose remarks) are retained; Third, if considerable property has been accumulated before marriage, a written agreement on marital property shall be signed (Article 1065 of the Civil Code), write down the property, deposit and equity ownership that are easy to confuse at once-the agreement is binding on both parties in written form, and the proof is stronger after notarization.

10. Frequently Asked Questions

Does the divorce of personal compensation need to be divided?

No. Compensation for personal injury is exclusive and belongs to the injured party; however, the cost of lost work is to cover the loss of marital income, which is controversial in practice, and the details of compensation must be kept clear.

Is the property given by the will common?

If the will clearly belongs to only one party, it is personal property; if there is no personal designation, the inherited property acquired during the marriage shall be treated as common property in principle.

Are personal items considered separate?

Personal items used exclusively by one party shall belong to that party and are not subject to division; valuable items that clearly exceed everyday living needs and have an investment nature may be deemed joint property.

What about personal debt corresponding to property?

For debts borne by individuals before marriage or by agreement, the corresponding property and settlement are generally not mixed with the other party; except for those that cannot be split if the fund uses are mixed.

Who does the parents pay for the house?

Pre-marital capital contribution is generally recognized as a gift to one's own children; post-marital capital contribution has an agreement from the agreement, and if there is no agreement or the agreement is unclear, it is better to let the parents state the nature of the capital contribution when transferring the money.

Should the rental income from a pre-marital property be divided after marriage?

Depending on nature. Article 26 of the (I) of interpretation of marriage and family divides the income after marriage into three categories: interest, natural appreciation to the individual, and investment income to the common. Whether rental income constitutesinterest (fruits of property) is a matter of ongoing disagreement in practice. For commercially rented properties that require continuous management, many courts treat such income as investment returns and classify it as joint marital property. The party asserting that the rental income should be considered personal property bears a heavier burden of proof; therefore, it is advisable to maintain separate account records and preserve evidence of management expenditures.

After premarital property is exchanged for a new home, does it still qualify as personal property?

It depends on whether the funding chain can be closed. If it can be proven that the entire purchase price of the newly acquired property originates from the proceeds of premarital assets, with no post-marital funds commingled, the corresponding share shall still be regarded as the individual’s personal property. Where payments are made by commingling with joint savings and cannot be distinguished, they are generally treated as marital property; the payment vouchers and transfer notes serve as crucial evidence in determining the nature of the funds.

XI. Practical Insights from a Lawyer

The most easy thing to be taken away when negotiating is the other party's sentence "Everything is common when you get married". In fact, the law clearly delineates several types of property that belong exclusively to one party and does not participate in the division in the event of divorce, including premarital property, compensation or compensation for personal injury, property that is determined to belong only to one party in a will or gift, and household items for the exclusive use of one party. Judging whether something belongs to oneself depends on the time of acquisition, the reason for acquisition and whether there is a clear indication of "only one party", not how much it is worth. First of all, to classify one's property according to these three items is the homework that must be done before sitting down and talking.

After classification comes the presentation of evidence. To claim that a property belongs to an individual, it must be proved from the source: obtained before marriage, with the registration time and purchase certificate. Many people suffer losses because they "cannot tell the source". The money is on the account, but the source is a few mixed transfers, which can only be said roughly. Therefore, in the preparation stage, the corresponding documents of each type of property are filed separately, which is much more useful than a general list, and can withstand the questioning of the other party.

We also need to guard against the secret door of "transformation. Once personal property is mixed with common property, or is voluntarily changed in ownership and sold and then invested, it may no longer be personal property. Therefore, during the negotiation period, two things should be kept: do not easily merge the funds of personal property into the joint account to purchase new assets, and do not sign a general "equal distribution of all property" clause in the agreement. If the other party tries to use "this is common property" to reduce your share, you use the time and source of acquisition to pull the qualitative back.

The exclusive property that is not divided in the divorce includes: one party's personal injury compensation, will or gift to determine the property that only belongs to one party, special daily necessities, and the property corresponding to the debt that is clearly borne by the individual. First qualitative and then talk about points, can save a lot of useless controversy. The general advice to the parties is: when the marriage involves personal compensation and large amount of property, the evidence chain of "personal attribute" should be made solid from the date of acquisition-separate account, clear writing and mark on the certificate, which is much more effective than temporary supplementary certificate at the time of divorce.