Insights

Can parents spend the inheritance of Ningbo children for him?

Ningbo Author：LuXu WANG

When the old man dies, he leaves a sum of money, a house, which is given to the underage child by will or legal inheritance. As soon as the money came in, his parents immediately used it to pay off their mortgage, cover business losses, and even transferred it straight into their own accounts. Parents often think quite straightforwardly: “We gave birth to our child, so isn’t their money just ours?” However, this notion does not hold up legally. The inheritance received by a child becomes the child’s own property from the moment the inheritance is initiated; at this stage, the parents act as legal guardians and custodians, but they are not the owners. Custody does not equate to ownership, nor does it entitle one to dispose of the property at will. “Can parents spend the inheritance their child has received?” The standard answer is just one sentence: It cannot be treated as their own money; it may only be used for the child’s own benefit.

1. To whom does the property inherited by the child belong?

Let’s start with a premise: the right of inheritance is unrelated to age. Article 13 of the Civil Code stipulates that a natural person has civil rights capacity from birth until death; Article 16 provides that, in matters involving the protection of a fetus’s interests, such as inheritance and acceptance of gifts, the fetus is deemed to have civil rights capacity. In other words, even if a child has just been born or is still in the womb, as long as the relevant conditions are met, the child can become an heir or a beneficiary and thereby acquire ownership of the estate. Whether a fetus in its mother’s womb can inherit property is safeguarded by this provision, together with Article 1,155.

Article 1,127 of the Civil Code designates children as first‑order statutory heirs and explicitly stipulates that “children” include legitimate children, illegitimate children, adopted children, and stepchildren who have been financially supported by the deceased. Any inheritance received by a child shall be the child’s personal property and shall not be subject to any “conversion” simply because the child is young or because the parents have paid child support.

The second premise is that a child’s acceptance of a gift or any act that confers a pure benefit can take effect independently. Article 19 of the Civil Code provides that minors aged eight or above are persons with limited capacity for civil conduct and may independently engage in civil legal acts that confer only benefits; those under the age of eight shall have their civil legal acts performed by their statutory agents. The law is lenient to minors in matters such as inheritance and donation.

When we consider these two points together, the conclusion becomes clear:Property owned by a child is the child’s personal property and is separate from the parents’ property.The father, mother, and child each have their own property; the three are on an equal footing rather than in a hierarchical relationship.

In practice, the most common source of confusion is “registered in whose name.” If the money inherited by a child is deposited into the parents’ bank account, and the property is registered in the parents’ name, does that mean it automatically becomes the parents’ property? No, it does not. Registration is merely a public declaration of rights and does not alter the factual origin of the funds—namely, that the money originally belongs to the child. When parents deposit the child’s funds into their own account, this constitutes a matter of how the funds are held in trust, rather than a transfer of ownership. Conversely, a house purchased with the couple’s joint property and registered in the child’s name does not automatically constitute the child’s personal property; its nature depends on the true intention of the parties at the time of the contribution (see Section VI for details).

2. what parents can and cannot do

What are parents to their children? The law defines them as guardians. Article 27 of the Civil Code states that parents are the guardians of minor children. Article 34 stipulates that the duty of the guardian is to act on behalf of the ward in carrying out civil legal acts and to protect the personal rights, property rights and other legitimate rights and interests of the ward; if the guardian fails to perform his duties of guardianship or infringes upon the legitimate rights and interests of the ward, he shall bear legal responsibility.

It is Article 35 that truly draws the red line. Article 1 provides: A guardian shall perform guardianship duties in accordance with the principle of acting in the best interests of the ward; except where necessary to safeguard the ward’s interests, the guardian may not dispose of the ward’s property. Paragraph 2 provides: When fulfilling their guardianship duties, a minor’s guardian shall, when making decisions concerning the minor’s interests, take into account the minor’s age and intellectual capacity and respect the minor’s genuine wishes. To put it simply, three sentences-according to the principle that is most beneficial to the child, the child's property can only be moved for the child, and the child's own opinion should be listened to at the right time.

So what can parents do? Manage, protect, preserve value, and take care of their children’s affairs. Specifically, it includes: keeping the inherited deposits, real estate, and bills for the child; registering, opening an account, and collecting in the name of the child; using the child's property to pay the child's own living expenses, tuition, medical expenses and other necessary expenses; in order to prevent the child's property from shrinking And make a steady hedging arrangement. Article 16, paragraph 7 of the Law on the Protection of Minors also requires guardians to "properly manage and protect the property of minors".

What cannot be done is an entire column: embezzlement, embezzlement and appropriation; dispose of the child's property for one's own benefit or the benefit of others; give it to others without compensation and transfer it at an obviously low price; take the child's house and savings to guarantee the debts of parents or others. Article 17 of the Law on the Protection of Minors explicitly prohibits guardians from “illegally disposing of or misappropriating a minor’s property, or exploiting a minor to obtain improper benefits.”

It is also important to note the meaning of the term “disciplinary action.” It is not limited to “sale,” but encompasses both factual disposals (demolition, processing, consumption) and legal disposals (sale, mortgage, gift, creation of encumbrances). Pledging a house owned by a child constitutes a typical legal disposition; similarly, directly spending the funds in the child’s account also amounts to a disposition of the child’s property. Whenever there is a “disciplinary action,” it must be assessed against Article 35: Was it done for the sake of the child?

What is 3. "for the benefit of the child"

The crux of this section lies in the five characters “for the child’s benefit.” It is not a slogan, but a method of judgment. The general principle is to maximize the interests of the ward, that is, to maximize the interests of children. In making the determination, a formal standard shall be applied based on “the level of care that a reasonable person would exercise in managing their own affairs.” It is not required that every arrangement directly generate financial gains for the child; reasonable indirect benefits are permissible, as is acting out of a genuine intention to act in the child’s best interests.

These are generally considered to be "for the benefit of the child": the child's own tuition, textbook fees and reasonable interest class fees; the child's medical expenses, rehabilitation expenses and necessary insurance premiums; the child's basic living expenses and daily expenses; stable deposits, treasury bonds and low-risk financial management in order not to devalue the child's money.

These are usually not considered to be "for the benefit of the child": mortgage the child's house and guarantee the loan for the business run by the parents; invest the child's money in high-risk projects and fill the fund gap of the parents' company; provide guarantee for the parents' own debts or the debts of the third party; sell the children's things obviously lower than the market price, or give them away altogether; use the money your child inherits for your parents' own consumption-changing cars, traveling, buying your parents' personal belongings, and turning around your adult siblings.

Why is this the case? Because Article 35 establishes “the best interests of the child” as the sole criterion; any expenditure that does not directly benefit the child constitutes an infringement upon the property of the person under guardianship by the guardian. In practice, evidence is also involved: the guardian claims that a certain punishment is for the benefit of the child, and the guardian should explain the purpose and provide evidence. If the guardian cannot tell where he is going and does not need the child, it is easy to be identified as abuse of guardianship. Therefore, every expenditure must be clearly recorded and vouchers must be left.

Cross-cutting issues in 4. divorce

When parents divorce, when such disputes are high, three levels of relationship should be dealt.

First layer: A child’s property does not constitute marital joint property and is not subject to division in the event of divorce. The object of divorce division is the joint property of the husband and wife, while the property under the child's name, acquired by inheritance or gift is the child's personal property, and the two are not things on the same plate. Even if the money is kept by one party all the year round and stored in one party's account, it cannot be divided as common property at the time of divorce. To "raise it to calculate common property" is essentially an embezzlement of the child's property, which should be returned and compensated.

the second layer: what should be done if "house is given to children" is written in the divorce agreement? this kind of agreement is usually related to the dissolution of marriage, child support, alimony, property division and mutual conditions, which is closer to the third party contract in nature, from which the child obtains the claim right to request one parent to perform the payment. Neither parent may unilaterally revoke it; if one party fails to perform, the other party or the child may request specific performance or compensation for damages. What needs to be reminded is that before the transfer of rights such as transfer of ownership is completed, the child is mainly given the right of claim. Whether the child can confront the third party when it is executed should be judged in combination with the registration and possession situation. Therefore, the sooner the child is agreed to go through the formalities, the safer it will be.

the third layer: what should one party do with the property of the child without authorization? The other party can claim return and compensation from the position of the child; if the circumstances are serious, he can apply for revocation of the guardian's qualification, change the relationship of custody or guardianship, and can apply for the preservation of the behavior before and during the lawsuit, and control the property first. It needs to be emphasized that separation between husband and wife, snatching and hiding children during divorce cannot be the reason for one party to dispose of the children's property; disputes should be resolved through the withdrawal of guardianship, suspension of visits, change of custody, etc., rather than the child's property.

Legal Consequences of 5. Parents' Unauthorized Spending

  • Return and Indemnity. If parents dispose of a child’s property without acting in the child’s best interests, such conduct constitutes an infringement upon the child’s property rights. The child (represented by the other parent or the newly appointed guardian) may seek the return of the property and compensation for any losses incurred. This is a genuine civil liability and cannot be excused simply because “I am his father” or “I am his mother.”
  • Effect of Act. If the parents dispose of the child's property in their own name, and the relative is in good faith and meets the conditions for good faith acquisition, it is generally difficult for the child to recover the property directly, but he can claim compensation from the parents; if the parents and the relative maliciously collude to harm the child's interests, In accordance with Article 154 of the Civil Code, the act is invalid.
  • Revoke the guardianship and change the guardianship. If the guardian seriously infringes the legal rights and interests of the ward, other persons and relevant organizations with guardianship qualification according to law can apply to the court to revoke his guardian qualification and appoint another guardian; if the qualification is revoked, he should continue to bear the child's maintenance expenses.
  • Maintenance obligations cannot be confused with children's property. Article 1067 of the Civil Code stipulates that if parents fail to fulfill their obligation to raise children, minor children or adult children who cannot live independently have the right to require their parents to pay maintenance fees. Raising children is a legal obligation of parents, and the money inherited by children cannot be used to offset the parents' obligation to raise children.
  • Children can have independent property. Article 1,188 of the Civil Code stipulates that if a person with no or limited capacity for civil conduct who has property causes damage to others, the compensation shall be paid from the person’s own property; any shortfall shall be borne by the guardian—this also indirectly confirms that a child’s property belongs to the child.

The distinction between 6. and "Parents' contributions are registered in the child's name"

This section specifically distinguishes between two situations that are similar in appearance and different in nature.

Case 1: Parents buy a house with the money they have saved or the common property of husband and wife, which is registered under the name of the underage child. This does not necessarily mean that “this property is the child’s personal property.” If, at the time of the contribution, there was no clear intention to gift the funds directly to the child as an individual, some courts will treat such funds as family-owned property or marital joint property, and they may be subject to division in the event of divorce. Therefore, the nature of the parents' money into the child's name depends on the true meaning of the contribution, not just on registration.

Case 2: Property acquired by the child through inheritance or gift. This originally belongs to the child and has nothing to do with whether the parents contribute capital. The parents are only in charge and the restrictions of Article 35 apply.

The biggest difference between the two lines lies in "the source of money" and "the meaning of gift". The inheritance income is "the child's money"; The parent's contribution to the registration of the child's name is "the parent's money is put in the child's name". Whether and to what extent it is given to the child needs evidence and expression of meaning to judge. The interpretation of the Marriage and Family Editor also specifically deals with the parents' "reneging" on the issue of punishment: parents, as legal agents, dispose of houses purchased and registered in the name of minor children with the joint property of husband and wife, and afterwards claim to the counterpart that the act is invalid on the grounds of violating Article 35 of the Civil Code and harming the interests of minor children, the people's court will not support it.

7. How to standardize management and operations

Since the rule is "can manage but not spend", make "manage" a visible and retract process. Even in cases of separation or divorce, the most practical form of oversight comes from the other party; and even in intact families, the following practices can help reduce disputes:

  • Build property inventory. List all inherited assets, bank deposits, real estate, and financial investments item by item, clearly stating their source, amount, account details, and date of acquisition. Each party should retain a copy. The list itself serves as the basis for asserting rights in the future.
  • Special account management and separate bookkeeping. The child's money is kept in a separate account under the child's name, separated from the parents' personal account, and kept running water so that every expenditure corresponds to the child's purpose.
  • Agreed supervision. By the other party or a trusted close relative as the supervisor, major disposition (sale, mortgage of real estate, etc.) must be agreed in writing and explain the purpose, forming a "negotiated" mechanism.
  • Use a will to appoint guardianship. Article 29 of the Civil Code allows parents to appoint guardians through wills. If you are worried that one party will improperly dispose of the child's property in the future, you can make arrangements before your death to specify the escrow and supervisor together.
  • Remedial measures in the event of encroachment. Sue in the name of the child, request the return of property, compensation for losses;Apply for the revocation of guardianship and change of guardianship; if necessary, apply for the preservation of acts to be frozen first; if the circumstances involve illegal crimes, they may be reported to the relevant authorities.

8. Common misconceptions

Misunderstanding 1: "We gave birth to children, and we should control the money." Ownership and custody are two different things. When the child reaches adulthood, the property is at the disposal of the child himself; before adulthood, the parents are the custodians and may not be disposed of except for the benefit of the child. The relationship between birth and maintenance does not change the ownership of property, but only brings about the responsibility of protection and management.

Misunderstanding 2: "After divorce, you can take out the children's share and share it together." The property of the child is not the common property of husband and wife, so divorce division is not involved; dividing it into the common property is an infringement on the property of the child, which should be returned and compensated.

Myth 3: "As long as there is no divorce, you can use it as you like between husband and wife." No. Even if the family is complete, using the money inherited by the child for the personal consumption of the parents, guaranteeing others, and taking high-risk speculation may also constitute an infringement on the property of the ward.

Key Points of Judgment Reference: The Case of He Mou1 v. He Moumou Confirming Dispute over Contract Invalidation (First Instance: Beijing Changping District People's Court [2023] Beijing 0114 Minchu No. 17044; Second Instance: Beijing No.1 Intermediate People's Court [2024] Beijing 01 Minzong No. 5209) Judgment Essentials: After the parents give the house to their minor children and handle the transfer registration, if the house becomes the personal property of the minor, and one of the parents acts as a guardian to return the house to himself on behalf of the minor, the people's court shall determine that the return is invalid in accordance with the provisions of Article 35 of the the People's Republic of China Civil Code. Case source: Case Database of the People’s Courts.

9. Frequently Asked Questions

Question: Can parents spend the inheritance their child has received?It cannot be spent as one’s own money, nor can it be diverted for the parents’ personal use. Parents, as legal guardians, may only use a child’s property for the child’s own benefit—such as for education, medical care, and basic living expenses. Any other disposition of the child’s property is unlawful.

Second question: If the money is held in the parents’ account and the house is registered under the parents’ name, can it still be considered the child’s property?It depends on the source of the money. If it is originally inherited from the decedent or donated to the child personally, it is deposited into the parent's account and registered in the parent's name only to keep the change in appearance and does not change its personal nature of the child. Conversely, parents use their own money to register in the child's name, which is not of course the child's.

Third question: Does purchasing insurance or investment products for one’s child count as acting in the child’s best interests? It is generally acceptable to be robust and protect or preserve the value of children's long-term; but taking children's money to make high-risk investments or buy financial management is actually filling the parents' fund gap, which does not belong to the interests of children.

Four questions: Will the child’s money be divided in a divorce?No. In a divorce, only the marital property is subject to division; the child’s personal property is not included in the division. An agreement in a divorce settlement that assigns joint property to the child is a separate matter; the child may directly request its enforcement, and neither parent may unilaterally revoke it.

Five Questions: If one parent has transferred the child’s funds, what should the other parent do? can claim return and compensation in the name of the child; apply to revoke the qualification of the guardian and change the guardianship; apply for behavior preservation if necessary to control the money and house first. Disputes should be resolved through legal means such as revoking guardianship, suspending visitation rights, or modifying child custody arrangements; they should not be settled by forcibly taking the child or seizing property.

Sixth question: If a house purchased with parents’ funds is registered under the child’s name, can it be divided in a divorce?It depends on whether the funds used to purchase the property were explicitly gifted to the child as an individual at the time of funding. If there is no clear meaning of gift, it may be treated as the common property of the family or the common property of the husband and wife, thus being included in the division. Therefore, the nature of the capital contribution should be clearly stated in writing at that time and evidence should be kept.

10. Practical Legal Insights

When an old man dies, he leaves his property to his underage children. Parents often think that their children's money is not our money, so they turn around and take it to repay the mortgage and fill the business deficit. This idea does not hold up legally. From the moment the inheritance begins, the child acquires ownership of the estate; at this time, the parents serve as the legal guardians and custodians, but they are not the owners. Custody does not equate to ownership, nor does it entitle one to dispose of the property at will. First, clearly define the boundary that this money belongs to the child, not the parents; doing so can prevent many messy financial disputes within families.

In terms of operation, what parents can do is to manage, protect and preserve the value, and do things for the children: keep the deposit property for the children, open an account in the name of the child to collect the money, use the money to pay the child's own living expenses, tuition and medical expenses, and make stable arrangements for preserving the value. The red line is also clear that it cannot be misappropriated, appropriated or appropriated, cannot be punished for the benefit of oneself or others, cannot be given away free of charge or transferred at an obviously low price, and cannot use children's houses and deposits to guarantee their debts. Registered in whose name does not change the fact of the source, the money into the parents' card is only escrow, not the transfer of ownership, this is especially important for parents to carry.

In terms of avoiding the pit and timing, it is suggested to separate the inherited property from the child's own account, set up and keep the account separately, and keep the evidence for the child's benefit for large expenses, such as tuition bills and medical documents. When divorce involves custody or property division, the property belongs to the child and does not enter the husband and wife division, but the management right follows the guardianship, which is prone to conflicts. It is best to make a written agreement in advance. If parents spend the money without authorization, the child may, upon reaching adulthood, demand its return; in serious cases, the parents may be held liable. If you really need to dispose of large amounts of property, such as selling a house, you must confirm that it is for the benefit of the child and leave a mark, so as not to let the temporary loosening become a return lawsuit in the future.