Insights

What exactly does Ningbo's heritage include? These "posthuman wealth" is actually not heritage.

Ningbo Author：LuXu WANG

After the death of Mr. Wang in Ningbo, his family found several things when sorting out their belongings: a bank deposit slip, a house in the old city, a life insurance policy, and death compensation and pension issued by the unit. The family members believe that all of this money was “left behind” by Mr. Wang and should therefore be divided equally among his children. However, once we inquired at the notary office and the court, we learned that certain items could not be distributed as part of the estate at all.

Similar confusion is quite common among families in Ningbo who are handling inheritance matters. Inheritance is not a simple basket of "everything left behind after people leave"-which can be put into the "plate" of inheritance and which must be taken out and handled separately, which directly determines how much each heir will eventually get. This paper focuses on Article 1122 of the Civil Code, lists the two types of property "heritage" and "not heritage" one by one, and gives operational suggestions in the light of the common situation in Ningbo.

1. First, clarify the definition of "heritage": focus on three defining terms.

Article 1122 of the Civil Code provides: An estate consists of the lawful personal property left behind by a natural person upon their death. Any estate that, according to law or by its nature, may not be inherited shall not be subject to inheritance.

compared with the previous "inheritance law", the biggest change of this article is from "enumeration" to "general". In the past, the law listed the inheritance one by one, and it was easy to cause disputes if it was not listed. The current writing method only gives a general standard. Any property that meets this standard is regarded as inheritance in principle, thus the new type of property has room to accommodate.

To apply this regulation correctly, the key lies in three qualifying terms:

  • "Individual": It can only be the property of the deceased himself, not the property of the spouse, the family or the name of others. The part of the common property of the husband and wife and the common property of the family that belongs to others shall be divided in advance.
  • "Legal": The property must be legal in origin and possession. Property obtained through illegal crimes is not protected by law itself, not to mention inheritance.
  • "left at the time of death": according to the time of death, the property existing at the time of death is the heritage. Amounts separately incurred after death for funeral expenses, bereavement compensation, and the like shall be assessed individually to determine their nature.

The definition delineates the boundaries of “heritage.” Next, according to this standard, first look at what belongs to the heritage and then look at what does not.

2. is a legacy: common "money behind" and new digital property

In accordance with Article 1122, the personal lawful property left behind upon a person’s death generally falls within the scope of the estate. The most common in Ningbo families are:

  • Real estate, including the housing reform houses and commercial houses in the old city, as well as the resettlement houses obtained from demolition and resettlement;
  • Bank deposits, wealth management products, fund shares;
  • Motor vehicles, shares of fishing vessels and other movable property;
  • capital contribution, equity interest in the company or partnership;
  • Creditor's rights to others, such as money lent but not recovered;
  • valuables such as collectibles, calligraphy and painting, gold and silver jewelry;
  • Property-based income derived from intellectual property rights, such as copyright and patent rights.

What needs special reminder is virtual property. Online game equipment, virtual currency, network accounts with a certain value, etc., as long as they have the three attributes of "dominant, valuable, and usable" at the same time, they are inheritable property. Although they are invisible and intangible in physical form, they can also enter the scope of heritage under the general expression of Article 1122. This type of property is becoming increasingly common among young people, and Ningbo families should not overlook it when handling inheritance matters.

In practice, to judge whether a certain digital property can be inherited, you can first ask three questions: Can the account or property be actually operated or controlled by others? Does it have exchange value in the market? Can the holder use it normally during his lifetime? The three questions are all positive answers and can be basically included in the heritage list; on the contrary, the account authority that is purely personal identity binding and non-transferable should be judged separately.

there are many individual industrial and commercial households and family-run enterprises in ningbo. plant, equipment, undistributed profits and external accounts receivable are often mixed together. Whether such property belongs to the estate depends on the registration and contribution: the share registered in the heir's personal name belongs to the estate, and the part belonging to the spouse or family is separated first. Mingling business assets with family assets is a common source of dispute in inheritance cases in Ningbo.

3. is not the "wealth behind you" of the inheritance: explain the reasons one by one

This is the main point of this article. Many family members habitually divide all the money and things received behind the deceased as inheritance, and the result is either returned by the notary office or corrected by the court when dividing. The following categories need to be taken out one by one and examined individually.

1. Assigned Beneficiary's Insurance

Life insurance If the beneficiary is clearly designated, the insurance money obtained after the death of the insured belongs to the property of the beneficiary himself, not the estate of the insured. Since the funds have been explicitly designated in the contract to the beneficiary, there is no need to go through the probate process. Conversely, if no beneficiary is designated, or if the beneficiary dies before the insured and there are no other beneficiaries, then the insurance proceeds will be treated as part of the estate. Insurance proceeds from property insurance are generally treated as part of the estate.

2. Death compensation, bereavement allowance, and living allowances

This kind of money is the compensation or pension paid to the close relatives of the deceased, which is used to make up for the loss suffered by the close relatives due to the death of their relatives. In nature, it is the comfort to the close relatives, not the personal property left by the deceased, so it does not belong to the inheritance. In practice, they are distributed among close relatives according to certain rules, rather than in accordance with the statutory order of succession. The point to be distinguished is that if the pension is paid to the disabled person himself, the part that has been obtained before his death belongs to his personal property and can be used as an inheritance.

3. Homestead use right

The right to use the homestead has a strong personal dependence, which is bound to the membership of the rural collective economic organization and cannot be inherited as an estate. However, houses built on residential land are personal property and can be inherited. There is a principle of "integration of real estate": houses and land are inseparable, and the homestead itself cannot be inherited separately, and the person who inherits the house can continue to use the corresponding homestead during the existence of the house. It should be noted that if the homestead house is bequeathed to a person other than the collective economic organization, the bequest is invalid.

4. Land Contract Management Rights

For the land contracted by family as a unit, the contractor is a "peasant household" rather than an individual, and the contracted management right itself cannot be simply inherited as an individual heritage. In the case of land expropriation, if the heir claims to divide the compensation for contracted land and resettlement subsidies in the compensation, it is generally not supported; however, the compensation for young crops belongs to the contracted operating income and can be inherited. There are many rural areas in Xiangshan, Yuyao, Ninghai and other places under the jurisdiction of Ningbo. This distinction is particularly critical in the division of land acquisition compensation disputes.

5. Property leased or borrowed from others during one’s lifetime

The ownership of the house and borrowed goods rented by the decedent during his lifetime does not belong to him, and certainly cannot be regarded as an inheritance. For example, the elderly rent public housing, borrow neighbor fishing equipment, these property can only be returned to the right holder, not into the estate distribution. Whether the lease right can be continued by the family depends on the lease contract and relevant provisions, which is different from "inheritance.

6. The right to personal exclusive

the rights to use natural resources such as water drawing rights, prospecting rights and mining rights, which are qualified and restricted by law on the subject of rights, have personal exclusive property and cannot be inherited as an estate. Similarly, there are various qualifications and licenses that are contingent upon holding a specific status.

In addition, there is a kind of situation that is easy to be misjudged: the old man has saved a sum of money in the name of his children, but the passbook and password have been kept and controlled by the old man himself, which belongs to "holding on behalf of others", not a gift to the children, and this deposit is still the inheritance of the decedent.

4. half is half is not: first analyze the product, then determine the heritage

It is more common in reality that property is "half heritage, half not heritage". At this time, article 1153 of the Civil Code is used: when the property jointly owned by the husband and wife is divided, except as agreed, half of the jointly owned property shall be divided into the spouse and the rest shall be the estate of the heir; if the estate is in the common property of the family, the property of others shall be divided first.

The meaning of this regulation is to "analyze the property" first and then "inherit". For example, a couple in Ningbo bought a house together after marriage and registered it under her husband's name. After her husband's death, this suite cannot be divided as an inheritance as a whole. First, the portion belonging to the wife is separated; the remaining half is then jointly inherited by the wife and the children as first‑order heirs. If you don't do this step, dividing the entire suite as an inheritance is tantamount to encroaching on your spouse's share of the property.

The same principle applies to the equity, the factory jointly managed by the family, the joint deposit of the family, etc. Any property registered in a person's name, but actually accumulated by the family, must be stripped of the part belonging to others before being divided. If this step is not done correctly, the following division ratio is all wrong.

It should also be noted that analysis of production is not equal to division. The analysis of property is only to separate the "part that does not belong to the heir" from the property and determine the general scope of the estate. The order of these two steps cannot be reversed-first figure out what is the heritage and then talk about how to divide it.

5. the three most miscalculated scenarios

1. Does the insurance money count as inheritance after all?

The answer depends on "whether there is a designated beneficiary". If a beneficiary is designated, it is given to the beneficiary and does not count as an estate; if no beneficiary is designated, it is counted as an estate. A single sentence on the insurance policy can lead to entirely different outcomes. So when looking at the heirs, the beneficiary column of the insurance contract must be seen clearly.

2. Can death compensation be used to pay off the debt of the deceased?

No. Death compensation is a consolation and compensation for close relatives, not the inheritance of the deceased, and naturally cannot be used to pay off the debts of the deceased. Article 1161 of the Civil Code is also mentioned here: The heir shall, to the extent of the actual value of the estate, pay off the taxes and debts payable by the heirs in accordance with the law. In other words, the "inheritance" is used to repay the debt, and the portion actually obtained by the heir is limited, and the excess is not forced to be repaid. There is no basis for taking the death compensation to pay the debt, or asking the heirs to make up with their own money.

3. why is the house of rural homestead "sustainable but not sustainable"?

The right to use the homestead cannot be inherited, but the house can be inherited. Because the house is built on the homestead and the two are inseparable, the person who inherits the house can maintain the use of the corresponding homestead during the actual possession and use of the house, but this does not mean "inheriting the right to use the homestead" itself. When the rural areas under Ningbo are demolished, the compensation for the housing part and the compensation for the homestead part are often calculated separately. Family members should distinguish which part is heritage and which part is distributed according to membership.

Correction of several common misconceptions in 6.

  1. Misunderstanding 1: When a person is gone, all the property under his name is heritage. Correction: First look at whether it is "personal, legal, and left over from death", and first do husband and wife or family analysis, and other people's shares cannot be counted.
  2. Misunderstanding 2: The large amount of compensation paid by the unit can also be divided according to the inheritance. Correction: Death compensation and pension belong to close relatives in nature. The distribution rules are different from inheritance, and they cannot be simply divided according to the order of inheritance.
  3. Misunderstanding 3: If you have insurance, you must count it as an inheritance. Correction: The insurance money of the designated beneficiary belongs to the individual beneficiary and will not be included in the inheritance plate; only the insurance money of the undesignated beneficiary can be regarded as the inheritance.
  4. Myth 4: Money saved by elderly parents in their children’s names is automatically considered the children’s property. Correction: If the passbook and password are managed and used by the elderly, they are usually still recognized as the heritage of the elderly.

In addition, there are two recurring points in the trial practice: one is the policy benefits embodied in the conversion of "length of service discount" for public housing, and the corresponding property value can be inherited as inheritance; the other is that the renovation and expansion of the house after the death of the decedent will not affect the division of the original inheritance share, and the inheritance ratio cannot be changed because the house has changed.

There is another point that is easily overlooked: the estate may have both property and debt. If the heir expressly waives the inheritance, he may not be liable for the taxes and debts that the heir should pay in accordance with the law. Therefore, it is better to wait until the property and debt are counted before deciding whether to accept inheritance and how much to accept, rather than rushing to declare a position first.

Class Case Reference: In the case of Zhao Mou v. Zuo Mou and Qi Mou in the division of common property, the parties had disputes over the nature and distribution of death compensation. The court held that the death compensation is compensation for the loss of the expected income of the deceased's family as a whole, not the deceased's estate, which is shared by the close relatives. Before distribution, funeral expenses should be deducted and priority should be given to the dependants, while the rest should be divided according to the closeness of relatives and closeness of life. Trial Court: Zouping City People's Court of Shandong Province Case No.:(2020) Lu 1626 Minchu No. 4498; Source: 2022 Cases of Chinese Courts, Disputes over Marriage, Family and Inheritance.

7. Frequently Asked Questions

Question: In Ningbo, is life insurance money divided as part of the estate along with other assets among the children?

A: It depends on whether the beneficiary is designated.If the policy designates a beneficiary, the insurance premium belongs to the beneficiary himself, does not participate in the inheritance distribution, and is not included in the estate. If there is no designated beneficiary, or if the beneficiary dies before the insured and there are no other beneficiaries, the insurance premium is treated as an estate. Ningbo parties can take the insurance contract to the notary office for consultation, the notary will check the beneficiary column before deciding whether to include the scope of the estate.

Question: Can death compensation be used to pay off the debts of the deceased?

Answer: No. Death compensation is a form of indemnity paid to the close relatives and does not constitute part of the estate. The repayment of the debt is an estate, and article 1161 of the Civil Code stipulates that the heir shall pay off the taxes and debts of the heir to the extent of the actual value of the estate, so the next of kin is not obliged to fill the hole with death compensation or personal property.

Question: If parents own a residential plot and a house in the countryside, can their children jointly inherit them?

Answer: It needs to be considered on a case-by-case basis. The right to use a residential land plot cannot be inherited, but the house on it can be inherited. After inheriting the house, the corresponding homestead can continue to be used during the existence of the house, but the right to use the homestead itself cannot be divided as an inheritance. If the child is no longer a member of the collective economic organization, the situation will be more complicated, and prior consultation is recommended.

Question: If an elderly person deposits money in my name, does that count as a gift to me?

Answer: Not necessarily. If you can prove that the passbook and password have been kept and controlled by the old man himself, and only "borrowed" your name, the money is usually still recognized as the old man's inheritance. On the contrary, if there is a clear intention to give and can be proved, it may belong to you personally. The key to determining this lies in who ultimately controls the funds.

8. Practical Insights from a Lawyer

Family members often divide everything left by people after they leave as inheritance. As a result, they find that many of them can't be treated as inheritance at the notary office or the court. The boundary of the estate is actually three qualifiers: the individual can only be the deceased's own, the spouse's and the family's share must be divided first; Legal, source and possession must be legal; The money left over at the time of death is bounded by the time of death, and the money generated only after death is counted separately. First, ask whether the deceased is personal, dead and legal, which can save many detours and avoid forcibly dividing the money that should not be divided.

In terms of operations, each item must be counted and assessed individually. Real estate, deposits, financial management, equity, creditor's rights, collectibles, intellectual property property income, usually count; online game equipment, virtual currency, valuable online accounts, as long as they can be controlled, valuable, transferable, but also into the heritage. In turn, the life insurance benefits of the designated beneficiary shall be attributed to the beneficiary himself and shall not be regarded as an estate. The common property of husband and wife and the part of the family that belongs to others shall be discussed first. In practice, the mixing of business assets and family property is the most common source of local disputes, early separation and early worry.

In terms of avoiding the pit and timing, it is suggested that when the old man has just left and the materials are still in hand, he should make a list of his heritage as early as possible, and mark the calculated and uncalculated ones separately. Don't wait for the dispute to break out before looking for vouchers everywhere. Involving digital heritage, WeChat, Alipay, game account login and property clues to be written down in advance, but pure identity binding, non-transferable permissions to make another judgment. For uncertain items, such as whether a certain insurance benefit has a designated beneficiary or whether a certain house has been obtained within marriage, the contract and registration shall be verified before drawing a conclusion. The list is clear. Whether it is negotiation, notarization or litigation, you can clearly explain what is there and what cannot be divided.