Matrimonial property: What you need to know

Matrimonial property is a very important issue within marital relationships, involving a diverse array of legal concepts. Here are some questions and answers regarding matrimonial property. 

Question 1: What constitutes joint property in a marriage?

Property acquired jointly by both spouses during the marriage is considered matrimonial property unless stipulated otherwise by law or agreed upon by both parties.

According to Article 1062 of the Civil Code of the People's Republic of China and the Interpretation of the Supreme People's Court on the Application of the Marriage and Family Book of the Civil Code of the People's Republic of China, matrimonial property of the couple includes the following: 

1. Income, assets, bonuses, and other remuneration received from services rendered; 

2. Salaries, bonuses, income from business ventures and investments; 

3. Proceeds from intellectual property rights, such as royalties received by one of the spouses, patent transfer fees; 

4. Inherited or gifted property except that decided to give exclusively to one party in a will or a gift contract; 

5. Returns from personal investments; 

6. Housing subsidies and housing compensation; 

7. Basic pension and bankruptcy resettlement compensation obtained or should be obtained by one of the spouses. 

Both spouses hold equal rights over the management of the commonwealth of the couple.

Question 2: What defines personal property for each spouse?

According to the law, assets acquired by both spouses during their marriage are generally regarded presumed to be a common wealth of the couple unless there exists explicit agreement to the contrary agreed upon by both parties.

According to Article 1063 of the Civil Code of the People's Republic of China and the Interpretation of the Supreme People's Court on the Application of the Marriage and Family Book of the Civil Code of the People's Republic of China, certain categories of property are designated as personal belongings. These include:

1. Premarital property owned by one spouse; 

2. Compensation or indemnification received by one spouse for injury sustained; 

3. Property exclusively designated for one spouse as outlined in a will or gift contract; 

4. Articles exclusively used by one spouse for daily necessities; 

5. Insurance benefits related to soldiers' casualties, disability allowances, and medical and living subsidies. 

It's important to note that the status of premarital property belonging to one spouse and assets acquired jointly during marriage as personal property can also be separately agreed upon by the parties involved.

Question 3: If a house owned by one of the spouses before marriage is requisitioned after marriage, does the compensation for the house belong to the common property of the couple?

The escalating pace of urbanization in China has brought about the gradual transformation of rural areas into urban landscapes, presenting potential issues where premarital housing owned by one spouse may face requisition after marriage.

According to Article 1063 of the Civil Code of the People's Republic of China, premarital housing remains classified as personal property. During the marriage, the status of premarital property remains distinct and does not automatically convert into common property. Consequently, if a house owned by one spouse before marriage is requisitioned during the marriage union, the compensation awarded for the original value of the property generally belongs under the category of separate property belonging to the owning spouse.

Question 4: If a separate property owned by one of the spouses before marriage is sold after marriage, does the appreciative value during the marriage belong to the common property of the couple?

A house purchased with full payment by one spouse before marriage is regarded as that spouse's separate property. If the appreciation in value during the marriage is attributable to natural factors, it generally remains the personal property of that spouse. However, the spouses can make separate agreements regarding the premarital property and any appreciation it undergoes.

Article 26 of the Interpretation of the Supreme People's Court on the Application of the Marriage and Family Book of the Civil Code of the People's Republic of China specifies that proceeds from a spouse's separate property after marriage, excluding earnings and unearned increments, are determined as community property. The appreciated portion from the sale of the personal property owned by one spouse before marriage constitutes the "unearned increment" mentioned in this article and should be excluded from the couple's joint assets.

Question 5: Does the property acquired by one of the spouses during a period of separation belong to the common property of the couple?

Determining whether property acquired by both spouses during a period of separation constitutes common property requires a comprehensive assessment based on the relevant legal provisions, the duration of the separation, and whether the other spouse contributed to acquiring the property.

Question 6: How can the spouses make a legally effective agreement on the ownership of property acquired during the marriage?

Spouses have the option to reach agreements concerning property acquired during the marriage and premarital property. Such agreement generally must satisfy the following conditions: 

1. Both parties have full capacity for civil conduct; 

2. The intentions expressed are genuine, without any coercion or deception; 

3. The agreement must not violate legal provisions and principles of public order and good customs; 

4. It must be documented in writing. A valid agreement between spouses regarding property acquired during the marriage carries legally binding force for both parties.

According to Article 1065 of the Civil Code of the People's Republic of China, individuals may mutually agree, in writing, on the ownership of their premarital property and assets acquired during marriage. This agreement may specify separate ownership, joint ownership, or a combination of both. In the absence of such agreement or if the terms are unclear, Articles 1062 and 1063 of this Code shall apply. It's important to note that any agreement regarding premarital and marital property is legally binding on both spouses.

Question 7: Can the spouses request the division of common property of the couple during the duration of the marital relationship?

Yes, however, the division of common property must meet specific criteria. Common property of the couple does not necessarily follow the traditional concept of "indivisibility" often associated with private assets, common property of the couple can be divided under special circumstances.

Article 1066 of the Civil Code of the People's Republic of China regulates that during the marriage, one spouse can petition the court to divide their commonwealth under specific circumstances. These circumstances include situations where:

1. The other spouse has engaged in actions such as concealing, transferring, selling, damaging, or misusing common property, or has created false debts against the common assets, seriously infringed the interests of the commonwealth; or 

2. A dependent, for whom one spouse has a legal obligation to provide support, is suffering from a severe illness requiring medical treatment, and the other spouse refuses to cover the relevant medical expenses.

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