Perspective | Strategies for Handling Spousal Diversion of Marital Assets During Divorce

One party may withdraw large sums of cash from the joint or personal account—either during marriage or just before divorce—or frequently transfer funds to unidentified accounts, effectively moving bank deposits into other accounts under their own control, or even into someone else’s name. Such transfers typically exceed the needs of daily living and differ significantly from ordinary business or operational expenses. In some cases, the party transferring assets might also move substantial cash or valuable items to their parents’ or close relatives’ homes for safekeeping, in an attempt to evade equitable division in the divorce settlement. In practice, some individuals claim they’re merely "borrowing an account for transaction purposes," but if the court determines that the funds remain firmly under their control, those assets will still be treated as jointly owned marital property and subject to division.

One party, without obtaining the other party's consent, independently sells the jointly purchased real estate acquired during the marriage to a third party, or transfers it via gift to parents, relatives, friends, or other individuals. If the third party knowingly accepts the sale despite being aware that the property is marital joint property, this situation will not apply. Good Faith Acquisition System Even if the third party acted in good faith and the transaction has already been completed, the party who improperly disposed of the property may still be required to compensate the spouse or receive a smaller share of the property’s value during the divorce settlement.

One party may transfer marital company shares, partnership contributions, and other equity interests held during the marriage to a third party, or divert joint assets from the corporate level altogether through methods such as increasing or reducing capital, or siphoning off funds. Some even go so far as to secretly transfer shares in advance to relatives or friends, concealing their true ownership. If significant joint assets—such as jointly contributed company equity—are disposed of without the spouse's consent, for instance by gifting them to others, this also constitutes an attempt to move marital property, potentially leading to penalties like receiving a smaller share of the marital assets during divorce proceedings.

One party colludes with family and friends to fabricate false debts, creating the illusion that joint assets have already been used to repay them, thereby reducing the amount of property available for division during divorce. This tactic has frequently occurred in past judicial practices. In response, the "Interpretation (I) of the Marriage and Family Chapter of the Civil Code" has imposed strict requirements: In divorce cases, if one party claims the existence of marital joint debts, they must provide evidence proving that the debt was either agreed upon by both spouses or directly used for their common living expenses. Otherwise, the court will not recognize it as a joint debt. Therefore, when a spouse suddenly claims massive debts right before divorce, the other party should carefully verify the authenticity of these claims. If it is later discovered that the debt was fabricated solely to transfer assets, the court will deem such behavior as an illegal attempt to divert or misappropriate marital property. Not only will the court reject the claim of this fabricated debt, but it may also award the other spouse a smaller share—or even no share—of the marital assets during the property division process.

Some spouses deliberately squander large sums of money or maliciously damage shared assets before divorce, aiming to prevent their partner from receiving a fair share. While this doesn’t technically constitute "transferring" assets to a specific third party, Article 1092 of the Civil Code explicitly lists "damaging or squandering marital joint property" alongside hiding or transferring assets—both of which are deemed serious acts that harm the interests of the marital estate. Therefore, if one spouse is proven to have engaged in malicious spending, the court may award them a smaller portion of the marital assets during the divorce settlement.

In summary, whether it involves privately diverting savings, unauthorizedly selling property or equity, or even borrowing under false pretenses and gifting assets to a lover, the core issue in all these actions is that one party unilaterally disposes of significant joint assets without the consent of the spouse, thereby violating the principle of good faith. In specific cases, regardless of the outward appearance, the underlying reality remains the same: as long as one spouse cannot prove that the expenditure was genuinely intended for the couple's shared living expenses and that prior consent was obtained from the other, there is a strong possibility the action will be deemed an "improper transfer of marital property."

Article 1062 of the Civil Code stipulates that spouses have equal rights to manage their joint property; therefore, any significant disposal of such assets must be agreed upon by both parties. If one spouse unilaterally disposes of major joint property without the consent of the other, this act—specifically, the unauthorized transfer of marital assets—constitutes an unlawful disposition under the law. Moreover, Article 1066 of the Civil Code further grants spouses a special remedy: during the marriage, if one party conceals, transfers, sells off, damages, or squanders joint marital assets, or even deliberately fabricates joint debts in a manner that seriously jeopardizes the interests of the marital property, the innocent spouse may request the People’s Court to divide the joint property. Once divorce proceedings commence, Article 1092 of the Civil Code directly outlines punitive measures for property division: if one spouse hides, transfers, sells off, damages, or squanders joint marital assets, or deliberately creates fictitious joint debts in an attempt to encroach upon the other spouse’s share, the court may award the innocent spouse a smaller portion—or even deny them any share at all—during the divorce settlement. Additionally, the same article clarifies that if, after the divorce, the non-offending spouse discovers any of these wrongful behaviors, they retain the right to file a lawsuit with the People’s Court, seeking a second round of property division. This provision underscores that even if the misconduct was not detected during the initial divorce process, the offending party could still face the risk of having their assets redistributed later on. Furthermore, Judicial Interpretation (II) of the Chapter on Marriage and Family, Article 7, explicitly establishes the principle of invalidity and sets forth clear remedies for cases involving the transfer of property in violation of the duty of fidelity. Meanwhile, Article 67, Paragraph 2 of the Law of the People’s Republic of China on the Protection of Women’s Rights clearly mandates that both spouses are obligated to truthfully declare all their joint marital assets during divorce proceedings. Failure by either party to provide an accurate asset declaration is treated legally as equivalent to concealing or transferring marital property, entitling the other spouse to receive a reduced or no share of the marital assets during the property division.

In judicial proceedings, determining whether one party has concealed or transferred marital assets is crucial to the case's outcome. Typically, people's courts adhere to the principle of "whoever alleges must prove," yet recognizing the secretive nature of such actions and the difficulty in gathering evidence, they adopt a balanced approach that combines a moderate reversal of the burden of proof with free discretion in evaluating evidence. Specifically, the party alleging asset transfer must first present preliminary evidence—such as bank account statements, fund transfer records, or receipts—to demonstrate unusual large-scale expenditures or income in the other party's accounts, particularly when these funds were not used for shared family expenses or showed clear signs of malicious intent. This initial evidence must be targeted and detailed enough to pinpoint the suspicious assets for the court's review and verification. Once this incriminating evidence is provided, the burden of proof shifts temporarily to the opposing party.

For the party accused of transferring assets, they must provide a reasonable and evidence-backed explanation regarding the purpose and destination of the disputed funds. For instance, they may need to submit proof of salary and bonuses to demonstrate the lawful origin of substantial income, or furnish relevant purchase invoices and service contracts to verify that significant expenditures were indeed used for everyday household expenses. Alternatively, they could present loan agreements and repayment receipts to confirm that the funds were utilized to settle genuine debts. Importantly, the evidence provided must form a coherent and comprehensive chain of documentation—only then can the court conclude that the large-scale inflows and outflows are legally justified and unrelated to marital joint property. However, if the party succeeds in proving that the substantial funds were used to acquire essential family assets such as real estate or vehicles, or were allocated toward children's education or elder care, these expenditures would not be deemed as hidden or improperly transferred. Conversely, if the unusual flow of funds ultimately leads to an unclear destination, leaving no adequate explanation, the court may rule that concealed or diverted asset transfers have occurred. It’s clear that courts place greater emphasis on whether the funds have slipped out of the couple’s shared control—and whether such actions have harmed the other spouse’s interests—rather than being easily swayed by the parties’ subsequent justifications.

When reviewing and making judgments, courts typically consider comprehensively factors such as the purpose and amount of funds, the relationship with the transaction counterpart, the timing of the transaction, and the couple’s daily financial circumstances. For instance, was a large expenditure necessary for family life? Did the amount spent clearly exceed the couple’s income level and typical spending habits? Was the transaction partner closely related to the spouse in some special way? And did the transaction occur just before marital conflicts escalated or on the eve of separation or divorce? These details can all serve as crucial clues in determining whether the expenditure was intended for the couple’s shared living expenses—or, conversely, whether it was part of an intentional attempt to transfer assets. In principle, if an expenditure significantly exceeds normal household expenses without a reasonable explanation, it will be presumed not to have been used for common living purposes, thus leaning toward the conclusion that it constitutes a hidden asset-transfer act. At the same time, the court’s standards for examining evidence will also be adjusted accordingly. Given the secretive nature of asset-hiding behaviors, courts will not demand absolutely conclusive, direct evidence but will instead allow inferences based on everyday life experiences and common sense. For example, if substantial sums of money are transferred during the marriage using special numerical patterns like "1314" or "520," accompanied by unusual text-message records—even though the symbolic meaning of the transfer amounts alone may not be enough to prove intent—when combined with additional evidence such as chat logs or intimate photographs, it becomes entirely plausible to conclude that an illicit extramarital relationship exists alongside an attempt to divert marital assets. In such cases, the court may relax its strict requirements for a complete chain of evidence, ensuring that genuine acts of wrongdoing are not left unpunished simply because gathering sufficient proof proves challenging.

After confirming that one party has improperly transferred marital assets, the court will make a favorable adjustment to the divorce property division plan in accordance with legal provisions. It is important to emphasize that Article 1092 of the Civil Code uses the term "may" result in less or no division of assets, rather than "must" result in such a division. This grants judges a degree of discretionary power, enabling them to achieve fairness and reasonableness based on the specific circumstances of each case. In practice, courts typically follow these approaches:

1. The transferred portion will receive a smaller share.

In most cases, judges tend to adjust the distribution specifically for the portion of assets that was actually concealed or transferred. For instance, in certain cases, when a court determines that one party has moved a particular sum of deposits or assets, it will allocate this specific property differently from the standard 50/50 split, while the remaining marital assets are still divided according to general principles. A typical example is Supreme Court Guiding Case No. 66 (Lei v. Song: Divorce Case)—here, the husband, Lei, secretly transferred 195,000 yuan from their joint savings account without providing a valid explanation for its use. As a result, the second-instance court ruled that this 195,000 yuan constituted hidden and transferred marital property, justifying a reduced share for Lei under the law. Consequently, Lei was ordered to compensate his wife, Song, with 120,000 yuan—meaning Song ultimately received more than 60% of the total assets, a figure significantly higher than the usual 50/50 division. Another case, (2021) Supreme People’s Court Minzhong No. 700, involved Wei, who transferred substantial funds through three wealth management accounts during the marriage, offering inconsistent explanations. After thorough verification, the first-instance court confirmed that Wei had concealed and transferred as much as 380 million yuan. Ultimately, the court applied the law to award a disproportionately larger share—specifically 55%—to Wei’s wife, Li, thereby upholding her claim for that amount. These cases illustrate how courts typically favor the non-faulting spouse by granting them a larger or even full share of the identified transferred assets, aiming to fully compensate for their losses.

2. Expand to Adjust the Entire Scope of Joint Property

In some cases involving particularly egregious behavior, courts may extend the penalty of awarding little or no share to the couple’s entire joint property—rather than limiting it solely to the portion that was transferred. This typically applies when one spouse consistently, repeatedly, and on a large scale transfers or conceals assets, severely harming the other spouse’s interests. However, such rulings remain relatively rare nationwide, and instances of completely disregarding the division of assets are virtually unheard of. Still, this practice underscores that, for cases involving especially malicious tactics and profoundly damaging consequences, courts have the authority to significantly reduce—or even eliminate—the offending party’s share of the marital estate.

Regardless of the approach taken, judges typically consider a variety of factors when determining the extent of property division—or even deciding whether to award no division at all—including: the degree of malice behind the transfer behavior, its duration, the amount involved, the financial impact it has caused on the other party, as well as the economic circumstances of both spouses and the need to support any children. For instance, a mere momentary oversight in failing to declare assets clearly differs from a long-term, deliberate scheme involving large-scale concealment of wealth; the former’s subjective intent and objective harm are evidently distinct, warranting different treatment. Similarly, if the faultless party happens to be in a weaker financial position and is also responsible for raising children, courts often lean toward awarding them a larger share of the marital assets—to safeguard the interests of the disadvantaged spouse and their minor children. In short, judicial decisions not only rigorously enforce the principle of equitable distribution but also ensure fairness and reasonableness in specific proportions, avoiding the pitfalls of a rigid, one-size-fits-all approach.

No matter how concealed the act of transferring marital assets may be, it can still leave behind subtle clues. In practice, the main ways to uncover evidence of asset transfers are as follows:

Bank account statements serve as direct evidence of financial transactions. By retrieving the historical transaction details of the other party’s bank account, you can check for any unusually large withdrawals or transfer records. Pay special attention to substantial fund transfers that occur just before a marital conflict escalates or during the period leading up to separation—especially if the receiving account isn’t a typical personal account used for everyday transactions or belongs to an unfamiliar entity. Such transfers are highly likely to indicate an attempt to move assets to third parties. If you’re unable to obtain the other party’s account statements on your own, you may apply for them after filing for divorce. Court Investigation Order , assisted by the court in querying the bank. In addition to traditional bank accounts, attention should also be paid to transaction records from third-party payment platforms (such as Alipay and WeChat Pay). For instance, in certain cases, one party’s frequent transfers via WeChat or Alipay to a specific individual—or their purchases of substantial wealth management products—have emerged as crucial clues revealing attempts to conceal assets.

Real estate is one of the most significant components of marital property. If one spouse unilaterally disposes of a property, they typically need to go through procedures such as transferring ownership, which will naturally be reflected in the property registration records. It’s advisable to check the other party’s property status through the Real Estate Registration Center—looking into recent transactions like property sales, transfers, or mortgage cancellations. If you notice that jointly owned property originally registered under your spouse’s name has suddenly been transferred to someone else’s name without a reasonable explanation, this could raise suspicions of asset transfer. Meanwhile, the inquiry might also reveal properties that the other party has deliberately concealed or failed to disclose. For instance, there have been cases where individuals only declared one property during divorce proceedings—but subsequent checks uncovered another property registered elsewhere, clearly indicating intentional concealment.

In addition to checking for property ownership, you should also verify whether the other party has registered high-value assets such as cars under their name. Vehicle registration records from the relevant authorities can reveal details like vehicle transfers, liens, and other related transactions. If your spouse previously owned a vehicle but suddenly transferred or pledged it to someone else right before the divorce, this is definitely something worth paying close attention to. Furthermore, if there are any registered large-scale machinery, ships, or intellectual property jointly managed by the couple, these should also be thoroughly investigated. Some spouses may sell off their vehicles or valuable collectibles at significantly reduced prices just before divorce, often retaining the proceeds in cash hidden away. Tracking down the source and destination of these funds—whether through peripheral investigations or bank statements—is crucial to uncovering potential financial maneuvers aimed at evading asset division.

Pay attention to whether the other party has recently shown any unusual tax filings or financial transactions. For instance, property gifts or transfers typically involve paying deed tax and individual income tax, so you can check relevant tax payment records through the tax authorities. Similarly, if the other party operates a company that suddenly dissolves or undergoes changes in shareholders or senior management, these actions will also be reflected in their tax registration and annual business reports. Moreover, certain asset-transfer activities often come with inflows of funds, which may appear in the other party’s personal income tax returns or corporate financial statements. While it can be challenging for individuals to directly access the other party’s tax information, if legal proceedings are initiated, you can request the court to investigate relevant tax and financial documents by making inquiries with tax agencies, market regulators, and other relevant departments. Additionally, if the other party runs a business, keep an eye on any recent changes in the company’s financial status—this could be a sign that they’re using corporate channels to move family assets.

Sometimes, the other party’s asset transfers may leave traces in their behavioral patterns. For instance, suddenly increasing frequent interactions with a particular friend, casually sharing information about large-scale transactions on social media, or noticing that significant household assets—such as famous paintings, gold, and jewelry—have inexplicably disappeared. These everyday anomalies can often serve as valuable leads. While these clues may not always be directly usable as evidence, they can help pinpoint the right direction for the next stage of the investigation.

In summary, to effectively address the issue of marital property transfers, one must promptly and comprehensively monitor your spouse's financial activities in order to take targeted legal action. Once potential clues are identified, it’s crucial to immediately secure solid evidence, preventing your spouse from reacting by further destroying evidence or transferring assets. During the evidence-gathering process, ensure that all methods remain lawful, avoiding any measures that might infringe upon others' privacy or involve illegally obtaining bank information.

Faced with the tortious act of a spouse unilaterally transferring joint assets, the party without fault should take timely action to safeguard their own rights and interests:

Before initiating divorce proceedings, if one party already suspects that their spouse might be transferring assets, it’s crucial to take proactive precautionary measures. First, gather solid evidence. Compile and organize all relevant documentation related to your family’s financial assets, such as bank statements, property deeds, vehicle registration documents, investment records, and more—making copies or taking photos for safekeeping. If you notice any unusual behavior from your spouse (e.g., suddenly withdrawing large sums of cash), carefully observe and document the situation, ensuring that your actions remain within legal boundaries. Second, consider attempting a direct conversation or subtle probing. Sometimes, one partner may tactfully raise concerns about finances or casually hint at their intention to divorce, which can reveal the other party’s true feelings. If your spouse reacts with heightened anxiety and immediately starts moving assets or taking other drastic steps, this should serve as a clear warning sign—prompting you to act swiftly and pursue legal action without delay.

When deciding to file for divorce litigation, it’s advisable to simultaneously take measures such as property preservation to secure the current state of assets. Specifically, if the situation is urgent—such as discovering that the other party is about to sell off real estate or transfer substantial bank deposits—you can immediately apply to the court for pre-litigation property preservation before initiating the divorce suit. If the court reviews the case and determines that failure to act promptly could lead to irreparable harm, it will issue a ruling to impose measures like seizure, detention, or freezing of the relevant assets. Pre-litigation preservation requires the applicant to provide security; however, its key advantage lies in swiftly preventing the other party from further transferring assets before the lawsuit even begins. Even if pre-litigation preservation wasn’t secured early on, once new evidence emerges during the divorce proceedings—such as signs that the other party is attempting to move or conceal assets—you can still request court-ordered property preservation at any time. For instance, if bank records reveal significant recent withdrawals during court hearings, you may ask the court to immediately freeze the remaining balance in the spouse’s bank accounts. Property preservation ensures that, throughout the legal process, the couple’s joint assets remain intact, leaving no opportunity for the wrongdoer to dismantle or relocate them piecemeal. This, in turn, lays a solid foundation for a fair division of assets in the future. It’s important to note that when applying for preservation, you should clearly specify the exact assets or relevant clues—such as account numbers or the location of real estate—to enhance the court’s efficiency in enforcing the order. Additionally, where applicable, applicants may also request the court to notify relevant authorities for assistance—for example, instructing securities firms to freeze accounts or temporarily halting real estate transfer procedures—effectively blocking all potential avenues for asset flight.

In divorce proceedings, applying for an order requiring the declaration of marital joint property has become a standard procedure in many regions. One party can proactively request the court to initiate the property declaration process, demanding that the other party disclose all jointly owned assets within a specified timeframe. If the other party fails to submit the declaration by the deadline, provides incomplete information, or submits inaccurate details, they will be deemed to have made a dishonest declaration—effectively equivalent to concealing or transferring assets. As a result, once the case moves into the asset division phase, the judge can directly apply Article 1092 of the Civil Code to award the non-faulting party a larger share of the property, while potentially reducing—or even denying—the other party’s entitlement altogether. This institutional design effectively narrows the room for maneuver available to dishonest parties.

For marital property that has already been transferred into a third party's name, the faultless party also has the following options for handling it:

1. Assert the transaction is invalid and seek the recovery of the property

If it can be proven that the other party colluded maliciously with a third party, attempting to harm your own interests through a fictitious transaction, you may invoke Article 154 of the Civil Code and other relevant provisions to declare the transfer invalid and request the court to order the return of the property. This legal provision stipulates that civil legal acts involving malicious collusion that infringe upon the legitimate rights and interests of others are deemed invalid. While primarily applicable to general civil transactions, this rule can also be extended to cases where one spouse colludes with another to transfer marital assets. For instance, if a husband enters into a false sales agreement with a friend to transfer property ownership—intended as a ploy to evade his wife’s rightful claim to an equitable division—such action directly violates the wife’s co-ownership rights over the property. In this scenario, the wife could legally challenge the validity of the sales contract. Additionally, in cases involving obviously unreasonable transfers at significantly reduced prices, such evidence can serve as strong proof of malicious intent. For example, if a property valued at millions is transferred to a close relative for a token sum of just one yuan, this clearly defies common sense. Courts typically interpret such arrangements as mere camouflage designed to conceal asset transfers, rendering them legally invalid. Notably, when it comes to gift transactions—especially those that violate the marital duty of fidelity (such as gifting substantial sums to a lover)—the non-offending spouse may directly rely on Article 7 of the Second Judicial Interpretation of the Marriage Law to argue that the gift is invalid due to its violation of public order and good morals. Many spouses have successfully reclaimed improperly gifted assets from third parties through this legal avenue. It’s important to note that asserting the invalidity of such transactions usually requires suing the involved third party, either by filing a "claim for confirmation of property ownership and restitution" with the third party listed as the defendant, or by adding the third party as an intervenor in an ongoing divorce case to address the related property dispute. Regardless of the approach taken, the key lies in presenting sufficient evidence to the court demonstrating that the third party was fully aware—or should have been aware—that the property belonged to the marital community yet still participated in the transfer, thereby establishing malicious intent. If the evidence of collusion is robust enough, the court may rule to rescind the transfer, ensuring that the property is reintegrated into the marital estate for equitable division or returned directly to the non-offending spouse.

2. Handling of Third Parties in Good Faith

If the property has already been transferred to a bona fide third party—meaning the third party was unaware of the situation and legally acquired the property—the transaction typically should not be rescinded, given the principle of safeguarding transactional security. In such cases, the primary remedy available to the innocent party is to seek compensation in the form of monetary damages from the party who transferred the property. For instance, if one spouse secretly sells jointly owned property to an unsuspecting buyer at a fair market price, and the buyer subsequently completes the property transfer without knowledge of the arrangement, retrieving the property itself would likely be impossible. However, the proceeds from the sale must be fully included as part of the couple’s joint assets. During the divorce settlement, the court will allocate this amount proportionally to the innocent party. If the seller has already squandered part of the funds, making them irretrievable, the court may adjust the distribution of other marital assets accordingly, ensuring that the innocent party does not suffer unfairly due to the other spouse’s unauthorized disposal. Moreover, if the transfer of property results in actual financial losses for the innocent party, the latter may also file a claim for damages as part of the divorce proceedings, seeking appropriate economic compensation from the other spouse. Such a claim can be grounded in Article 1,091 of the Civil Code, which addresses divorce-related damages. The reasoning is that the act of transferring jointly owned property constitutes a significant fault, causing tangible financial harm to the innocent party, thus warranting compensation. Of course, whether such a claim is ultimately upheld will depend on the specific circumstances of the case, particularly the need to establish a clear causal link between the alleged damages and the other spouse’s wrongful conduct.

3. Investigate the current status of concealed assets and enforce execution forcibly

Recovering assets that have already been transferred to overseas accounts, underground money networks, or disguised into other forms is indeed challenging—but it’s not entirely impossible. If a divorce judgment has already determined that one party concealed specific assets and is required to compensate the other, the winning party can initiate enforcement proceedings, requesting the court to compel the payment of the compensation amount as stipulated in the ruling. During the enforcement process, the debtor is obligated to disclose their assets. Should they refuse to comply or continue hiding their wealth, the court’s enforcement department may seize assets within the scope of known leads and use the online asset-tracing system to check for bank accounts, real estate, vehicles, and other holdings under the debtor’s name. If any asset clues are found within China, these can be legally seized and frozen. Moreover, if the other party has deliberately moved assets overseas to evade enforcement—and the situation is severe enough—this could even constitute a criminal offense under the law. Therefore, if the non-faulting party discovers after the divorce that the spouse continues to conceal assets and refuses to honor the court’s decision, they can report the matter to the enforcement court and request criminal prosecution against the spouse, thereby encouraging full compliance with the court’s order.

Case Source: Notice of the Supreme People's Court on the Release of the 14th Batch of Guiding Cases (Fa [2016] No. 311), Guiding Case No. 66

In a divorce lawsuit involving a couple from Beijing, the wife suspected her husband of transferring a substantial rental income of 195,000 yuan during their marriage. After the court reviewed the husband’s bank statements, it was confirmed that he had indeed withdrawn and transferred this sum—via ATM withdrawals and online transfers—to his brother’s account prior to the divorce proceedings. During the trial, the husband initially claimed the money was used for household expenses, but later changed his story, claiming it was meant to repay external debts. However, he failed to provide any evidence, leaving his explanations contradictory and implausible. Based on these inconsistencies, the court concluded that the husband had deliberately concealed and transferred marital assets. Under Article 47 of the then-applicable Marriage Law (the old version at the time), the court ordered an unequal distribution of the disputed funds: the husband was required to compensate his wife with 120,000 yuan out of the 195,000 yuan he had transferred. As a result, the wife received approximately 62% of the transferred amount, significantly higher than the usual 50-50 split. This decision effectively penalized the husband by inflicting a substantial financial loss. This landmark case clearly conveys the judiciary’s stance: individuals who secretly transfer marital assets before divorce without providing a reasonable explanation may face reduced asset allocations under the law, ensuring fairness and protecting the rights of the other spouse.

Case Source: (2021) Supreme People's Court Min Zhong No. 700

In this case, the husband and wife were originally the actual controllers of a certain company, holding control over assets worth hundreds of millions. When the wife filed for divorce, she alleged that her husband had transferred nearly 400 million yuan in hidden company profits by using three personal financial accounts, and thus requested a larger share of the marital property. During the first-instance trial, the court verified the claims by meticulously reviewing account records, applying a calculation method that added "amounts transferred outward," "cash withdrawals," and "account balances," then subtracted "amounts transferred inward." This analysis revealed that the husband had concealed and siphoned off as much as 380 million yuan through the three accounts. Given the substantial amount involved and the solid evidence presented, the court, in accordance with legal provisions, largely upheld the wife's claim, awarding her 55% of the concealed assets. As a result, the husband lost more than half of his previously hidden share of the marital wealth. The Supreme Court, in its key ruling principles, emphasized the need for strict enforcement against any attempt to hide jointly owned marital property.

Case Source: (2024) Yu Min Shen No. 639

The central issue in this case is whether Song should receive a smaller share of the marital property involved in the dispute. The controversy centers on the equity in Company A held under Huang Mou1's name during the marriage between Song and Huang Mou1. According to Article 1,092 of the Civil Code of the People's Republic of China: "If one spouse conceals, transfers, sells off, damages, or squanders marital property, or fabricates joint debts with the intent to encroach upon the other spouse's assets, such spouse may receive a reduced or no share when dividing marital property upon divorce. After the divorce, if the other spouse discovers any of these actions, they may file a lawsuit with the People's Court to request a re-division of the marital property." While the law primarily addresses the division of transferred marital assets—specifically, those that have been moved—it does not limit its application solely to such cases. Instead, the criteria for determining whether to award a reduced or no share should be assessed flexibly based on factors like the value of the damaged property, the total amount of marital assets, and the degree of fault attributable to each party, taking into account the specific circumstances of the case. In light of the facts presented in this case, the first- and second-instance courts correctly ruled that Huang Mou1 would retain 28% of the equity in Company A, while Song would receive 22%, in compliance with the legal provisions.

Case Source: (2022) Hu0115 Minchu 71501

In this case, the wife, Ms. Xu, discovered that her husband, Mr. Chen, had transferred a portion of their joint marital savings prior to the divorce proceedings. During the court hearing, the judge asked Mr. Chen to account for a large-amount transfer, but he was unable to provide a reasonable explanation. After carefully reviewing bank statements and other evidence, the court determined that Mr. Chen had indeed attempted to transfer and conceal their shared marital assets. As a result, the court ordered him to compensate Ms. Xu financially according to the law. The judge emphasized in this case that any property acquired during the marriage is considered jointly owned by both spouses and held in equal shares. Both spouses have an equal right to manage and dispose of these joint assets. Consequently, the total sum of 593,000 yuan that the plaintiff transferred to a third party should be treated as marital property subject to division. The defendant’s act of transferring this amount—593,000 yuan—to the third party’s account was deemed a deliberate attempt to hide marital assets. Therefore, when dividing the marital property, the court ruled that the defendant should receive a smaller share than the plaintiff. Ultimately, the court awarded the plaintiff compensation of 349,870 yuan from the defendant.