Foreign divorce in China (III) Custody and Alimony Issues

Exploring the complexities of asset divisions in international divorce cases often proves contentious and intricate.

In this second part of our International Divorce article, we cover extensively regarding asset division and ownership of foreigners and their spouse in the divorce process in China.

01. What property belongs to the personal property of one of the spouses in the event of divorce?

Article 1063 of the Civil Code clearly outlines the personal assets of an individual spouse, which, upon marriage, remain separate and do not become shared property with the other spouse.

(i) Premarital property, defined as assets owned by an individual prior to marriage registration, retains its status as personal ownership unless otherwise specified by mutual agreement.

(ii) Personal Injury Compensation: Any damages or compensation received by either party for bodily injury sustained by an individual, directly associated with the injury, is considered personal property.

(iii) Property designated in a will or gift agreement as belonging exclusively to one party.

(iv) Household items set aside for personal use by an individual, like clothing and personal care items, are typically regarded as personal property.

(v) The law also offers a broad guideline to encompass other instances of clearly personal property and to accommodate the varied aspects of social life. When determining the allocation of property, an asset can only be classified as personal property if it doesn't fit into the first four categories mentioned above but exhibits distinct personal exclusivity. If the classification of the property is ambiguous, it is treated as shared property.

02. What property belongs to the joint property of husband and wife?

 The Civil Code and the Interpretation on the Application of the Marriage and Family Part of the Civil Code specify that the following assets constitute the shared property of the spouses.

i) Earnings, bonuses, and compensation for work performed.

ii) Income generated from production, business activities, and investments.

(iii) Income derived from intellectual property rights.

(iv) Inherited or donated assets, excluding those specifically designated in a will or gift contract as belonging solely to one party.

(v) Profits obtained from investments made by one of the parties using their personal assets.

(vi) Housing subsidies and housing funds received or entitled to be received by both spouses.

(vii) Basic pension and bankruptcy resettlement compensation received or eligible for both parties.

(viii) Other assets that are designated for joint ownership

03. Can the spouses agree that property acquired during the marriage and pre-marital property shall belong to each of them?

Yes. Indeed, both parties should sign a written agreement, or the assets acquired during the marriage will be deemed joint property of the spouses unless otherwise provided in laws. We strongly recommend notarizing the relevant property agreement to guarantee its validity and recognition by the court in the event of any disputes.

04. How is the joint property of husband and wife distributed by the Chinese court in case of divorce?

 In principle, assets are typically distributed equally, following a 50/50 division. However, Chinese courts have the discretion to allocate a larger portion to the party responsible for childcare, the woman, or the innocent party, based on the specific circumstances of the property.

05. How is the property purchased for both parties at the expense of one parent to be distributed in the event of divorce?

If the house was bought by the parents of one party of the spouses before their marriage, it shall be deemed as the gift to their own child unless expressly stated by the parents that the gift belongs to the spouses. If the house was bought by the parents of one party of the spouses after their marriage, it follows the agreement made by the couple regarding the house at that time. If there is no agreement or the agreement is ambiguous, unless the parents explicitly intended the gift for only one of the spouses, the property is considered a gift to the spouses and thus becomes joint marital property.

                                                                                  Question & Answers

Q. (1) Can the spouse who has contributed more to the family ask for compensation from the other spouse?

A.In accordance with Article 1088 of the Civil Code, a spouse who has taken on more significant responsibilities such as child-rearing, elderly care, or supporting the other spouse in their endeavors, holds the right to seek compensation from the other party in the event of divorce. However, the Civil Code does not define specific criteria for this compensation, often resolved through negotiation between the spouses or by the court's decision.

Q (2)  In the event of a divorce, if one of the parties is cheating on his/her spouse, how can the other party maximize his/her interests in the division of property?

A.  As per Article 1091 of the Civil Code, if one spouse cohabits with another individual, leading to divorce, the innocent party is entitled to seek compensation from the party at fault.

Article 1091 of the Civil Code grants the innocent party the right to seek compensation in cases where circumstances leading to divorce are attributable to the fault of the other party.

(i) Bigamy

(ii) Living together with someone else.

(iii) Family  violence

(iv) Abuse or abandonment of family members

(v) Other major faults.

Q (3)  What should be done if one of the spouses is found to have transferred property during the divorce?

A.  If one of the spouse is found to have concealed, transferred, sold, damaged, or recklessly spent shared marital assets, or attempted to incur joint debts deceitfully to seize the other spouse's property, the court may, during the divorce asset division process, allocate a reduced or no share of the marital assets to that spouse. If such misconduct is discovered by the other party after the divorce, they have the right to petition the court for a reconsideration of the division of the couple's shared assets.

Q (4) What debts are shared by both spouses?

A (i) Debts jointly signed and acknowledged by both spouses.

(ii) Debts accumulated by one spouse, for which the other spouse subsequently acknowledges joint responsibility.

(iii) Debts accumulated by one spouse in their own name during the marriage to cover the family's everyday necessities (excluding debts exceeding these needs.

Q. (2) How are joint debts to be paid by both spouses?

 A.  Both parties are responsible for payment.

Divorce can be a complex and emotionally taxing process, especially for expatriates in China. Understanding the complexities of custody and alimony laws is crucial for ensuring a fair and smooth resolution. This article aims to provide expatriates with essential insights into the custody and alimony issues that may arise during a divorce in China, helping them navigate this challenging period with greater confidence and clarity.

Part 1. Who does custody of the child belong to after divorce ?

Chinese law prioritizes children's welfare in custody decisions. Article 1058 of the Civil Code grants both parents equal rights and responsibilities for their upbringing. Custody arrangements consider factors like stability, care giving abilities, and the child's preferences when applicable. Here are key circumstances where custody may be granted to either parent.

(1) Who gets custody if the children are under the age of two?

If children are under two, the mother typically has custody. However, the People's Court may grant custody to the father if the mother is in specific circumstances such as:

(i) If the mother is suffering from long-term contagious disease or serious illness making it unsuitable for the children to live with her.

(ii) If the mother is able but unwilling to fulfill her support obligations, and the father requests custody.

(iii) If other factors, such as economic or living environment issues, make it unsuitable for the child to live with the mother then the court may grant guardianship to the father. Additionally, the courts often favor the father's custody of children under two if both parents agree it's best for the child's well-being.

 (2)  What about Children who have reached the age of two and have not yet reached the age of eight? 

For a child aged two or older, custody should be decided by mutual agreement. If both of the parents cannot agree on child support, the court will consider each parent's ability and circumstances to support the child, prioritizing the child's healthy development.

In cases where both parents seek direct custody, Article 46(I) of the Judicial Interpretation of the Marriage and Family Codification (I) (the “Interpretation”) outlines the following criteria for the court to prioritize guardianship in the child's best interest:

(i) If either of the parent is sterilized or otherwise unable to have children.

(ii) If the child has lived with one parent for a long time, changing their living environment would clearly be detrimental to the child's healthy development.

(iii) One of the parents has no other children, while the other parent does.

(iv) The child lives in a healthy environment with one parent, while the other parent has a serious illness or conditions harmful to the child's health, making it unsuitable for them to live together.

(3) Who gets custody for Children aged eight and older ?

If the child’s parents cannot agree on custody for a child aged eight or older, the child may choose the parent he/she wishes to live with based on their own judgments and choices.

However, children over the age of eight are not entirely free to choose which parent to live with. The child's wishes are given consideration only if both parents are willing and able to take on the responsibility of support. This balanced approach provides assurance that the child's preferences are respected while also guaranteeing that environment will also benefit to their development.

(4) What other specific cases may influence the decision of custody?

(i) If both parents are capable and willing to care for the child, but the child has lived with a grandparent who is willing and able to continue care, the court may consider this in custody decisions. The stable living arrangement and emotional bond with the grandparent can influence custody prioritization.

(ii) In a divorce between a biological parent and a stepparent, custody reverts to the biological parent if the stepparent opts out of raising the stepchildren. The stepparent can choose to provide financial support voluntarily, but it is not legally required.

(iii) Adopted children have the same rights and responsibilities as biological children, so the same provisions apply. However, if one spouse consistently opposed the adoption, custody after divorce goes to the adopting parent.

(iv) When determining custody for multiple children, courts prioritize mutual parental agreement, pursued through litigation if needed. If children are no longer breastfeeding, the court aims to assign custody fairly, considering financial obligations, child development, and parental capabilities. For breastfeeding infants, decisions prioritize the child's best interests, often leading to equal custody division.

(v) In unusual case if both parents agree to switch guardianship responsibilities, the court may allow it if it benefits the children's well-being.

Part 2. Change of Child’s Guardianship 

(1) Are parents allowed to change arrangements of custody by agreement after divorce?

Yes, both parents have the ability to modify child support arrangements through a mutual agreement. If one parent fails to uphold the terms of the agreement, the other parent can seek legal action to enforce the changes to the child support arrangement as agreed upon.

(2) Any changes in specific circumstances that may lead to change of custody?

In certain circumstances either of the parent can seek the change custody under the following conditions:

(i) The parent with whom the child currently resides is unable to continue caring for them due to arisen of significant illness or disability.

(ii) If the custodial parent neglects their duty to care for the child, engages in child abuse, or if their lifestyle negatively affects the child's physical or mental well-being.

(iii) An eight-year-old child expresses a desire to reside with the other parent, who is fully capable of providing for their needs.

(iv) There are additional legitimate grounds for requesting modification.

Part 3. How is Alimony calculated by the court?

(1) What is generally included in the alimony?

The alimony primarily includes the costs for the child's living expenses, education, and medical care.

(2) How is the alimony support assignment to custodial and non custodial parent?

Upon divorce, the non-custodial parent is required to contribute to child support financially. The amount and duration of these payments are either mutually agreed upon or determined by the court if no agreement is reached but most importantly, even if the custodial parent changes the child's surname without consent, the non-custodial parent remains obligated to pay support.

(3) Under what circumstances can a child request an increase of the original alimony amount?

In the following situations, a child may ask the parent with the financial means to provide additional support.

(i) The initial alimony is inadequate to maintain the local standard of living.

(ii) The child's actual needs have surpassed the original amount due to illness or educational expenses.

(iii) Other valid reasons to justify the increase.

(4) What are the criteria for alimony in practice?

(i) Parents with a fixed income: child support is generally 20% to 30% of their gross monthly income. If supporting two or more children, this may increase but usually does not exceed 50%.

(ii) Parents without a fixed income: alimony is typically based on their annual income or industry average, usually 20% to 30% of their average annual earnings or the previous year's local cost of living.

(iii) In rare cases, alimony may be adjusted up or down by mutual consent or court decision.

(iv) Child support is based on a percentage of the parents' income, the child's needs, parents' financial capabilities, and local living standards. Support should meet basic needs if the parent's income is low and cover regular expenses if the parent's income is higher, without being excessive. The aim is to benefit the child without misusing funds for asset redistribution.

(5) What are the payment methods of alimony?

The alimony should be paid regularly or as a lump sum if feasible. In unusual cases where there is no income generated by the parent or the whereabouts of the custodian or non custodian parent are unknown, the child's maintenance may be deducted from their assets.

(6) How long is the typical duration for alimony?

(i) Usually until the child turns 18.

(ii) Parents may cease alimony payments for children aged 16 to 18 if their main source of income is from employment.

(iii) Under certain circumstances, adult children who are not yet self-sufficient may receive essential support. This includes those still pursuing education up to high school level or below, or those having lost the ability to work due to reasons beyond their control, preventing them from maintaining a normal standard of living.

(7) What are the consequences if maintenance payments are not made on time?

If alimony payments are not made in due time, the recipient can seek court enforcement, compelling the defaulting party to fulfill their obligations. In response, the court may freeze bank accounts, real estate and other assets. The court can restrict their travel on high-speed trains and airplanes, and potentially limit their ability to leave the country.