[Direct answer]If you discover that the other party has transferred the couple's joint property or other family assets, you should follow three steps: First, immediately fix the evidence and save the bank statements, real estate registration, securities and insurance policy holdings, and large-scale consumption records; Second, apply to the court for pre-litigation or litigation property preservation, freeze the deposits, seize the real estate, and block the subsequent transfer; Third, claim that the other party should receive a smaller share or no share in the divorce or property division litigation. According to Article 1092 of the Civil Code, the party who hides, transfers, sells, damages, or squanders the couple's joint property or forges joint debts may receive a smaller share or no share in the division; if discovered after the divorce, the party may sue for a second division within three years from the date of discovery. It is crucial not to confront the other party directly or engage in "reciprocal transfers". Instead, you should fix the evidence and proceed with preservation and litigation simultaneously. For more details, please refer to the following link:Specialised legal servicesAndBeijing Henglue Law Firm.

I. Legal basis and interpretation of provisions

1. Article 1092 of the Civil Code of the People's Republic of China (effective January 1, 2021)

When dividing the couple's joint property in a divorce, the party who conceals, transfers, sells, damages, or squanders the couple's joint property, or forges the couple's joint debts with the intent of appropriating the other party's property, may be allocated a smaller share or no share of the joint property. After the divorce, if the other party discovers the aforementioned actions, they may file a lawsuit with the people's court to request a re-division of the couple's joint property. The legislative purpose is to curb malicious appropriation and ensure fair division. The prerequisite for application are that the property belongs to the joint property and the actions are malicious. The key points of evidence are abnormal fund flows, such as large-scale transfers within a short period of time, transfers to close relatives or specific individuals. A common dispute is the boundary between normal consumption and malicious transfers. The court will make a comprehensive judgment based on the amount, time, and purpose of the transfers. Large-scale abnormal expenses during periods of conflict escalation or before and after litigation are most likely to be identified as malicious transfers.

2. Articles 103 and 104 of the Civil Procedure Law of the People's Republic of China (effective January 1, 2024)

Article 103 stipulates that in a lawsuit, if the actions of a party or other reasons may make it difficult to enforce the judgment or cause other damages to the party, the court may, upon the application of the other party, order property preservation; Article 104 stipulates that where the interested party, before initiating a lawsuit or applying for arbitration, is in an urgent situation and failure to immediately apply for preservation will cause irreparable damage to its legitimate rights and interests, it may apply to the court with jurisdiction for pre-litigation preservation. After accepting the application, the court must make a ruling within 48 hours. The applicant shall initiate a lawsuit or apply for arbitration within 30 days after taking preservation measures, otherwise the preservation will be lifted. Preservation usually requires providing a guarantee. Freezing and sealing measures can directly prevent the other party from disposing of assets and are the most powerful tools to combat asset transfer.

3. Practical adjudication guidelines

In practice, courts review whether it constitutes a transfer of property mainly based on three aspects: the amount and time. Large-scale abnormal expenditures during the fermentation period of divorce disputes or in the year preceding litigation will be subject to close scrutiny; the destination of the funds—if transferred to close relatives or third parties, it will generally be deemed malicious; and the purpose of the transfer—normal family expenses and medical/educational expenses are generally not considered transfer of property. Regarding the standard of proof, after the applicant provides preliminary evidence of the transaction records, the court usually requires the transferor to explain the reasonable purpose of the transfer. If the explanation is unreasonable or clearly against common sense, it can be deemed malicious. At the preservation stage, insurance companies' litigation preservation liability insurance bonds can replace cash as guarantees, significantly reducing costs. Pre-litigation preservation measures have stricter requirements for guarantees and time limits, so it is advisable to complete them under the guidance of a lawyer. In the enforcement stage, those who refuse to fulfill their obligations may be subject to the crime of refusing to execute judgments, which carries strong deterrent force.

II. Henglue Lawyer's Practical Experience

Practical observations of Henglue in handling such cases: Common forms of transfer include withdrawing cash or transferring money to parents on the eve of divorce, fabricating debts under the guise of "repaying debts", transferring property to relatives at low prices, and using others' accounts to hold deposits. There are three coping strategies: First, investigate before taking action. Before suing, apply for an investigation order through a lawyer or use daily retained vouchers to clarify the asset base to avoid tipping off the other party; Second, proceed with preservation first. Submit applications for preservation and guarantee materials simultaneously with the lawsuit to freeze the assets before the other party disposes of them again; Third, make good use of the rule of dividing assets equally or not at all. Based on the abnormal transaction records, require the other party to explain the purpose of the transactions, creating evidentiary pressure, which often leads to mediation and concessions. The most common pitfalls for clients: They spend the account balance themselves first, only to be counterclaimed for an equal division of assets; After discovering the transfer, confronting the other party face-to-face may lead to the other party accelerating the concealment or alteration of registration. The correct approach is to fix evidence, maintain communication and restraint, and simultaneously advance preservation and litigation.Divorce-related family disputesThe earliest possible commissioning of the scheme design.

III. Frequently Asked Questions

Q1: What constitutes transferring property?

Typical scenarios include: withdrawing large sums of cash or transferring funds to others' accounts within a short period of time; selling property and vehicles at low prices; making large-scale gifts to close relatives or third parties without the other party's consent; fabricating debts to use the jointly owned property for "repayment"; depositing salaries and dividends into others' accounts for a long time; and using jointly owned property to purchase property and vehicles for third parties. The key to judgment is "abnormality": the amount obviously exceeds daily expenses, the time is concentrated in the period before or after the intensification of conflicts or litigation, and the destination points to related persons. Normal family living expenses, medical and education expenses, and investments agreed upon by both parties are not considered transfers. After discovering suspicious transactions, don't tip off the other party. First, keep the electronic receipts and account details intact, and then let the lawyer evaluate and characterize them and design a evidence-gathering plan.

Q2: What are the requirements and costs for property preservation?

The conditions include: the existence of disputed property, the other party's actions or circumstances that may make the judgment difficult to enforce, and the provision of corresponding guarantees; pre-litigation preservation must also be sued or applied for arbitration within 30 days after the court takes measures. The guarantee can be in the form of cash, real estate, or a surety bond from an insurance company's litigation preservation liability insurance. The cost of the surety bond is usually a certain percentage of the amount of the preservation, which is much lower than the capital occupied by cash guarantees. The preservation fee is prepaid by the applicant and will ultimately be shared according to responsibility. In urgent situations, the court must make a ruling within 48 hours after accepting the application. It is recommended to apply for preservation at the same time as suing, and to provide accurate clues about accounts and real estate. The more accurate the preservation clues are, the higher the efficiency of the freeze will be; after the preservation, the applicant can apply for an inquiry into the asset status to confirm the effectiveness of the preservation.

Q3: If you discover that the other party has transferred assets after the divorce, can you still pursue legal action to recover them?

Yes. According to Article 1092 Paragraph 2 of the Civil Code, if one party discovers that the other party has hidden, transferred, sold, damaged, or squandered the joint property during the marriage or at the time of divorce, or has falsified debts, they may file a lawsuit with the court to request a re-division of the property. The statute of limitations for such a lawsuit is three years from the date of discovery, and the party may also request a reduced or no share for the other party. The necessary documents include the original divorce documents, new evidence of the hidden assets, and evidence of the transfer, such as bank statements and the results of property registration inquiries. Practical tips: Even if the divorce agreement states that "the property has been fully divided," a request for a re-division of the hidden or transferred assets can still be claimed. After discovering the evidence, it is necessary to promptly hire a lawyer to verify and collect evidence, and pay attention to the three-year statute of limitations. Failure to do so within the time limit will result in the loss of the right to win the case.

Q4: Can we trace the transfer without the other party's account information?

It can be partially traced. After filing a lawsuit, you can apply to the court for an investigation order, and use the order to retrieve the other party's bank statements, securities holdings, insurance policies, real estate and vehicle registrations, as well as WeChat and Alipay bills. If you know the general bank where the account is held, the search scope will be more precise; if you have no clues at all, you can start with the salary card and family spending account during the period of cohabitation to trace back the clues. In the pre-litigation stage, individuals have no right to inquire into the other party's account, and mainly rely on daily retained receipts, account books, and chat records. It is recommended to pay attention to family financial documents in daily life, and take photos and archive them if any abnormalities are found. For large-scale abnormal expenditures that have been traced, you can require the other party to explain the purpose of the expenditure. If the explanation is unconvincing or contradictory, you can treat it as a transfer and let the other party bear the adverse consequences.

Q5: Will the party transferring the property be sentenced to prison?

It depends on the circumstances. Transferring the property that has been sealed, seized, or frozen in the litigation may constitute a crime of illegally disposing of the sealed, seized, or frozen property if the circumstances are serious; refusing to execute the judgment or decision after it takes effect and hiding or transferring the property to make the judgment or decision impossible to execute may constitute the crime of refusing to execute the judgment or decision according to Article 313 of the Criminal Law, and the person committing the crime shall be sentenced to fixed-term imprisonment of not less than three years but not more than seven years if the circumstances are particularly serious; and appropriating property by fabricating debts or filing false lawsuits may also involve the crime of false litigation. Most cases are mainly civil remedies, and the main paths are to divide or redistribute the property. Criminal means are used as a deterrent and a fallback. Whether to initiate a case shall be reviewed by the public security organ in accordance with the law. It is recommended that lawyers first evaluate the strength of the evidence before considering reporting the case to the police. The authenticity of the relevant contracts and debts can be referred to for reference.Contract dispute resolution services.

IV. Suggestions for Protecting Rights

  • Normally, pay attention to the flow of large amounts of money in your family and immediately take a screenshot and archive it, and print out the bank statement if you find any abnormal transactions.
  • After discovering signs of transfer, avoid confronting the other party directly and entrust a lawyer as soon as possible to develop a plan for evidence collection and preservation.
  • The lawsuit was filed simultaneously with an application for property preservation, and a guarantee letter was used to replace the cash guarantee in order to reduce costs.
  • Collect information on the registration of real estate, vehicles, and equity, and apply for an investigation order in the lawsuit to expand the scope of the inquiry.
  • If a person discovers that their spouse has hidden assets after divorce, they must file a lawsuit for a second division of assets within three years from the date of discovery.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with evidence materials, to avoid missing the statutory time limit. →Specialised services Legal services·Beijing Henglu Law Firm