Divergent Rules on Heir Order and Inheritance Shares Across Jurisdictions

(1) Property owned by one spouse before marriage, or property acquired in that spouse’s own name during marriage, shall be the separate property of such spouse;

(2) Property whose ownership between spouses is unclear shall be presumed to be joint‑owned property of the spouses.

(1) Unless the spouses have agreed otherwise by a marital property contract, their marital property regime shall be the accrued‑gains community of property.

(2) The property of the husband and the property of the wife do not become joint property of both spouses. The foregoing sentence shall also apply to property acquired by either spouse after marriage. Upon termination of the accrued‑gains community of property, the accrued gains realised by each spouse during the marriage shall be equalised.

(1) The surviving spouse shall be a statutory heir. Where inheriting alongside lineal relatives of the first order, the surviving spouse shall inherit one‑quarter of the estate. Where inheriting alongside lineal relatives of the second order or grandparents and grandmothers, the surviving spouse shall inherit one‑half of the estate. If descendants of grandparents and grandmothers inherit together with the grandparents and grandmothers, the surviving spouse shall also receive from the other half of the estate the share that would have devolved upon such descendants under Article 1926.

(2) If there are neither lineal relatives of the first or second order nor grandparents or grandmothers, the surviving spouse shall inherit the entire estate.

Chinese Legal Provisions Governing Foreign‑related Inheritance

1. The decedent’s habitual residence at the time of death was situated in a foreign country;
2. Heirs (e.g., spouses, children) are foreign nationals or have their habitual residence abroad;
3. Disputed estate comprises movable or immovable property located overseas (immovable property is prima facie governed by lex situs);
4. The juristic fact giving rise to succession (e.g., the decedent’s death, will‑making) occurred in a foreign jurisdiction.

Statutory succession shall be governed by the law of the decedent’s habitual residence at the time of death. Succession to immovable property shall, however, be governed by the law of the place where the immovable property is situated.

• Immovable property succession: Regardless of the decedent’s habitual residence, succession to immovables is governed by lex situs. For example, real estate located within China is subject to Chinese law.
• Movable property succession: Governed in principle by the law of the decedent’s habitual residence at death. Given the mobility of movables, they bear the closest connection to the decedent’s habitual residence. Application of that jurisdiction’s law gives effect to the most‑significant‑relationship principle and better safeguards estate administration and heir entitlements.

Case Study: Decedent Died in Japan – Movable Property Originally Thought Subject to Chinese Law, Immovables Subject to Japanese Law

I. Material Facts of the Case

1. Parties: Decedent Zheng X and Shen M registered their marriage on 1 January 2013; no children were born of the marriage. Zheng XX and Wang XX were Zheng X’s parents.
2. Key dates and locations: Zheng X passed away of illness in Japan on 13 July 2015 without executing a will. His household registration in Yangpu District, Shanghai, was cancelled in December 2015 upon notification of death. Shen M currently resides in Japan.
3. Material assets:
   • Held in Zheng X’s name: Bank of China account (balance: CNY 49.37 as at 20 June 2017); China Construction Bank credit card (no deposit).
   • Held in Shen M’s name: Bank of China account (balance: CNY 848.26 as at 20 June 2015, previously holding wealth‑management products worth CNY 304 000 and CNY 378 000, plus JPY 416 000 cash deposit); Alipay account (balance: CNY 1 021.61 as at 24 June 2015); China Construction Bank account (balance: CNY 22 990 as at 31 December 2012; CNY 50 000 transferred by Zheng XX, CNY 333 600 transferred by Cao XX (Shen M’s mother) and CNY 16 400 cash were credited in 2013 and invested in wealth‑management products; balance fell to zero on 6 February 2014).
   • Other sums: Cao XX delivered two cash payments totalling JPY 975 000 and JPY 981 000 to Shen M. Shen M contended these were loans, whereas Zheng XX and Wang XX claimed they formed part of the estate. Both sides acknowledged that medical expenses for Zheng X totalled JPY 2 000 000 but disputed who bore payment.

II. Claims of Plaintiffs (Zheng XX and Wang XX)

1. First‑instance claims: Partition the following assets held in Shen M’s name as at the date of Zheng X’s death and inherit Zheng X’s share thereof:
   • Bank of China account balance of CNY 848.26; wealth‑management products of CNY 304 000 and CNY 378 000 in that account; JPY 416 000 cash deposit.
   • JPY 975 000 and JPY 981 000 delivered by Cao XX (Shen M’s mother).
   • Alipay account balance of CNY 1 021.61.
2. Appellate claims: Set aside the first‑instance judgment and uphold all first‑instance claims. Plaintiffs argued that the first‑instance court mischaracterised CNY 350 000 held by Shen M as wealth‑management proceeds; Shen M had failed to prove that her deposits included premarital property, and the Japanese‑yen funds in her possession ought to be partitioned and inherited.

III. Defence of Defendant (Shen M)

1. First‑instance defence:
   • The CNY 360 000 represented funds entrusted by her mother Cao XX for wealth‑management investment; principal plus interest of CNY 400 000 had already been repaid.
   • Evidence demonstrated that deposits included premarital assets; certain Japanese‑yen sums were double‑counted, and JPY 2 000 000 had been spent on Zheng X’s medical treatment.
2. Appellate defence:
   • This is a foreign‑related inheritance dispute. Zheng X’s habitual residence at death was Japan; succession to movable assets should therefore be governed by Japanese law.
   • Under the Japanese Civil Code, the monies in her name constituted her separate property and did not form part of Zheng X’s estate.
   • She acknowledged that Mr. and Mrs. Zheng XX travelled to Japan in October 2014 but denied cohabitation. She contended she held no personal savings, that borrowings covered Zheng X’s medical costs, and that a JPY 2 000 000 donation from Zheng X’s employer was in her keeping.

IV. Judgments of the Courts

(1) First‑instance Judgment

1. Applicable law: Applied the Inheritance Law of the People’s Republic of China. Finding Zheng X to be a Chinese national, the court ruled that domestic assets should be disposed of under Chinese law.
2. Asset findings and distribution:
   • The balance in Zheng X’s Bank of China account devolved one‑half each to Zheng XX and Wang XX.
   • Balances in Shen M’s Bank of China and Alipay accounts, together with Renminbi funds in her possession, remained Shen M’s property. Shen M was ordered to pay CNY 50 000 each to Zheng XX and Wang XX.
   • The partition claims of Zheng XX and Wang XX over the three Japanese‑yen sums were dismissed (no evidence proved the monies remained in Shen M’s possession). The court took note of their waiver of inheritance rights over the Shanghai real estate registered under Shen M’s name.

(2) Second‑instance Judgment

1. Correction of applicable law: This is a foreign‑related dispute concerning succession to movable property. Pursuant to Article 31 of the Law on Application of Laws to Foreign‑related Civil Relations, the law of Zheng X’s habitual residence at death (Japanese law) governs the case. The first‑instance court’s error in selecting the governing law was corrected.
2. Characterisation of assets:
   • Pursuant to Article 762 of the Japanese Civil Code, the JPY 975 000, JPY 981 000 delivered by Cao XX and the CNY 350 000 in wealth‑management proceeds constituted Shen M’s separate property.
   • The CNY 848.26, JPY 416 000, Alipay balance of CNY 1 021.61 held by Shen M, plus the portion of the CNY 304 000 and CNY 378 000 wealth‑management products net of CNY 350 000, were treated as matrimonial property of unclear ownership and presumed to be joint marital property.
3. Final ruling: The property‑distribution outcome of the first‑instance judgment was affirmed (the discretionary monetary awards were reasonable). All three parties’ appeals were dismissed. Second‑instance court fees totalling CNY 11 880 were borne equally by Zheng XX, Wang XX and Shen M, each paying CNY 5 940.