When children lack sufficient funds to purchase a home after marriage, parents often transfer hundreds of thousands or even millions of yuan in support. If the couple later divorces, parents and children may collude to claim that the transferred funds were loans, seeking to hold the spouse jointly liable for repayment. Such lawsuits have become increasingly common in recent years. Judicial standards are clear: the nature of the funds cannot be determined solely based on post-hoc IOUs; instead, courts must consider the true intent at the time of transfer and the underlying circumstances of the contribution, in order to prevent fabricated debts from infringing upon the spouse's property rights.

  Pursuant to relevant judicial interpretations of the Civil Code, where parents provide funds for their children's post-marital home purchase without an agreement or with an unclear agreement, the recipient of the gift shall be determined in accordance with applicable legal provisions. Meanwhile, the party asserting the existence of a loan relationship bears the burden of proving that a mutual understanding to borrow was established. In judicial practice, the governing principle for review is as follows: whether the transfer constitutes a gift or a loan depends on the parties' intent at the time of fund delivery; a pr  omissory note signed retroactively carries relatively low probative value and must be corroborated by other evidence demonstrating that a loan agreement existed at the time of fund delivery.

  The court distinguishes three scenarios when rendering judgments. First, if parents explicitly state at the time of transfer that the funds are a gift to one child and provide a written declaration, or if the contribution and registration circumstances indicate a gift to their own child, the spouse has no right to divide such assets. Second, if parents issue a loan note at the time of contribution, or if the child's spouse is aware of or subsequently ratifies the transaction, it is deemed a joint marital debt to be repaid by both spouses. Third, where only a loan note is retroactively drafted without contemporaneous evidence of borrowing, and the spouse denies the debt, courts tend to presume a gift; a retroactively issued loan note cannot override the spouse's rights, thereby preventing collusion between the child and parents to fabricate debts in the event of divorce.

  It is also necessary to examine whether the purpose of the funds is connected to the family. If the loan was indeed used to pay for the purchase of a home and the property is registered under both spouses' names, some courts may, even if there are defects in the mutual agreement on borrowing, make a comprehensive determination based on the principle of fairness. Conversely, if the funds for the home purchase were not used for the family but were squandered by a child individually, then the spouse is not liable.

One spouse should preserve the transfer remarks, chat records, and recordings of family meetings made at the time of the home purchase contribution to fix the true intentions of all parties. When parents provide funds, whether as a gift or a loan, their intent must be clearly expressed in writing before or after the transfer to avoid future disputes over differing accounts.

  It is worth noting that the Judicial Interpretation (II) on Marriage and Family of the Supreme People's Court took effect on February 1, 2025. This interpretation includes specific provisions regarding the treatment of property purchased with funds contributed by parents: during the subsistence of a marriage, if one party's parents fully finance the purchase of a home and the property is registered solely in the name of their child, the people's court may, upon division of assets in a divorce proceeding, adjudicate that the house shall belong to the child whose parents provided the full contribution. In determining whether the party who acquires the house should compensate the other party, and in setting the amount of such compensation, the court shall comprehensively consider factors such as the duration of cohabitation, circumstances related to childbearing, fault leading to the divorce, contributions made to the family, and the current market value of the property. This new regulation places greater weight on the source of funding, and the judicial approach to such cases is accordingly evolving.

  In summary, the nature of parental financial contributions made during marriage is determined by the true intention expressed at the time of the transfer; retroactively drafted IOUs lack sufficient evidentiary weight. Only by clearly expressing one's intent and preserving written evidence can disputes over the nature of such contributions arising from changes in children's marital status be avoided.