Some insist on equal division as if these were part of the estate, while others argue for prioritizing those who lived with the deceased. Judicial standards are clear: since pension and funeral subsidies are disbursed after the decedent's death, they do not constitute part of the estate and cannot be disposed of via a will. In allocating these funds among close relatives, courts apply principles similar to those governing estate distribution, with appropriate consideration given to relatives facing financial hardship or those who have fulfilled greater obligations toward the deceased.

  The legal boundaries of an estate serve as the premise for determination. Pursuant to Article 1122 of the Civil Code, an estate comprises the lawful personal property left by a natural person at the time of their death, with the critical temporal point fixed at the moment of death. Death benefits are consolatory payments issued by the state or an employer to the deceased's close relatives following the death, while funeral expense subsidies compensate for funeral costs. Both arise after death, and their beneficiaries are the close relatives rather than the deceased themselves; consequently, they do not meet the temporal and ownership characteristics of an estate and therefore do not constitute part of the estate.

  The fact that death benefits do not constitute part of the estate gives rise to three direct consequences: first, a deceased person cannot dispose of death benefits by will; if a will stipulates that such benefits shall go to a particular child, that disposition is invalid. Second, death benefits are not used to settle the deceased's outstanding debts, and creditors have no right to claim them. Third, disputes over the distribution of death benefits cannot be resolved by applying the rules governing testamentary succession; instead, they are handled according to the rules on co-ownership among close relatives. The persons eligible to participate in the distribution are close relatives who lived together with the deceased, such as spouses, children, and parents; the specific scope is determined in accordance with the relevant issuance policies and generally must fall within the first-order close relatives.

  The allocation principles follow those for inheritance but are more flexible: first, actual funeral expenses are deducted; the remaining balance is distributed among close relatives through negotiation. If negotiations fail, the court shall consider, at its discretion, the closeness of each close relative's cohabitation with the deceased, their financial hardship, and their contributions to caring for the deceased during their lifetime. Children who have lived with the elderly person for many years and borne the primary duty of support may receive a larger share, while those with stable income who have generally neglected caregiving may receive a smaller share; distribution is not mechanically equal. The party claiming a share must prepare evidence of familial relationships, receipts for funeral expenses, and documentation of cohabitation and care provided to the elderly. Supplementary pensions or condolence payments issued by an employer shall be handled in accordance with the employer's policies and by analogy to the above principles.

  The nature and standards of various types of payments differ. Pension benefits for dependents of public institution and government agency employees are governed by separate policies from those applicable to enterprise employees: the former typically include a lump-sum death benefit and living hardship subsidies for dependents, while the latter follow regulations on funeral grants and death pensions. In commercial insurance, death benefits are paid to designated beneficiaries; if no beneficiary is designated, they are treated as part of the estate. In disputes over distribution, it is essential first to identify the nature of each payment item individually and then apply the corresponding distribution rules accordingly. Conflating death pensions, subsidies, and insurance proceeds, or broadly asserting that all should be divided equally as estate assets, is generally untenable. Death pensions and funeral grants are not estate assets and cannot be disposed of via will; instead, they should be allocated among close relatives with due regard to circumstances, similar to estate distribution. To fairly resolve such family disputes, funeral expenses should first be deducted, followed by an equitable apportionment based on overall financial hardship and contributions to caregiving.