Can funds lent by the elderly to their children during their lifetime and bank deposits withdrawn by the children be recognized as inheritance?

Lufa Case [2026] 154

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An elderly person lends money to their children

Children withdraw bank deposits entrusted to them by the elderly person for safekeeping

After the elderly person dies, can it be recognized as inheritance?

For children who have fulfilled their primary support obligations

And children who lived together with the elderly person

In the distribution of the estate, can they receive a larger share?

Case Summary

Wang has six children, including Xiao Jia and Xiao Yi. His spouse passed away early. In his later years, Wang was mainly cared for by Xiao Yi with respect to meals and daily living, and the bank cards were also entrusted to Xiao Yi for safekeeping. On May 23, 2021, Xiao Jia borrowed 50,000 yuan from Wang and actually delivered the money; the promissory note was kept by Xiao Yi. On January 23, 2022, Xiao Yi, following Wang’s instructions, withdrew 30,000 yuan from the bank account for expenses for their shared living and for the treatment of Wang’s illness, leaving an account balance of 70,000 yuan. On April 22, Wang died without leaving a valid will. The other children repeatedly demanded that Xiao Jia and Xiao Yi divide the misappropriated 150,000 yuan of the estate (including Xiao Jia’s 50,000 yuan loan and the 30,000 yuan withdrawn by Xiao Yi). After failed negotiations among the six siblings, the remaining four children sued Xiao Jia and Xiao Yi in court.

At trial, Xiao Jia argued that the 50,000 yuan loan was a gift from Wang, and that Wang had clearly told him he did not need to repay it. Xiao Yi argued that during Wang’s lifetime, Wang was mainly supported by himself; the 30,000 yuan he withdrew was mainly used for Wang’s disease treatment and daily living expenses such as electricity and water bills, and he had even advanced many expenses himself.

Court Proceedings

The issues in this case are: first, whether heirs’ withdrawal of the decedent’s pre-death property can be recognized as part of the estate; second, whether heirs’ loans to the decedent can be recognized as part of the estate; third, how to distribute funds among heirs who have fulfilled their primary support obligations.

After examining the case, the court held that, under Article 1122 of the Civil Code of the People’s Republic of China, an estate is the lawful personal property left by a natural person upon death. Where the property cannot be inherited under the law or according to its nature, it shall not be inherited. A heir’s private transfer or private expenditure shall be recognized as part of the estate and distributed; if there is evidence proving that the funds were used for the decedent’s living or consumption expenses, or evidence proving that the funds were a gift from the decedent, then they should not be distributed. Whether the funds withdrawn by the children while the decedent was ill constitute estate property should be determined by clarifying whether the funds were gifts from the decedent before death or were used for reasonable expenditures. In this case, the bank card transaction details of Wang show that as of January 23, 2022, the 30,000 yuan was withdrawn, and it is clear that Wang’s bank account balance before his death was 70,000 yuan. At trial, Xiao Yi submitted relevant utility bills and medical bills, all incurred after January 23, 2022, which can prove that these expenses were used for Wang’s living and disease treatment; therefore, this 30,000 yuan should be deducted from the estate.

Article 118 of the Civil Code of the People’s Republic of China provides that civil subjects are entitled by law to claim debts. A debt right is the right, under a contract, tort, management without mandate, unjust enrichment, and other provisions of law, for a right holder to request a specific obligor to do or not do a certain act. A legitimate debt right, as a property right, falls within the scope of the estate and does not extinguish upon the death of the lender. After the creditor dies, the legitimate debt right it holds as part of the estate can be inherited by heirs. In this case, in light of the promissory note submitted by Xiao Yi, the parties’ statements, and other effective judgments, it is possible to prove the fact that Xiao Jia borrowed 50,000 yuan from Wang. Although Xiao Jia asserted that the sum was a gift from the decedent, he failed to submit corresponding evidence. Therefore, it is determined that this 50,000 yuan should be treated as Wang’s estate and divided.

Article 1130 of the Civil Code of the People’s Republic of China provides that, for heirs inheriting an estate in the same order, their share generally should be equal. For heirs who have special difficulties in life and lack the ability to work, they should be cared for when distributing the estate. For heirs who have fulfilled the primary support obligations toward the decedent or lived together with the decedent, they may receive a larger share when distributing the estate. For heirs who have the ability and conditions to support but who do not fulfill their support obligations, when distributing the estate, they should receive none or a smaller share. Where heirs agree through consultation, unequal shares may also be applied. In this case, since the decedent Wang did not leave a will regarding estate distribution, the property left by him should be divided through statutory inheritance; therefore, the estate shares are jointly inherited by the six children. Based on the facts found, Wang lived with Xiao Yi during his lifetime, and Xiao Yi took care of his meals and daily living (including paying electricity bills, purchasing medicine, etc.). Xiao Yi had fulfilled the primary support obligations during the decedent’s lifetime, and the other children all acknowledged the above facts; therefore, when distributing the estate, Xiao Yi should receive more.

Ultimately, the court ruled that, after deducting Xiao Yi’s reasonable expenses (30,000 yuan), the remaining 70,000 yuan in bank deposits and the 50,000 yuan loan are part of the estate; Xiao Yi received 2/7, while each of the other children received 1/7. After the first-instance judgment was made, the plaintiff was dissatisfied and filed an appeal. The court of second instance upheld the first-instance judgment, and did not support its appeal claims. This judgment has taken effect.

Judge’s View

Family affection is a bond stronger than water. Whether between parents and children or among siblings, there is an unbreakable tie of kinship. It is natural that, after elders pass away, family members should support and watch over one another, yet cases in which inheritance division leads to a courtroom dispute are by no means rare. An estate is the lawful personal property left by a natural person at death, including income and tangible assets (real estate, vehicles, savings, gold and silver jewelry, etc.), investment and financial assets (bank deposits, wealth management products, stocks, creditor’s rights and company equity, etc.), property rights related to intellectual property, and other lawful property. Inheritance inheritance disputes often involve complex familial ties and emotional entanglements, affecting family peace and social stability. When hearing such cases, it is necessary to balance the rigidity of the law with the warmth of reason, and to properly resolve disputes through fair adjudication and emotional awakening.

In families with multiple children, elderly people in their later years often rely on children taking turns to care for them. When elders live in a child’s home, out of emotional considerations they may give the child some property, or the child may keep the bank card and withdraw the elder’s funds for safekeeping. Whether such property can be recognized as inheritance after the elder’s death depends on the specific circumstances. On the one hand, the elder’s act of giving property may be regarded as a gift. Pursuant to Articles 657, 661, and 663 of the Civil Code of the People’s Republic of China, a gift contract is one where the donor gives his or her own property to the donee free of charge, and the donee indicates acceptance of the gift. Generally, gifted property does not fall within the category of inheritance, but evidence is needed to prove that the transfer was a gift. If, at the time of making the gift, the elder attached relevant obligations (for example, when gifting a bracelet requiring siblings to get along harmoniously), the donee should fulfill the agreed obligations. If the donee fails to perform the obligations agreed under the gift contract, the donor may revoke the gift. In addition, if the donee has an obligation to support the donor but does not fulfill it, the donor may also revoke the gift. On the other hand, when children keep the elder’s bank cards and withdraw the elder’s funds, it is necessary to look at whether the withdrawn funds are used for the elder’s daily living or for disease treatment. If used for the elder’s living or consumption expenses, they do not fall within the scope of the estate; if not used for the elder’s living and consumption expenses or if the withdrawal was made without the elder’s consent, it may be deemed misappropriation and should fall within the scope of the estate. In addition, a child’s act of borrowing money from an elder has the same legal effect as ordinary private lending. If evidence can be provided to prove that the lending relationship was established, the debt right belongs to the decedent’s property rights and falls within the scope of the estate. The heir may inherit the debt right according to law and divide it according to the nature of the estate.

Where the decedent did not leave an effective will, an agreement for legacy support, or similar instruments, statutory inheritance must be applied to distribute the estate. Article 1130(3) of the Civil Code of the People’s Republic of China provides that, for heirs who have fulfilled their primary support obligations toward the decedent or who lived with the decedent, when distributing the estate, they may receive a larger share. This provision encourages heirs who have fulfilled their primary support obligations or lived together with the decedent; its main purpose is to promote the fine traditions of the Chinese nation and protect the elder’s lawful rights. “Primary support obligations” refers to the support provided in terms of life, such as cooking, caring for, nursing, etc., or mainly bearing the living expenses of the decedent, thereby providing economic support. Some heirs have lived with the decedent for a long time, cared for one another and shown thoughtfulness, and played a role in comforting the decedent, especially the elderly, emotionally; in reason, they should receive more in the inheritance share.

Legal Provisions

Article 118 of the Civil Code of the People’s Republic of China Civil subjects are entitled by law to claim debts.

A debt right arises from a contract, an act of infringement, management without mandate, unjust enrichment, and other provisions of law; it is the right of the obligee/right holder to request the specific obligor to do or not do a certain act.

Article 1122 An estate is the lawful personal property left by a natural person upon death.

Property that, under provisions of law or according to its nature, may not be inherited shall not be inherited.

Article 1130 The shares of an estate inherited by heirs in the same order of succession generally should be equal.

For heirs who have special difficulties in life and lack labor ability, they should be given care when distributing the estate.

For heirs who have fulfilled the primary support obligations toward the decedent or lived together with the decedent, they may receive a larger share when distributing the estate.

For heirs who have the ability and conditions to support but do not fulfill their support obligations, they should receive none or less when distributing the estate.

If heirs agree through consultation, shares may also be unequal.

Author: Li Guoyue, Liu Peng, Zhang Heng

Source: Zaozhuang City, Shizhong District People’s Court

Editor: Ma Congcong

【Source: Shandong Higher People’s Court】