Hello, this is Attorney Lee Young-Kyung from Cheongchul Law Firm.

Today we examine the Korean Supreme Court decision rendered on May 29, 2026 in Case No. 2025Da219501 (claim for transfer of ownership registration). The case involves a couple married for roughly 40 years, where one spouse transferred a share of real property to the other by gift, and then, once separation and divorce disputes had crystallized, claimed that the property had in fact been held under a title trust (myeong-ui-shintak) and sought a re-transfer of ownership. The Supreme Court reversed and remanded the lower court ruling on the ground that the burden of proving title trust had not been discharged. As this issue often arises in divorce and marital-property division disputes, we summarize the key points below.

[Question]

In a marriage of long duration, can one spouse who transferred ownership of real property to the other by gift later claim, just as divorce and marital-property division loom, that the transfer was actually a title trust and demand re-transfer of ownership on the basis of its termination?

[Answer]

The Supreme Court held that real-property registration is presumed to have been made on a lawful cause, so the party asserting a title trust bears the burden of proof. Considering the 40-year marriage, that the title deed was kept at the couple's home, that the registration costs and property taxes were likely paid out of joint marital assets, and that there is no objective evidence of any prior assertion of rights before the divorce dispute, the Court found that a title trust could not be recognized and reversed the lower court ruling that had upheld the plaintiff's claim.

1. Facts of the case

a. The plaintiff registered marriage with the defendant on April 9, 1980 and had three children.

b. After the plaintiff's father passed away, on January 23, 2007, a 14/63 share of the land at issue, part of the inherited estate, was transferred to the plaintiff under an inheritance-division agreement.

c. By July 11, 2016, the plaintiff acquired all remaining shares from the other co-heirs and obtained sole ownership of the entire land.

d. By May 18, 2018, the plaintiff transferred to the defendant a combined share of 36.014/63 of the land (the “Subject Share”) by gift and other causes.

e. On or about September 30, 2023, the plaintiff threw a glass bottle at the defendant, causing bruising around the eye and injury to the left side of the head, and the couple began living separately around that time.

f. On May 9, 2024, the plaintiff filed the present lawsuit against the defendant seeking re-transfer of ownership of the Subject Share on the basis of termination of title trust.

g. The defendant thereafter filed for divorce, and on February 20, 2025 a settlement was reached providing that “the parties shall divorce, and marital-property division shall be decided separately after the settlement.”

2. Lower court ruling – title trust recognized, plaintiff's claim upheld

The lower court (Cheongju District Court Decision dated October 24, 2025, Case No. 2025Na50702) upheld the plaintiff's claim on the following grounds: that the plaintiff had held the Subject Share under a title trust with the defendant.

(i) The land is said to contain the ancestral grave of the plaintiff's family, and the plaintiff and the other co-heirs appear to have agreed that “the plaintiff would be the sole registered owner and manage and cultivate the land, with the proceeds of any later sale to be divided.” (ii) Since registering the Subject Share, the plaintiff has retained the title deed, bore the registration costs, and paid all taxes on the land through around 2023. These were the lower court's principal grounds.

3. Supreme Court ruling – reversal and remand

a. Governing legal principles – presumption of registration and burden of proving title trust

The Supreme Court reaffirmed the settled rule that “real-property registration is presumed, by its very formal existence, to have been made upon a lawful cause, and the party asserting that the registration was held under a title trust bears the burden of proving that fact” (see Supreme Court Decision dated March 28, 2000, 99Da36372; Supreme Court Decision dated July 14, 2022, 2018Da263069). The Court further held that the principle of free evaluation of evidence does not permit arbitrary judicial fact-finding: factual findings must be based on admissible evidence obtained through lawful procedures, in accordance with justice, equity, logic, and experience, and a trial court's discretion in fact-finding has limits.

b. Application to the case – five circumstances making title trust difficult to recognize

(1) Location of the ancestral grave: There is no evidence that the plaintiff's claimed ancestral grave is on the land. The evidence the plaintiff submitted (Exhibits 24, 25, 26) suggests the grave is on different land, and the plaintiff withdrew the assertion that the grave was on the land at the second hearing of the first instance.

(2) Doubt over the alleged agreement: The “sole-name registration with later distribution of sale proceeds” agreement found by the lower court is not recorded anywhere in the inheritance-division agreement of March 18, 2016 or related documents. Nor is there any indication that the other co-heirs disputed the plaintiff's sole ownership before the divorce arose.

(3) Possession of the title deed: As the plaintiff and the defendant lived together for over 40 years as a married couple, and the title deed was kept at the couple's home, it cannot be said that the plaintiff held it alone. The length of the marriage, the place of safekeeping, and the circumstances of separation make it difficult to infer a title trust from this fact alone.

(4) Registration costs and property taxes: Although the registration costs and the property taxes from around 2018 to 2023 were all paid from accounts in the plaintiff's name, the plaintiff and defendant lived as a married couple in a long-term economic community, the defendant handled household duties and child-rearing and contributed to the formation and maintenance of joint assets, and the plaintiff appears to have managed the joint property. On these facts, those expenses may well be regarded as having been paid out of joint marital assets.

(5) Absence of any prior assertion of rights before the divorce dispute: There is no objective evidence that, before the divorce dispute arose, the plaintiff ever asserted to the defendant any right over the Subject Share. The defendant's argument—that the plaintiff is belatedly raising a title-trust claim around the time of the divorce in order to exclude the Subject Share from marital-property division—is persuasive.

c. Conclusion – reversal and remand

Nevertheless, the lower court had upheld the plaintiff's claim by finding that the Subject Share had been held under a title trust with the defendant. The Supreme Court held that this was an error that “exceeded the limits of free evaluation of evidence contrary to the rules of logic and experience, and misapprehended the legal principles concerning the presumption of registration and the burden of proving title trust, which affected the judgment.” The Court therefore reversed the lower court ruling and remanded the case to the Cheongju District Court.

4. Implications – limits of title-trust claims in divorce and marital-property disputes

The Supreme Court Decision 2025Da219501 illustrates concretely how, in cases where one spouse claims that property registered in the other spouse's name was “in fact a title trust” once divorce and marital-property division have arisen, that claim may be rejected.

In particular, the key takeaways are: (i) the presumption of registration must be rebutted by clear evidence on the part of the party asserting title trust; (ii) where spouses have been married for a long time, retention of the title deed, payment of taxes, and bearing registration costs may well be evaluated as “management out of joint marital assets”; and (iii) the absence of any objective evidence of a title-trust assertion before the divorce dispute may be evaluated as a claim made to evade marital-property division. In practice, when property is transferred between spouses, it is important to leave a written record clearly identifying the cause and nature of the transfer (gift, title trust, simple management entrustment, etc.) to prevent disputes, and a party intending to assert a title trust at the divorce stage should carefully examine the timing of the claim, the degree of evidence gathered, and the history of past exercise of rights.