Conjugal Property Philippines

Conjugal Property Philippines

 

Conjugal Property in the Philippines is property owned by married spouses.

If you are not legally married, then there is no conjugal property.

If you are legally married, then you most likely have Conjugal Property in the Philippines.

When there is Conjugal Property separation leads to the division of the property. Separation must be a legal separation – i.e. a court case.

A kasulatan will not end Conjugal Property in the Philippines.

Only a court case will.

What is Conjugal Property Philippines?

 

Conjugal Property Philippines is property the belongs to both spouses.

When 2 Filipinos marry, the property that each individual owns becomes owned by both of them.

When 2 Filipinos end the marriage through a court case, the conjugal property regime ends (this is actually why Annulment in the Philippines is so popular – people are very concerned about property).

When there is property that is part of Conjugal Property separation (only a legal separation through the court) leads to the division of that property between the spouses.

Conjugal Property is equally split between the spouses generally.

Conjugal Property Philippines: Example

 

Let’s do an example.

Let’s say Phillip decides to marry.

Phillip has the following:

  • A car, titled in his name
  • A condo, titled in his name

If he marries Maria today, then Maria will own one half of these properties as Conjugal Property

When there are properties part of Conjugal Property Separation (say Phillip and Maria decide to get an annulment) will mean that these Conjugal Properties are divided between them.

Conjugal Property Philippines: How do I avoid it?

 

To avoid Conjugal Property in the Philippines, you must execute a Prenuptial Agreement before you are marriage.

What about after you are married?

No, you cannot avoid Conjugal Property after you are married if you did not execute a Prenuptial Agreement prior to the marriage.

So, after you are married there is nothing you can do about Conjugal Property unless both spouses agree.

Prenuptial Agreement Philippines: Can we execute a Prenuptial Agreement after the marriage?

 

No, you cannot execute a Prenuptial Agreement Philippines or Marriage Settlement after the marriage.

Art 74 of the Family Code of the Philippines states

The property relations between husband and wife shall be governed in the following order … by contract executed before the marriage …”

Art. 77 further states:

The Marriage Settlements and any modification thereof shall be in writing, signed by the parties and executed before the celebration of the marriage.

So, you must execute a Prenuptial Agreement in the Philippines before the marriage is celebrated.

Prenuptial Agreement Philippines: What are the requirements?

 

The Prenuptial Agreement Philippines should fulfill the below requirements:

  • The Prenuptial Agreement must be executed before marriage
  • It must be signed by both spouses
  • Notarized and ideally registered at the place of marriage and the property registry of the specified assets

Prenuptial Agreement Philippines: What should a Prenuptial Agreement contain?

 

A Prenuptial Agreement in the Philippines should state:

  • Which Conjugal Property regime is to be used. There are 3 Conjugal Property Regimes: Absolute Community of Property, Conjugal Gains, Complete Separation of Property and any other arrangement that you elect.
  • The general information and valid IDs of each party
  • Specific properties can be mentioned.

Please make sure that it is run through by a lawyer first.

The additional amount that you spend for the lawyer is more than worth it when it can potentially affect your whole life.

What are the types of Conjugal Property Philippines?

 

Conjugal Property in the Philippines has 3 types that you can choose amongst when you create your Prenuptial Agreement in the Philippines.

These affect how the property is divided between the spouses.

It is important to know this when you are making a Prenuptial Agreement Philippines.

It is also important to know this when you are ending a marriage so you can determine who gets what.

(When there is Conjugal Property separation through a court case will cause the properties to be divided. Each different type of Conjugal Property has a different outcome as different things are included.)

The 3 regimes of Conjugal Property in the Philippines are:

  • Absolute Community of Property
  • Conjugal Gains
  • Complete Separation of Property

What is Absolute Community of Property (Marriages before Aug 3, 1998)?

 

Absolute Community of Property is the default Marriage Regime if your marriage was celebrated on or after August 3, 1988.

This means type of Property Regime means that individual property is shared.

If you have property before your marriage, it will form part of Conjugal Property.

If your spouse to has property before your marriage, it will form part of Conjugal Property in the Philippines.

And all property either of you buys during the marriage will be part of Conjugal Property in the Philippines.

If the marriage ends under Absolute Community, then this Conjugal Property will be divided between the spouses.

Conjugal Property: What is a spouse share if he/she did not contribute to buying the property in Absolute Community?

 

What if he did not contribute a single centavo to buying the property? Does he still get a share?

Yes, even if he did not contribute a single centavo to buying the property he still gets a share.

Remember that what I state here applies to the Absolute Community Property Regime, which is for marriages on or after August 3, 1988.

That is what the law states:

Art. 91 Unless otherwise provided in this Chapter or in the marriage settlements, the community property shall consist of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter.

There therefore is a share for the spouse who does not contribute to the property which will always be true so long as you remain married.

This is why people go through Annulment in the Philippines, because Annulment does 3 things:

  1. It allows remarriage
  2. Ends the property regime so that a spouse does not get any share of a future property and
  3. Removes the spouse as an heir

Annulment is the fastest, cheapest way to do this which is why it is so popular.

(That is why it is mostly Annulment that is commonly known – it is really the best way.)

Any other options I can think of that would do all the things that Annulment does are far more expensive, more difficult and have more uncertainty.

Conjugal Property Philippines: What is a spouse’s share of an Inheritance in Absolute Community

 

If the inheritance was during the marriage, then the spouse doesn’t get a share of the inheritance.

If the inheritance was before the marriage, then the spouse has a share.

An inheritance is classified as a gratuitous transfer.

A gratuitous title is an when property is inherited or donated.

So, how the property was acquired and when matters in determining whether the spouse has a share.

Conjugal Property Philippines: What else is excluded from Conjugal Property in Absolute Community?

 

So aside from donated property, inheritances that occurred after the marriage, personal items such as clothing shall not form part of community property (although jewelry does form part of Conjugal Property.

In addition, the law does excludes property acquired by either of the spouses who has legitimate descendants from a former marriage. [Art. 92, Sec 3]

Let’s analyze that bit by bit.

If there are legitimate children from a former marriage, then the property acquired by that spouse is not part of Conjugal Property.

So, if there are illegitimate children from one spouse, then the that property that that spouse owns still forms part of Conjugal Property.

Also –

If the prior marriage is annulled using psychological incapacity, the children remain legitimate, so the property that that spouse owns still forms part of Conjugal Property.

However –

If the prior marriage was annulled and the children become illegitimate, then the property that that spouse owns does not form part of Conjugal Property.

Important:

Property acquired during the marriage is presumed to belong to the community, unless it is proved that it is one of those excluded therefrom. [Art 93, Family Code]

If you allege that property is not part of Conjugal Property, then you are going to have to prove it.

You will explain and defend that because all government agencies will assume that the property is Conjugal Property.

So, there are going to be more requirements, more work and more you will have to prove when this happens so be prepared.

Conjugal Property Philippines: Does the Conjugal Property pay for the debt incurred by one spouse?

 

Yes, the Conjugal Property pays for the debt incurred by one spouse.

Art 94, lists debts the Community Property must pay for:

(2) All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the community, or by both spouses, or by one spouse with the consent of the other;

(3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have been benefited;

(7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family;

(9) Antenuptial debts of either spouse other than those falling under paragraph (7) of this Article, the support of illegitimate children of either spouse, and liabilities incurred by either spouse by reason of a crime or a quasi-delict, in case of absence or insufficiency of the exclusive property of the debtor-spouse, the payment of which shall be considered as advances to be deducted from the share of the debtor-spouse upon liquidation of the community; and

In many situations, most lender will go after the Conjugal Property.

If you allege that the debt should not be paid by the Conjugal Property of it the Conjugal Property is not enough, you will have to fight it out. The lender may also go after your separate properties.

What is Conjugal Partnership of Gains (Marriages before Aug 3, 1998)?

 

Conjugal Partnership of Gains was the default Conjugal Property regime for marriages before August 3, 1988.

You and your spouse can also elect this property regime in your Prenuptial Agreement Philippines.

In Conjugal Partnership of Gains, the net gains acquired during the marriage are divided equally among them.

Just like Absolute Community, it can only be avoided by a Prenuptial Agreement in the Philippines done before the marriage. Please read section on Prenuptial Agreements.

You cannot do a Prenuptial Agreement after the marriage – this will not affect the Conjugal Property Regime if that was the Regime chosen/default regime.

Conjugal Property: What is a spouses share if he/she did not contribute to buying the property in Conjugal Partnership of Gains?

 

Any property acquired by one spouse as a result of his work during the marriage is part of Conjugal Partnership of Gains.

Any property that was acquired before the marriage is Exclusive Property. Any property that was inherited or donated during the marriage is also Exclusive Property.

Let’s do an example.

If Phillip has a car, a condo and Php 10 million before marriage, then this is his Exclusive Property.

Say he decides to marry Maria under Conjugal Partnership of Gains.

The car, the condo and the Php 10 million are still his Exclusive Property.

But if he decides to rent out the condo during the marriage, then the earnings form part of Conjugal Partnership of Gains.

And if he works a job and buys a second condo during the marriage while Maria stays at home to take care of the kids, this second condo forms part of Conjugal Partnership of Gains.

What if he used his 10 million Exclusive Property to buy a 3nd condo during marriage? Then that is still part of his Exclusive Property, although the rental income from that would be part of the Conjugal Partnership of Gains.

Sounds confusing?

It can be.

When a marriage under Conjugal Partnership of Gains ends, an accounting must be made and proof presented of Exclusive Property.

Proof can be hard to find.

But you must find proof because:

Art. 116 All property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved.

Conjugal Property Inheritance: What is a spouse’s share of an Inheritance in Conjugal Partnership of Gains?

 

If it was inherited before the marriage, then it forms part of Exclusive Property and is not part of Conjugal Property of Gains.

If it was inherited after the marriage, then it forms part of Conjugal Property and is not part of Conjugal Property of Gains.

So, inherited property (as well as any donated property) is not part of Conjugal Partnership of Gains.

Inheritance as well as donated property is treated differently in Conjugal Partnership of Gains vs Absolute Community, so you really need to know which Conjugal Property Philippines regime you are in.

Conjugal Property Philippines: What is excluded from Conjugal Property in Conjugal Partnership of Gains?

Above, I had an example of how Conjugal Partnership of Gains works.

Right now, I will define it.

  • That which is brought to the marriage as his or her own;
  • That which each acquires during the marriage by gratuitous title;
  • That which is acquired by right of redemption, by barter or by exchange with property belonging to only one of the spouses; and
  • That which is purchased with exclusive money of the wife or of the husband.

Let me explain this briefly.

Everything that is exclusive property is anything owned before the marriage.

And if exclusive property is money, and that money is used to buy a condo, that condo remains Exclusive Property.

However, anything earned by either of the spouses or Exclusive Property (such a rental income in this example) is Conjugal Property.

Conjugal Property Philippines: Does the Conjugal Partnership of Gains pay for the debt incurred by one spouse?

 

Yes, mostly likely creditors will go after the Conjugal Property of Gains and is very like Absolute Community in that sense.

Conjugal Property Philippines: Complete Separation of Property

 

Complete Separation of Property is exactly what it says it is.

You both own and administer to your own property.

However, you are both liable to creditors for family expenses.

Note that you have to choose Complete Separation of Property in  Prenuptial Agreement for this to be the marriage regime.

Conjugal Property Separation: What happens to Conjugal Property when a marriage ends?

 

Conjugal Property only ends for the following reasons:

  • Death of a spouse
  • Legal Separation case
  • Judicial Separation of Property case
  • Court Case for Annulment in the Philippines

Let’s discuss each of the cases.

Legal Separation is a court case that:

  1. Ends the Conjugal Property Regime.
  2. Does not end the marriage and does not allow remarriage
  3. It is hostile, difficult and contains more risk than annulment
  4. It is more expensive than Annulment in the Philippines because it is hostile
  5. The spouse still remains a Compulsory Heir – you need a Will and also another court case called Probate to remove him. Check out our article on Notarial Wills or Holographic Wills (Link to our article) to understand. Disinheritance requires grounds and Probate is a very expensive type of court case.

Bottomline Legal Separation vs Annulment (Link to our article) is more expensive and riskier and you would also need another case called Probate to remove him as an heir.

Judicial Separation is a court case that:

  1. Ends the Conjugal Property Regime.
  2. Does not end the marriage
  3. It generally requires both spouses to agree and sign the document. If one spouse initiates proceedings, the Conjugal Property will very likely be enforced as to your property regime, meaning it will divide the property as explained above. It doesn’t give you ownership of the property.
  4. The spouse still remains a Compulsory Heir – again, a Will and a Probate court case is required to remove him/her. Read on Notarial Wills or Holographic Wills (Link to our article) to understand. Disinheritance requires grounds and Probate charges about 1.5% of property costs just for filing fees!

Bottomline: Judicial Separation requires both spouses to agree and you will need to go through an expensive Probate to remove the spouse as a Compulsory heir.

Annulment in the Philippines is a court case that

  1. Ends the Conjugal Property Regime.
  2. End the marriage
  3. Removes the other spouse as an heir.

Bottomline: Annulment in the Philippines is the most popular option because it is the cheapest, fastest way to do all of the above things.

Also note –

Any deviation from the above or any effort to try to get control of the Conjugal Property is going to be a very long, very expensive court case especially if the other side fights it.

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