Marriage Settlement and Property Regimes

1.      What is a marriage settlement?

A marriage settlement is an agreement executed between two parties who plan to get married, in preparation for the property regime that would govern their conjugal property during the marriage. Such agreements are also commonly known as “Pre-Nuptial Agreement”.

 

“The future spouses may, in the marriage settlements, agree upon the regime of absolute community, conjugal partnership of gain, complete separation of property, or any other regime. In the absence of a marriage settlement, or when the regime agreed upon is void, the system of absolute community of property as established in this Code shall govern.” (Article 75 of the Family Code of the Philippines)

 

2.      What is a property regime?

A property regime is the set of rules agreed upon by the parties, before getting married, which would govern their property relations during the course of their married life.

 

3.      What are the different kinds of property regimes in the Philippines?

There are three kinds of property regimes which are recognized by the laws of the Philippines:

  1. Regime of Absolute Community of Property
  2. Regime of Conjugal Partnership of Gains
  3. Regime of Complete Separation of Properties

 

4.      Explain the Regime of Absolute Community of Property.

In the Regime of Absolute Community of Property, the husband and the wife become co-owners of all the properties that they bring into the marriage and those acquired by either or both of them during the course of their marriage, save for some exceptions. (Article 90 of the Family Code of the Philippines)

The administration and enjoyment of the community property shall belong to both the spouses jointly. (Article 96 of the Family Code)

Neither spouse may donate any community property without the consent of the other. (Article 98 of the Family Code)

The Regime of the Absolute Community of Property is the default property regime that would govern the property relations of a couple who had not executed a marriage settlement prior to their marriage.

 

5.      Explain the Regime of Conjugal Partnership.

In Regime of Conjugal Partnership of Gains, the husband and the wife retain ownership over their respective properties. The Parties place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance. Upon dissolution of the marriage or of the partnership, the net gains or benefits obtained by either or both spouses shall be divided equally between them, unless otherwise stated in the marriage settlements. (Article 106 of the Family Code of the Philippines)

The administration and enjoyment of the conjugal partnership shall belong to both spouses jointly. (Article 124 of the Family Code of the Philippines)

Neither spouse may donate any conjugal partnership property without the consent of the other. (Article 125 of the Family Code of the Philippines)

 

6.      Explain the Regime of Complete Separation of Properties.

In the Regime of Complete Separation of Properties, each spouse shall own, dispose of, possess, administer and enjoy his or her own separate estate, without need of the consent of the other. To each spouse shall belong all the earnings from his or her profession, business or industry and all fruits, natural, industrial or civil, due or received during the marriage from his or her separate property. (Article 145 of the Family Code of the Philippines)

The Parties are free to manage their respective properties without interference from the other spouse. Likewise, the Parties are also free to donate without interference of the other.


7.      What is the conjugal partnership responsible for?

The conjugal partnership shall be liable for:

a)      The support of the spouse, their common children and the legitimate children of either spouse; however, the support of the illegitimate children shall be governed by the provisions on this Code on Support;

b)      All debts and obligations contracted during the marriage by the designated administrator-spouse for the benefit of the conjugal partnership of gains, or by both spouses, or by one of them with the consent of the other;

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

d)      All taxes, liens, charges and expenses, including major and minor repairs upon the conjugal partnership property;

e)      All taxes and expenses for mere preservation made during the marriage upon the separate property of either spouse;

f)       Expenses to enable either spouse to commence or complete a professional, vocational or other activity for self-improvement;

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

h)      The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational or other activity for self-improvement, and

i)        Expenses of litigation between the spouses unless the suit is found to be groundless.

 

If the conjugal partnership is insufficient to cover the foregoing liabilities, the spouses shall be solidarily liable for the unpaid balance with their separate properties.

 

8.      Are we required to have a marriage settlement to get married?

No, it is not mandatory that couples planning to get married must execute a marriage settlement. Absent of a marriage settlement, the property regime that would govern the property relations, as stated in the Family Code of the Philippines, would be “Absolute Community of Property”.

 

9.      When should the marriage settlement be executed by the Parties?

The marriage settlement should be executed prior to the celebration of the marriage of the Parties, for the marriage settlement to be valid. (Article 76 of the Family Code of the Philippines)

 

10.  What if the couple decided after their marriage to execute a marriage settlement?

The marriage settlement would not be valid. For the marriage settlement to be valid, it must be executed prior to the celebration of the marriage. Any other time after the celebration of the marriage, would render the marriage settlement as void.

 

11.  What if the couple decides to modify their valid and existing marriage settlement after the celebration of their marriage?

Likewise, any modifications to the marriage settlement must be done prior to the celebration of the marriage, for the modifications to be valid. Any later, after the celebration of the marriage, would render the modification to the marriage settlement as void and it would not be applied to the marriage settlement. (Article 76 of the Family Code of the Philippines)

 

Post-marriage modification of marriage settlements can take place only where:

(a) The absolute community or conjugal partnership was dissolved and liquidated upon a decree of legal separation;

(b) The spouses who were legally separated reconciled and agreed to revive their former property regime;

(c) Judicial separation of property had been had on the ground that a spouse abandons the other without just cause or fails to comply with his obligations to the family;2

(d) There was judicial separation of property under Article 135; or

(e) The spouses jointly filed a petition for the voluntary dissolution of their absolute community or conjugal partnership of gains.

 

12.  When would the property regime commence?

The property regimes shall commence at the precise moment that the marriage is celebrated.

 

13.  Can the Parties stipulate some other time, apart from the celebration of the marriage, for the property regime to commence?

No, the property regime will only commence at the celebration of the marriage and no other time. Any stipulation contrary to this would be contrary to law which provides that any stipulation, express or implied, for the commencement of the property regime at any other time shall be void. (Article 88 of the Family Code of the Philippines)

 

14.  Is there a need for the marriage settlement executed by the Parties be registered in a specific government agency?

No, there is no need for the Parties to register the marriage settlement in a specific government agency. Because the marriage settlement is between the Parties, it is valid because it is in the nature of a contract. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. (Article 1159 of the New Civil Code of the Philippines)

However, the marriage settlement shall not prejudice third persons unless they are registered in the local civil registry where the marriage contract is recorded as well as in the proper registries of properties. (Article 77 of the Family Code of the Philippines)

 

15.  Can the spouses mutually agree to dissolve their conjugal partnership?

Yes. The husband and the wife may agree upon the dissolution of the conjugal partnership during marriage, subject to judicial approval. All the creditors of the husband and of the wife, well as of the conjugal partnership, shall be notified of any petition for judicial approval of the voluntary dissolution of the conjugal partnership, so that any such creditors may appear at the hearing to safeguard his interests. Upon approval of the petition for dissolution of the conjugal partnership, the court shall take such measures as may protect the creditors and other third persons. (Article 191 of the New Civil Code of the Philippines)

 

16.  What are the instances that a spouse may ask for judicial separation, as stated under Article 135?

Under Article 135, a spouse may petition the court for judicial separation of property in case of the following instances below:

a)      That the spouse of the petitioner has been sentenced to a penalty which carries with it civil interdiction;

b)      That the spouse of the petitioner had been judicially declared an absentee;

c)      That loss of parental authority of the spouse of the petitioner has been decreed by the court;

d)      That the spouse of the petitioner has abandoned the latter or failed to comply with his or her obligations to the family as provided for in Article 101;

e)      That the spouse granted the power of administration in the marriage settlement has abused that power;

f)       That at the time of the petition, the spouses have been separated in fact for at least one year and reconciliation is highly improbable.

 

17.  If I had gotten married without making any marriage settlement or pre-nuptial agreement, would there be a property regime that would govern our property relations?

In the absence of a marriage settlement or a pre-nuptial agreement between the Parties, the Regime of Absolute Community of Property would govern the property relations of the Parties.

 

18.  If we did not execute any marriage settlement before our marriage, may we still change our property relations during our marriage?

No, any modifications to the marriage settlement must be made before the celebration of the marriage, for the modifications and changes to be valid. (Article 76 of the Family Code of the Philippines)

However, the Parties may jointly file a verified petition with the court for the voluntary dissolution of the absolute community or the conjugal partnership of gains, and for the separation of their common properties during their marriage. (Article 136 of the Family Code of the Philippines)

 

19.  I had executed a marriage settlement with my fiancé but our marriage did not push through. What will happen to the marriage settlement agreed between us?

The marriage settlement would be rendered void because the consideration of a marriage settlement is the marriage itself. However, if there are provisions or stipulations in the marriage settlement that does not depend upon the occurrence of the marriage, those stipulations shall be valid.

 

20.  I got married to my husband on 04 January 1986, without making a pre-nuptial agreement. Which property regime would govern our property relations, considering that the Family Code had not yet been enacted?

For marriages that were celebrated before the enactment of the Family Code, the marriage would fall under the Civil Code. Under the Civil Code, the default property regime, in the absence of a pre-nuptial agreement, is the “Conjugal Partnership of Gains.”

 

21.  I recently married my husband, an American citizen and we executed a pre-nuptial agreement. Would the pre-nuptial agreement be binding in the Philippines, despite the fact both our marriage and the marriage settlement, was celebrated in the United States?

Yes, the pre-nuptial agreement between both of you would be valid. The property relations of the spouses shall be governed by the Philippine laws, barring any contrary stipulations in the marriage settlement, regardless of the place of celebration of the marriage and the residence of the spouses. (Article 80 of the Family Code of the Philippines)

 

22.  I already owned a condo and a small farm when I met my husband. We did not execute a marriage settlement. What will happen to my properties?

Your condo and the farm would be deemed part of the community property in the absence of any marriage settlement executed prior to the marriage.

 

23.  I am a single father who has 3 children and owns a house and lot and a gas station. I recently married my new wife without executing a marriage settlement. What will happen to my properties?

The house and lot as well as the gas station would be excluded from the community property.

This is because, properties acquired before the marriage by either spouse who has legitimate descendants by a former marriage, and the fruits as well as the income, if any, of such properties, are deemed excluded from the community properties. (Article 92(3) of the Family Code of the Philippines)

 

24.  In our marriage settlement, my husband and I elected to have Conjugal Partnerships of Gains as the property regime that would govern our property relations in our marriage. Which properties would belong to me exclusively?

Each spouse would retain the ownership, possession, administration, and enjoyment of their exclusive properties. (Article 110 of the Family Code of the Philippines)

 

The following are the exclusive properties of each spouse:

  1. Those properties that each spouse had brought to the marriage as their own;
  2. Those properties which had been acquired by the spouses during the marriage by gratuitous title;
  3. Those properties which had been acquired by right of redemption, by barter or by exchange with property belonging to only one of the spouses; and
  4. Those properties which had been purchased with the exclusive money of the spouse.

(Article 109 of the Family Code of the Philippines)

 

25.  My husband and I did not execute a marriage settlement. After our wedding, my brother donated a condo to me alone. To whom would the condo belong?

The condo would belong to you alone. Property acquired during marriage by gratuitous title by either spouse is deemed executed from the community property. (Article 92 (1) of the Family Code of the Philippines)

 

26.  What about the debts of my husband incurred from gambling, if we have no marriage settlement?

You will not be liable for the debts of your husband incurred from gambling. Whatever your husband lost during your marriage in any game of chance or in betting, sweepstakes, or any other kind of gambling whether permitted or prohibited by law, shall be borne by him and shall not be charged to the properties owned in common. (Article 95 of the Family Code of the Philippines)

 

27.  I recently found out that my husband had taken out a huge loan. Will our conjugal properties be liable for his loan, despite the fact I had no knowledge of it nor was a party?

No. The conjugal property should not be liable to the personal loan taken out by your husband. The payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal properties partnership except insofar as they redounded to the benefit of the family. (Article 122 of the Family Code of the Philippines)

 

28.  What if the loan was used for the construction of our house?

If the loan was taken out for the construction of the family house, the conjugal properties may be liable, despite the fact that you had no knowledge of the loan. (Article 122 of the Family Code of the Philippines)

 

29.  What if my husband had been arrested and is ordered to pay a fine of Ten Thousand Pesos (PhP10,000.00), will the amount be taken out of our conjugal properties?

No. The amount for the fine would not be applied to the conjugal property.

The payment of personal debts contracted by the husband or the wife before or during the marriage shall not be charged to the conjugal properties partnerships except insofar as they redounded to the benefit of the family.

Neither shall the fines and pecuniary indemnities imposed upon them be charged to the partnership. (Article 122 of the Family Code of the Philippines)

 

30.  What happens if my husband had no other property or money apart from our conjugal property?

If your husband had no other property or money apart from the conjugal property, the debt or the fine may be applied to your conjugal property.

The payment of personal debts contracted by either spouse before the marriage, that of fines and indemnities imposed upon them, as well as the support of illegitimate children of either spouse, may be enforced against the partnership assets after the responsibilities enumerated in the preceding Article have been covered, if the spouse who is bound should have no exclusive property or if it should be insufficient; but at the time of the liquidation of the partnership, such spouse shall be charged for what has been paid for the purpose above-mentioned.

 

31.  My fiancé had recently been imprisoned and one of his penalties is civil interdiction. Can we still execute a marriage settlement?

Yes. However, the guardian, who would be appointed by the court, of the party suffering from civil interdiction shall be made a party to the written marriage settlement. (Article 79 of the Family Code of the Philippines)

 

32.  I had recently reconciled with my husband. However, we had been legally separated for about 10 years now. Are we allowed to revive the property regime that was subsisting during our marriage, despite the fact that we had been legally separated?

Yes. You can revive the property regime that was in existence during your marriage as your situation falls under one of the cases that a post-marriage modification may take place, specifically, “The spouses who were legally separated reconciled and agreed to revive their former property regime.”

 

33.  My partner and I had been living for some time without the benefit of marriage and we had acquired a house and lot for our family. What property regime would govern our properties?

When parties who are capacitated to contract marriage live together as man and wife without the benefit of marriage or under a void marriage, they are deemed as co-owners in the equal share of their wages, salaries and properties. (Article 147 of the Family Code of the Philippines)

 

34.  I had been living with my girlfriend for 5 years and I am the sole breadwinner. Does she have any share in my income despite the fact we are not married?

Yes. Under the law, the care and maintenance expressed by your girlfriend towards you, your family and your home are deemed as her contribution to the union between both of you.

In absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. (Article 147 of the Family Code of the Philippines)

 

35.  What if my partner was still married to her husband and we had acquired properties?

The properties that both of you had acquired would be deemed as under a co-ownership with you and your partner as the co-owners in proportion to your respective contributions. Absent proof of actual contributions, the contributions and corresponding shares shall be deemed equal. However, since your partner still has a subsisting marriage, his share in the co-ownership shall accrue to the absolute community or conjugal partnership existing in his marriage.

 

36.  My marriage to my ex-husband had been recently declared by the courts as void. What will happen to our properties acquired during the time of cohabitation?

According to Article 147 “When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife, without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership.

 

In absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly in the acquisition thereof in the former’s efforts consisted in the care and maintenance of the family and the household. xxx”

 

This particular kind of co-ownership applies when a man and a woman, suffering no legal impediment to marry each other, so exclusively live together as husband and wife under a void marriage or without the benefit of marriage. Under this property regime, property acquired by both spouses through their work and industry shall be governed by the rules on equal co-ownership. Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. A party who did not participate in the acquisition of the property shall be considered as having contributed thereto jointly if said party’s “efforts consisted in the care and maintenance of the family household.” Unlike the conjugal partnership of gains, the fruits of the couple’s separate property are not included in the co-ownership. (Valdez vs. RTC, Branch 102, Quezon City, G.R. No. 122749, 31 July 1996)

 

37.  What if my husband knew all along that our marriage was void, what will happen to our properties?

The share of the party who is in bad faith shall be forfeited in favor of the common children. However, if the union produced no children or if the common children or their descendants waive their right to their respective share, the properties shall belong to you. (Article 147 of the Family Code of the Philippines)