When you marry, part or all of your property becomes conjugal property. Part or all of your spouse’s property also becomes conjugal property. Conjugal property can be formed in the following ways:
- Conjugal partnership of gains
- Absolute Community
- Legal Separation
These different ways of forming conjugal property come into play in different ways. If a prenuptial agreement was formed, then one of these property regimes can be picked. If not, then a default property regime comes into play based on the year of marriage. Conjugal property has several effects. It affects the disposal or encumbrance of property as both spouses must now agree. It is also a concern between separating spouses. As you can see, conjugal property is a topic of intense continuing interest.
- What property regime applies to your marriage?
- What is Conjugal Partnership of Gains?
- What is Absolute Community of Property?
- What is Complete Separation of Properties?
- How do you avoid conjugal property?
- Is your inheritance part of conjugal property?
- What is the right of an illegitimate child to conjugal property?
- What happens to the conjugal property after the death of a spouse?
What property regime applies to your marriage?
If you have executed a valid agreement (or a pre-nuptial agreement) regarding your property before you married, then you are bound by this agreement. But what if you did not execute a pre-nuptial agreement before your marriage? In that case, you are governed by the default property regime in effect the year you married. Prior to August 3, 1988 – Conjugal Partnership of Gains On and After August 3, 1988 – Absolute Community of Property So, if you have no prenuptial agreement the date you were married determines your conjugal property regime.
What is Conjugal Partnership of Gains?
How does conjugal partnership of gains differ from absolute community of property? In absolute community, properties separately held before the marriage become part of the conjugal property. In conjugal partnership of gains, only income and properties accumulated during the marriage are considered conjugal property. Conjugal partnership of gains can be rather complicated when you actually sit down to calculate it.
For instance, what happens when a property is bought on installment before the marriage with both exclusive and joint funds? In this situation, it is part of conjugal property if ownership vests before the marriage. As you can see, things can quickly become complicated. These and several other rules from the Family Code [Art 116 to Art 120] dictate what conjugal property is in a marriage governed by conjugal partnership of gains.
Are there properties that are excluded from the Conjugal Partnership of Gains?
Yes. Excluded from the conjugal partnership of gains are exclusive properties prior to marriage, properties obtained by gratuitous title, or properties that are bought/redeemed/bartered with the exclusive money or property of the wife or husband. So, property owned by one spouse before marriage remain the property of that spouse even after marriage.
In addition, property that has been obtained by the exclusive money of one spouse is the property of that spouse. Lastly, property donated or inherited by a spouse during the marriage remains that spouse’s property. Everything that is exclusively acquired is separate from the conjugal partnership of gains.
What happens to the conjugal property of Conjugal Partnership of Gains when a marriage ends?
If the marriage ended through annulment, the net proceeds of the marriage are divided jointly. If ended through legal separation however, the net proceeds of the marriage are awarded to the innocent spouse. These are very different outcomes. In addition, computing this type of separation can easily become quite confusing. It often takes effort to assess what these net proceeds are and become complex when more assets are involved. Read more in: How is the marriage property divided in Legal Separation? This explains how properties under conjugal partnership of gains are separated in legal separation cases.
What is Absolute Community of Property?
This happens automatically when the marriage is celebrated. While you can execute a prenuptial agreement before the marriage, you cannot do anything about it afterwards – the law specifically forbids it. This is problematic, especially when a marriage starts to fail.
Are there properties that are excluded from the conjugal property of Absolute Community?
Yes, properties acquired by gratuitous title, personal properties and properties from a former marriage with children are excluded from conjugal property.
- Properties acquired during the marriage by gratuitous title. Gratuitous means “without pay”. In this case, these are properties inherited or donated during the marriage.
- Property for the personal use of each spouse such as clothing, excluding jewelry.
- Property acquired before that marriage by either spouse who has children by a former marriage. This is to protect the inheritance of the children of the previous marriage.
These are a very narrow classes of property. The vast majority of property in an absolute community marriage will usually fall under conjugal property.
What happens to property under Absolute Community when a marriage ends?
This is the question I get most often. When a marriage is annulled or legal separation undertaken, what happens to the property of the spouses? If the legal proceeding is annulment, then the following would happen:
- Net conjugal property is divided between the spouses
- The family home goes to the spouse with whom the children live
- Exclusive properties are returned to the spouses.
If the marriage ends through legal separation, then the innocent spouse is awarded all the conjugal properties. The court determines who the innocent spouse is – so you’d have to examine your case to determine who the innocent party would be. Read more in: How is the marriage property divided in Legal Separation? This explains how properties under absolute community are separated in legal separation cases.
What is Complete Separation of Properties?
Complete Separation of properties is exactly as stated. It means that there is no conjugal property. Instead whatever is exclusively owned is retained by the owner-spouse before and during the marriage. This pertains to any income or livelihood as well as to property.
How do you avoid conjugal property?
- Absolute community
- Conjugal partnership of gains
- Complete separation of property
Additionally, the law provides a vague 4th option of “any other regime” — but only so long as the regime opted for is a valid one. A valid regime is a regime that doesn’t break Philippine laws, which means that it’s wise to get expert advice to draft it. A side note: These property regimes may not apply in certain instances – for instance, when there are 2 foreign spouses or when a contract is executed regarding property outside the Philippines. [Family Code, Art 80] To choose your property regime, you must execute what’s called a marriage settlement or a pre-nuptial agreement. The prenuptial agreement or “pre-nup” is a valid agreement executed by the future spouses before marriage. It is signed by both parties and notarized. It can then be enforced against 3rd parties in the local civil registry or in the registries of the properties concerned.
Things are straightforward when the marriage is between 2 Filipinos and concerns only Philippine property – but what happens when there is a foreign element? Then things get a little tricky. In cases where a foreigner is married to a Filipino or a there is foreign property, a pre-nup has to decide how to address inevitable conflicts in foreign law. It may be possible to exclude these. However, you should really consult with legal counsel for these cases. In addition, you might want to consult counsel when you want to create a special pre-nup due to particular family situations. This might be when you have an interest in a family corporation and are executing the pre-nup to protect the company. Or, it may occur for properties you want to hold personally for sentimental or other reasons.
Is your inheritance part of conjugal property?
In absolute community, conjugal partnership of gains and complete separation of property, properties inherited during the marriage are excluded from conjugal property. However, inherited property forms part of conjugal property if you inherited prior to marriage and the estate was already settled. There are some ways to protect your property in event of a separation. These are admittedly a bit difficult so its really best to try to avoid the issue altogether by simply having a prenuptial agreement in place.
What is the right of an illegitimate child to conjugal property?
If absolute community is the property regime, half of the total property is the parent’s portion. Some exceptions may apply such as when a pre-nup is in place, when there is exclusive property, or when other provisions have been made. If conjugal partnership of gains is involved, then the parent’s share is half of the total income and assets generated during the marriage. This can be complicated to compute depending on how many assets there are and how long the marriage was. In complete separation of property, there is no conjugal property. Each spouse owns his own share.
From his parent’s share, an illegitimate child usually receives ½ the share of a legitimate child.