Conjugal Property in the Philippines
According to Article 1 of the Family Code of the Philippines, marriage is defined as a formal and legal union between a man and a woman, intended for lifelong partnership in building a family and sharing marital life. Additionally, all properties acquired during the marriage are considered conjugal property. Prior to marriage, it is advisable for both individuals to write and sign a prenuptial agreement. This document establishes their respective rights to property and support in the event of death or divorce, ensuring clarity and fairness in their legal arrangements.
What are the Types of Conjugal Property in the Philippines?
Before marriage, a prenuptial agreement is essential. This type of agreement outlines how the property is divided between the spouse. In addition, there are three (3) types of conjugal property that both individuals may choose, which are the following:
- Absolute Community of Property considers all properties acquired by both spouses before and during marriage as shared. However, there are exceptions to this rule. If a spouse owned property before the marriage, particularly if they have a child/children from a previous marriage, that property remains separate. Additionally, donations or inheritances received during the marriage are considered as separate property unless the donor or testator specifies otherwise.
- Conjugal Partnership of Gains is when a husband and wife marry, they retain ownership of the properties they individually owned before marriage. However, any income, profits, or gains earned from these separate properties during the marriage are considered shared assets.
- Complete Separation of Property means that each spouse has exclusive ownership over certain property or assets that are completely separate from those owned by the other spouse.
Furthermore, according to Article 75 of the Family Code, the future spouses may choose from the mentioned types of conjugal property regimes in their marriage settlements. However, in the absence of a marriage settlement or if the chosen regime is invalid, the system of absolute community of property will apply.
What are the Conjugal Assets in the Philippines?
In accordance with Article 116 of the Family Code of the Philippines, 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. In this regard, the following types of properties can be acquired by both spouses:
- Real Estate. Properties like houses, apartments, condominiums or lands acquired during marriage are considered joint assets. It reflects shared financial contributions and efforts in their acquisition, maintenance and improvement of the properties.
- Financial Accounts and Investments. Bank accounts, investments, and retirement funds accumulated during marriage are considered conjugal assets.
- Vehicles. Cars, motorcycles, and other motor vehicles purchased during marriage are part of the conjugal property. This acknowledges that both spouses have shared decisions and responsibilities for purchasing and using these vehicles throughout their marital relationship.
- Household Items. House furniture, appliances, electronics, and other items acquired during marriage may be considered conjugal assets.
- Business Interests. Ventures, startups or any type of business started during marriage are considered as conjugal property. Any interests earned in the business must be divided equally between spouses.
Moreover, the aforementioned types of properties are shared between marriages under an absolute community property regime in the absence of a prenuptial agreement, where all assets acquired by either spouse during marriage are jointly owned. However, the inherited property, donated property, and other properties acquired before the marriage are excluded from conjugal property.
What Happens to the Conjugal Property When a Marriage Ends?
In the Philippines, marriages under absolute community property involve division of conjugal properties upon legal separation or annulment. In legal separation, all conjugal properties are awarded to the innocent spouse. On this matter, the court will be the one who determines who is the innocent spouse. While in annulment cases, the conjugal properties will be equally divided between the spouses. However, the family home will be given to the spouse who resides with their child/children to ensure their welfare.
What Happens to the Conjugal Property After the Death of a Spouse?
Under Philippine law, if a person dies without a last will and testament (intestate), their surviving spouse and child/children, whether legitimate or illegitimate, will inherit their properties or assets. On the other hand, if there is a written will (testate), the distribution of the decedent’s properties will be distributed according to his/her instructions in the will.
How to Protect My Personal Assets When Married in the Philippines?
Managing conjugal properties and liabilities is crucial in marriages. Therefore, establishing boundaries between your personal assets and shared assets with your spouse is necessary. The following are some of the practical ways to protect your personal property when married in the Philippines:
- Prenuptial Agreement. This type of legal document is controversial for some couples. However, it is a practical and logical way to specify ownership boundaries. It outlines how shared properties and liabilities will be managed and divided in case of divorce, legal separation, annulment, or the death of a spouse. Additionally, it can protect your personal assets from any financial obligations.
- Discuss and Disclose Financial Situation. Openly discussing your financial situation with your spouse is key to preventing future financial conflicts. Disclosing both assets and debts helps both parties make informed decisions and plan effectively together.
- Separate Bank Accounts. Maintaining separate bank accounts allows each spouse to track their personal finances and liabilities independently. Moreover, if the married couple wishes to track and manage their shared expenses and savings goals then a joint bank account is necessary.
- Make Financial Decisions. In marriage, making financial decisions together strengthens marital unity, and ensures both parties understand and agree on their financial situation. Regular financial discussions enable both partners to carefully analyze their financial circumstances, reach agreements, and prevent misunderstandings.
- Consult with Legal Professionals. Seeking advice from legal professionals specializing in family law is crucial. They can provide guidance on setting boundaries with personal and conjugal properties, explain relevant laws, and help protect assets and mitigate financial obligations.
Need further information and assistance regarding Conjugal Property? Talk to our team at Duran & Duran-Schulze Law to know more about the requirements and process. Call us today at (+632) 8478 5826 or +63 917 194 0482, or send an email to info@duranschulze.com for more information.
