The Prenup: An Overview of the Property Regimes Under Philippine Laws

Mark Benjamin C. Yam

Almost everyone dreams of having a magical wedding followed by enjoying a stable and happy family life. But when dreams do not come true or they later turn into an awful nightmare, the couple, or at least one of them, ends up regretting not preparing one thing in advance: the prenup.

A prenup, as it is commonly termed, refers to a “prenuptial agreement” or an “antenuptial agreement” under Executive Order 209 or the “Family Code”. A prenup has long been considered taboo for various reasons and an affront to conservative circles. However, a deeper understanding of one of the consequences of marriage – the property relations between husband and wife, might make you consider having one and discussing the same with your spouse to be.

Under the Family Code, the general rule is that if the spouses did not sign a prenup prior to their marriage, all property owned by the spouses at the time of marriage or acquired after would be shared as what is known as an “absolute community of property”. Hence the saying “What’s yours is mine, and what’s mine is yours”. Only three categories of properties are excluded or exempted from the absolute community of property:

  1. Gifts acquired during the marriage (i.e. if either spouse receives a hefty check from a distant relative during the marriage, the amount would be his or hers exclusively);
  2. Property for personal and exclusive use of either spouse, except jewelry (that expensive attaché case or designer bag would belong to the groom or bride as the case may be); and
  3. Property acquired before the marriage by either spouse who has legitimate descendants (i.e. children or grandchildren) from a former marriage, and the fruits and income of such property.

While under an absolute community of property either spouse may manage and enjoy their shared properties, neither spouse may sell or dispose of any of the shared properties without the consent of the other spouse. It is for this reason that a buyer of a property should always verify the marriage status of the seller and require the spouse of said seller to sign the deed of sale to show his or her express consent. Otherwise, the sale may be diminished or cancelled completely if it is later disputed that the spouse gave his or her consent.

If the above arrangement does not seem to work for you, then you may want to consider entering into a prenup. Through a prenup, the spouses can agree to other forms of property structure as they wish different from the absolute community of property. The prenup is signed by the spouses before the marriage to show their agreement and is completed and registered with the applicable local registries.

Two common property structures usually agreed upon between spouses in a prenup are what are known as: (1) the conjugal partnership of gains and (2) the complete separation of property.

Under a conjugal partnership of gains, the husband and wife place in a common fund the earnings of their separately owned properties, and properties they acquired after their marriage. The spouses may even go as far as defining specifically which separate properties are to be included in the list. Unlike in an absolute community of property, all properties owned by each spouse prior to their marriage and not included in the conjugal list remain to be owned by them separately.

Interesting to note, it was previously decided by the Supreme Court that while a property is registered under the name of both spouses, the property remains to be owned by the spouse who used his own funds to purchase the property if the property was purchased prior to the celebration of the marriage despite the execution of the prenup before their marriage. The important point to take note of is the marriage status of the buyer on the date the property was purchased. 1

It was also previously decided by the Supreme Court that since spouses retain ownership over their own exclusive properties under a conjugal partnership of gains, the exclusive property of a wife cannot be used to pay for the obligations/liabilities of her husband. The wife, in said case, was considered as a stranger to the court action against her husband. 2

On the other hand, in another fairly common structure known as a complete separation of property, each spouse has exclusive ownership over his or her separate property. Therefore, each spouse has the right to use, manage, sell and enjoy his or her own separate estate/properties, without need of the consent of the other spouse. In signing a prenup on complete separation of property, the spouses are free to agree as to the extent of their separation of property. If they agree on only a partial separation of property, such as for example in case where they decide that the family home will not be separated, the property not agreed upon as separate will be treated as part of an absolute community of property.

A lot of people still consider the suggestion of a prenup as an expectation that the marriage will fall apart. On the other side of the coin, it is also argued that your property was hard earned by you or your family, so ultimately you should have a say on how it should be treated. While entering a prenup remains a sensitive topic for many couples, it is one that must be taken into consideration and discussed accordingly with your future spouse before marriage to avoid any difficulties in the future.