Almost everyone dreams of having a magical wedding followed by 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 the Family Code. A prenup has long been considered taboo but a deeper understanding of one of the consequences of marriage—the property relations between husband and wife, might make you consider having one.
Under the Family Code, 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 things 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 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 property should always check whether the seller is married and require the spouse of said seller to sign the deed of sale to show her consent. If it is later disputed that a spouse gave his or her consent, the sale may be diminished or cancelled completely.
If the above arrangement does not seem to work for you, then you may want to consider a prenup—spouses can agree to other forms of property structure as they wish. The prenup is signed by the spouses before the marriage is registered.
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.
Conjugal partnership of gains
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.
The Supreme Court previously decided 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 it was purchased prior to the marriage and the spouses signed a prenup before their marriage.
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 of her husband. The wife, in said case, was considered as a stranger to the court action against her husband.
Complete separation of property
On the other hand, in another fairly common regime 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 cases 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 before marriage.
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Camille Angelica A. Mendoza is an associate of Villaraza & Angangco.
This article is intended for informational purposes only and should not be construed as legal advice.
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of Villaraza & Angangco. For comments or inquiries, please email [email protected].