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Conjugal Property vs. Absolute Community of Property

 

Conjugal property is property that belongs to both spouses.

 

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

Other

 

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.

 


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Conjugal Partnership of Gains

 

In a Conjugal partnership of gains, the conjugal property is the income or property generated by both spouses during the marriage. Only properties and income gained during the marriage form the conjugal property.  Conjugal partnership of gains can be rather complicated when you actually sit down to calculate it.

 

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.

 

If the marriage ends in annulment, the net proceeds of the marriage are divided jointly. If ends 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. 

 

Absolute Community of Property

 

Absolute community of property means that all property owned by either spouse becomes conjugal property upon marriage.

 

While you can execute a prenuptial agreement before the marriage, you cannot do anything about it afterwards – the law specifically forbids it.

 

Excluded from the Absolute community of property are:

 

  • 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.

 

If the marriage ends in annulment:

 

  • 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 in legal separation:

 

  • The innocent spouse is awarded all the conjugal properties.

  • The court determines who the innocent spouse is.

 

Complete Separation of Properties

 

Properties of husband and wife are completely separate from each other. 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.

 

What property regime applies to my marriage?

 

You can choose your conjugal property regime – but only before you are married.

 

Before marriage, Philippine law allows the future spouses to determine the property regime they want to govern their marriage.

 

They may decide on any one of the 3 regimes available:

 

          1. Absolute community

          2. Conjugal partnership of gains

          3. 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.

 

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.

 

Marriage to a Foreigner

 

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.

 

Conclusion

 

Absolute Community of Property is a form of Conjugal Property.  We are often confused with conjugal property with conjugal partnership of gains.

 

The important date to keep in mind is August 3, 1988.  Couple married prior to August 3, 1988 automatically defaults to conjugal property of gains, while those couple married on or after August 3, 1988 automatically follow absolute community property, unless a pre-nuptial agreement has been executed.

 

In case of separation, the settlement will be primarily affected by the type of separation proceedings taken.

 

Reference

https://lawyerphilippines.org/

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