Marriage Settlement (Prenuptial Agreement) and Introduction to Property Relations in Marriage

What are the differences between absolute community, conjugal partnership of gains, and complete separation of property? Somebody asked this question some time ago, but we were not able to immediately post a discussion on this matter due to heavy law office work. This is also the same reason why we are constrained to break down the discussion into six parts, as follows: (1) Prenuptial agreements and introduction to property relations between husband and wife; (2) The system of absolute community; (3) Conjugal partnership of gains; (4) Complete separation of property; (5) Donations by reason of marriage; and (6) Comparison of the various types of property relations between spouses.

There are related topics alredy discussed, such as the property relations between a man and a woman living together without being married. For this part (Part I), let’s talk about prenuptial agreements and a brief introduction on the property relations between husband and wife.

Can the future spouses agree on the property relations during marriage?

Yes. A man and a woman who are planning to get married may enter into a contract defining or providing for their property relations during marriage. This is called a prenuptial agreement” or “marriage settlement.”

In the absense of a marriage settlement or prenuptial agreement, what governs the property relations between the spouses?

In the absence of a marriage settlement (or when the regime agreed upon is void), the property relations between the spouses shall be governed by the system of absolute community of property. In other words, the absolute community of property is the default system under the Family Code. Prior to the effectivity of the Family Code (3 August 1988), the default system is the conjugal partnership of gains, oftentimes referred to as CPG by law students and lawyers.

When should a marriage settlement be executed?

The marriage settlement or prenuptial agreement, or any modication thereof, must be made BEFORE the celebration of the marriage. Changes after the marriage ceremony, except in cases of judicial separation of property during the marriage, are not valid. This means that the spouses could not simply agree later on to change their property relations, except upon a petition filed in court.

What is the form of the marriage settlement?

The marriage settlement and any modification thereof shall be in writing, signed by the parties and executed before the celebration of the marriage. Also, before the marriage settlement may prejudice third persons, like creditors, the marriage settlement must be registered in the local civil registry where the marriage contract is recorded, as well as in the proper registries of properties.

What about minors who enter into marriage or persons sentenced with civil interdiction?

The law generally speaks of “minors” as those who are under 18 years old. For purposes of the provisions on marriage settlement, however, a “minor” refers to those at least 18 years old but below 21, who needs parental consent to get married. Those who are designated by law to give consent, primarily the parents, must also sign the marriage settlement in order for it to be valid.

On the other hand, for the validity of marriage settlements executed by persons on whom the sentense of civil interdiction has been pronounced or who is subject to any other disability, the guardian appointed by a competent court must be made a party.

What happens if the marriage ceremony is called off?

A marriage settlement, including any donations by reason of marriage (donations propter nuptias, which will be discussed later in Part 5), is rendered void if the marriage does not take place. An exception to this rule are those stipulations that do not depend on the celebration of the marriages, such as the recognition of an illegitimate child.

What are the property relations that the future spouses may provide in a marriage settlement?

The future spouses may agree to the following: (1) System of absolute community; (2) Conjugal partnership of gains; (3) Complete separation of property; or (4) any other regime or system, so long as it is not contrary to law, morals, good customs, public order or public policy. There’s no sense entering into a marriage settlement when the future spouses prefer the system of absolute community, as it is the default system in the absence of a valid agreement between the spouses. The spouses may, however, want to provide for certain modifications to any of the regimes or system stated above.

What law governs the property relations of the spouses?

In the absence of a contrary stipulation in a marriage settlement, the property relations of the spouses shall be governed by Philippine laws, regardless of the place of the celebration of the marriage and their residence. This rule shall not apply: (1) Where both spouses are aliens; (2) With respect to the extrinsic validity of contracts affecting property not situated in the Philippines and executed in the country where the property is located; and (3) With respect to the extrinsic validity of contracts entered into in the Philippines but affecting property situated in a foreign country whose laws require different formalities for its extrinsic validity.