Back in the old days, prenuptial agreements were almost unheard of in the Philippines. Perhaps, our aversion to this concept stems from our culture of modesty and false pride in that we tend to bloat our sense of self, yet, at the same time, we also take pride in being generous and hospitable to a fault. However, we are quick to realize now that even matters of the heart hold value—monetary value.
In the Philippines, being a Catholic country and, in fact, the only remaining country (outside the Vatican) that does not allow divorce, marriage is placed on a pedestal that to “taint” it with practicality and to an extent, deal with marriage as if a merger of assets of sorts, trumps the Filipino’s grandiose and, at times, unreasonable perceptions of love and of what it means to become partners for life. Somehow, for some people, the idea of having to execute a “prenup”, as it is colloquially known, is an insult and a show of distrust by a loved one.
In recent years, however, we have been audience to a number of painful, meant-for-the-circus and pocket-draining divorces between and among celebrities and private individuals, mostly in the United States, which underscores the importance and the real social value of a prenuptial agreement. As a consequence, we have become more open to the discussion of the subject of prenup, and have in fact adapted the trend quite smoothly.
From the very word itself, a prenup must be executed prior to the marriage. No prenup may be entered into by the parties after the marriage and, thus, any and all modifications in the settlement of the property relations of the spouses may only be made with court approval. A prenuptial agreement is basically a contract between the future spouses, which governs and determines the rights and obligations of the parties relative to all properties, including future properties to be acquired, brought by each party into the marriage. Since a prenup is a contract, it follows that the requisites for the validity of contracts should also obtain. Prenuptial agreements must be entered into voluntarily. They should be in writing. They can be set aside for lack of consent, fraud, coercion, mistake, undue influence or bad faith. In order to be effective against third persons, they must be notarized and recorded in the proper registries of properties for the protection of creditors and in the local civil registry, where the marriage is contracted. The future spouses may choose that their marriage be governed by the regime of absolute community of property, conjugal partnership of gains, complete separation of property, or any other regime, as long as agreed to and validly entered into by them.
Under the Family Code of the Philippines (which became effective in August 1988), unless a valid prenuptial agreement has been executed by the parties, the parties shall be governed by the regime of absolute community of property. The community property shall consist of all the property owned by the spouses at the time of the celebration of the marriage or acquired thereafter, with a few exceptions, such as property acquired during the marriage by gratuitous title (i.e., inheritance), property for exclusive and personal use of the party, and property acquired before the marriage by either spouse who has legitimate descendants by a former marriage, including the fruits, as well as the income, if any, of such property.
Prior to the Family Code, the Old Civil Code provided that in the absence of any prenuptial agreement, the regime of property is the conjugal system of gains—the husband and wife place in a common fund only the proceeds, products and income from their separate properties and those acquired by either or both spouses through their efforts or by chance. The spouses retain the ownership, possession, administration and enjoyment of their exclusive properties (paraphernal properties for the wife/husband’s capital).
The prenuptial agreement, to avoid any confusion or legal battle in the future over inheritance, must explicitly state what regime of property the future spouses want. It must be understood that in a system of Absolute Community, all the properties owned by the spouses (past, present and future) belong to Absolute Community and is shared equally by husband and wife (even if it is inherited property of only one spouse). Under Article 96 of the Family Code, the administration and enjoyment of the Absolute Community shall belong to both spouses jointly, but in case of disagreement the husband’s decision shall prevail. If the wife objects to the husband’s decision, she has to go to court. The perceived unfairness of this regime makes it an undesirable choice of property regime—hence, future couples opt to choose in their prenuptial agreement the conjugal partnership property. The spouses retain the ownership, possession, administration and enjoyment of their exclusive properties, unlike in the Absolute Community of Property Regime where both spouses jointly administer even the exclusive property of the other spouse. The Family Code (Article 110) enumerates what is deemed exclusive property:
1) That which is brought to the marriage as his or her own;
2) That which each acquires during the marriage by gratuitous title;
3) That which is acquired by right of redemption, by barter or by exchange with property belonging to only one of the spouse; and
4) That which is purchased with exclusive money of the wife or of the husband.
Under Article 110 of the Family Code, property donated or left by will to the spouses, jointly and with designation of determinate shares, shall pertain to the done-spouse as his or her own exclusive property. In the absence of designation, the donated property shall be owned and shared alike. Thus, if for example the parents give property to only their daughter (whether before or during the marriage), that donated property belongs only to the daughter (not her husband)—but the fruits of the donated property (e.g., rental income) belong to both the wife and husband. Property bought on installments paid partly from exclusive funds of either or both spouses belongs to the buyer or buyers if full ownership was vested before the marriage and to the conjugal partnership if such ownership was vested during the marriage. In either case, any amount advanced by the partnership or by either or both spouses shall be reimbursed by the owner or owners upon liquidation of the partnership (Article 118, Family Code).
Because of the differences between the Absolute Community of Property and Conjugal System of Property Regimes, it is important that future couples decide before marriage on what property regime they desire. A prenuptial agreement is always desired to preempt quarrels over properties or inheritance. A minor who is old enough to get married (18 and above) can enter into a prenuptial agreement, but this is valid only if the parents/guardians consent and are made parties to the prenuptial agreement. Once a prenuptial agreement is executed, it cannot be modified except if the modification is done prior to the marriage. Postmarriage modification of such settlement can take place only where: (a) the absolute community or conjugal partnership was dissolved and liquidated upon a decree of legal separation; (b) the spouses who were legally separated reconciled and agreed to revive their former property regime; (c) judicial separation of property had been had on the ground that a spouse abandons the other without just cause or fails to comply with his obligations to the family; (d) there was judicial separation of property under Article 135; (e) the spouses jointly filed a petition for the voluntary dissolution of their absolute community or conjugal partnership of gains.
Parents who want to make sure that their sons or daughters are marrying for love (and not because the other party is looking at the future spouse’s inheritance or wealth), have resorted to prenuptial agreements. To some, this takes the romance out of marriage and makes it appear “transactional”.
While the relational impact of the proposal and execution of a prenup is arguable, no one can deny the practical use and economic security it provides to the spouses involved. As they say, marriages are made in heaven, but bitter separations and relationships gone sour happen here on Earth.
Prenuptial agreements aside, it is a good time (this month of Valentines) to be reminded that marriage is a special contract of permanent union between a man and a woman with the basic objective of establishing a conjugal and family life (Article 1, Family Code). The unique element of permanency of union signifies a continuing, developing and lifelong relationship between the parties. Toward this end, the parties must fully understand and accept the implications and consequences of being permanently united in marriage. And the maintenance of this relationship demands from the parties, among others, determination to succeed in their marriage. Indeed, marriage is not about money or properties, it is about heartfelt understanding, acceptance, cooperation and support for each other—fortunately or unfortunately “until death do we part!”