Friday, April 29, 2016

The Marriage Series, Part 4: What the Absolute Community is Obligated to Pay For

According to Article 94 of the Family Code, during the couple’s marriage, the absolute community of property will answer for the following: 

(1) The support of the spouses and their common children; 

(2) All debts and obligations contracted during the marriage by the designated administrator spouse for the benefit of the community, or by both spouses, or by one spouse with the consent of the other; 

(3) Debts and obligations contracted by either spouse without the consent of the other to the extent that the family may have been benefited; 

(4) All taxes, liens, charges and expenses, including major or minor repairs, upon the community property; 

(5) All taxes and expenses for mere preservation made during marriage upon the separate property of either spouse used by the family; 

(6) Expenses to enable either spouse to commence or complete a professional or vocational course, or other activity for self-improvement; 

(7) Antenuptial debts of either spouse insofar as they have redounded to the benefit of the family, or in other words, debts incurred by either spouse before their marriage, which have benefited the family; 

(8) The value of what is donated or promised by both spouses in favor of their common legitimate children for the exclusive purpose of commencing or completing a professional or vocational course or other activity for self-improvement; 

(9) Antenuptial debts of either spouse other than those falling under paragraph (7), the support the support of illegitimate children of either spouse, and liabilities incurred by either spouse by reason of a crime or quasi-delict, in case of absence or insufficiency of the exclusive property  of the debtor-spouse, the payment of which shall be considered as advances to be deducted from the share of the debtor-spouse upon liquidation of the community; and 

(10) Expenses of litigation between the spouses unless the suit is found to be groundless.

The separate properties of each spouse will have to shoulder any unpaid balance if the community property is not enough to cover the above-mentioned liabilities, with the exception of the antenuptial debts of each spouse that did not benefit the family.

If the community property is insufficient to cover the foregoing liabilities, except those falling under paragraph 9, the spouses shall be solidarily liable for the unpaid balance with their separate properties.

Thursday, April 28, 2016

The Marriage Series, Part 3: Absolute Community of Property

What is the regime of absolute community? How are the properties of the husband and the wife affected under this regime? Under the absolute community of property regime, all property owned by the spouses at the time of the celebration of the marriage, or acquired thereafter, will form part of the community property (Family Code of the Philippines, Article 91). This means that everything the couple owns at the time they get married, and everything that they will own after their marriage, will belong to both of them. 

Is there any property that will be excluded from the community property? Yes. Under the Family Code, the following properties are excluded form the community property:

 (1) Property acquired during the marriage by gratuitous title by either spouse, and the fruits as well as the income thereof, if any, unless it is expressly provided by the donor, testator or grantor that they will form part of the community property; 

(2) Property for personal and exclusive use of either spouse. However, jewelry shall form part of the community property; and 

(3) Property acquired before the marriage by either spouse who has legitimate descendants by a former marriage, and the fruits as well as the income, if any, of such property. 

In other words, property that a spouse receives by virtue of donation, succession, or any other form of gratuitous conveyance does not form part of the community property, and will remain the separate property of the spouse, unless the person who made the gratuitous conveyance expressly stated that the conveyance was for  both spouses, in which case, it will form part of the community property. Property that only one spouse can personally and exclusively use is also considered separate property. An example of such property would be clothing.

If one of the spouses is a widow or a widower, or was previously married and such marriage has been legally annulled, and has a child or children from the previous marriage, the property which that spouse acquired before the subsequent marriage, as well as any income that may be derived from the property, will form part of his or her separate property.

Thursday, April 21, 2016

The Marriage Series, Part 2: Property Relations

What is property relations? Property relations is how a husband and a wife relate to each other with regard to their properties, which include money, jewelry and land among others.

According to the Family Code of the Philippines, the property relations between husband and wife will be governed in the following order: 

(1) By marriage settlements executed before the marriage; 

(2) By the provisions of the New Civil Code as amended by the Family Code; and 

(3) By the local customs.

Couples who are about to get married are encouraged to execute a marriage settlement. What is a marriage settlement? A marriage settlement is an agreement between the future husband and the future wife, which establishes their property relations during their marriage. 

The Family Code of the Philippines provides for four economic regimes which the couple may choose to govern their future marriage. These regimes are: 

(1) the regime of absolute community; 

(2) the conjugal partnership of gains; 

(3) complete separation of property; and 

(4) any other regime. 

What if the couple chooses not to execute a marriage settlement? What regime will govern? According to the Family Code, in the absence of marriage settlements, or when the regime agreed upon is void, the system of absolute community of property as established in the Family Code will govern.

If you want a marriage settlement made or have questions regarding marriage settlements, please contact us at (032)268-0537 to schedule an appointment. Thank you!

Wednesday, April 20, 2016

The Marriage Series

Getting married? With June a little over a month away, many couples are now well into their wedding preparations. Unfortunately, however, a significant percentage of those couples are clueless about the realities they have to face after the wedding ceremony.  We have decided to publish a series to help couples prepare for their future married life.

The Marriage Series, Part 1 : Talking About Future Property Relations

There are some couples who are planning to get married, yet probably haven’t discussed their finances with their significant others. Have they incurred any debt? Who will pay for the debt once they are married? Who will pay for the utility bills, the rent or the mortgage, the future children’s tuition fees? Will the future stay-at-home wife get a monthly allowance? Will the future spouse with the less stable source of income be required to share in the household expenses? These are just few of the questions that many newly-married couples ask themselves, and which couples who plan to get married should ask themselves and each other before they get married.  We highly encourage couples who want to get married to take the time and talk about their finances and their properties, and how it would affect their property relations during their marriage, in order to prevent problems later on in their marriage.

If you need help planning out your property relations, please contact us at (032)268-0537 to schedule an appointment.