Money Matters

Ask the Pros: How Does Marriage Affect Property Ownership?

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What’s mine is yours, and what’s yours is mine – does this adage apply to the properties owned by married couples? There’s a common misconception that couples instantly become co-owners of properties when they exchange I dos. In general, marriage affects property ownership during the marriage, if there’s a legal separation or annulment of marriage, and eventually, in succession or whether the property will be included in the estate of the deceased spouse.

To help you understand the laws that govern marriage and property ownership, Real Living talked to Atty. Mhealler Ycong, CPA, a practicing lawyer for around eight years now. Below, Atty. Mhealler highlights two property regimes in the Philippines and the date married couples need to remember.

ALSO READ: Ask the Pros: Can Live-In Partners Co-Own Properties?

How does marriage affect property ownership if I got married on or after August 3, 1988?


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Spouses married on or any time after August 3, 1988 (the effectivity of the Family Code) are governed by the Absolute Community of Property. Under this regime, all properties, whether acquired before or during the marriage, are CONSIDERED CONJUGAL PROPERTY.

This means that any property purchased or built by one spouse before he or she got married will become the property of both husband and wife upon marriage. If there is legal separation or annulment, these conjugal properties will be divided 50-50 or in equal parts among them.

There are exclusions to this, though. Properties received through donation or inheritance during the marriage, unless expressly provided to form part of the conjugal property, properties for the personal or exclusive use of either spouse, and properties 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, are all considered the exclusive property of one spouse.

READ: Here's Why Settling Estate Taxes on Time Can Save You Money

If one of them dies, 50 percent of the conjugal properties and 100 percent of the exclusive properties (excluded from conjugal properties) of the deceased spouse will be included in his or her estate.


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How does marriage affect property ownership if I got married before August 3, 1988?

Spouses who got married before August 3, 1988, are governed by the Conjugal Partnership of Gains. Under this regime, properties owned or built before marriage are CONSIDERED SEPARATE PROPERTIES OF EACH SPOUSE.

Only properties owned or built during the marriage are considered conjugal properties and owned equally by the husband and wife. The proceeds, products, fruits, and income from their separate properties become conjugal as well. If there is legal separation or annulment, these conjugal properties are divided into equal parts among them, plus, the exclusive separate properties of each spouse are retained by the owner-spouse.

READ: Who Will Pay the Estate Taxes When the Property Owner Dies?

Meanwhile, exclusions to the conjugal property include properties owned before marriage, those received through donation or inheritance during the marriage, properties acquired by the right of redemption, by barter or by exchange with property belonging to only one of the spouses, and lastly, properties purchased with exclusive money of the husband or the wife.

If one of them dies, 50 percent of the conjugal properties and 100 percent of the exclusive properties (excluded from conjugal properties) of the deceased spouse will be included in his or her estate.


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Can couples agree on property ownership through a pre-nuptial agreement?

A pre-nuptial agreement pertains to a marriage settlement agreed upon before marriage by the couples. In the said agreement, both parties can specify a particular property regime other than that stipulated by law and they may even agree on a complete separation of properties.

READ: How Do You Divide Conjugal Property When You Get Annulled?

Without a pre-nuptial agreement, the property regime of separation of properties may only be done upon judicial order either voluntarily or for sufficient cause.

Are you getting married soon? What do you think of these property regimes? Remember that the information shared in the article is for general knowledge only. For specific legal advice, please get in touch with a lawyer.

 

Special thanks to Attorneys Nikki Cortina, Steffi Banaag, Mhealler Ycong, Aila May Alvarez, and Christopher Linag.

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