PRENUPTIAL AGREEMENTS IN THE PHILIPPINES

Philipinnes

Although divorce is not allowed under Philippine law, prenuptial agreements are permissible to “fix the property relations during the marriage within the limits provided by this Code.”

Article 1 of the Family Code of the Philippines provides that, “Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose nature, consequences, and incidents are governed by law and not subject to stipulation, except that marriage settlements may fix the property relations during the marriage within the limits provided by this Code.” The Family Code, otherwise known as Executive Order No. 209, took effect in 1988.

The Family Code provides that a regime of absolute community of property applies automatically upon marriage. However, that regime is subordinate to the terms of a valid prenuptial agreement.

Thus the Code specifies that “Unless otherwise provided in this Chapter or in the marriage settlements, 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.” Article 91. Certain specified items are excluded from the default regime of community property but the burden is on the party asserting that an item is excluded to prove that such is the case. (Articles 92 and 93).

A prenuptial agreement may contain such terms as the parties wish to govern their affairs. However, the Family Code provides for certain specific regimes that the parties may choose to adopt, these being:

The regime of Conjugal Partnership of Gains, whereby the husband and wife place in a common fund the proceeds, products, fruits and income from their separate properties and those acquired by either or both spouses through their efforts or by chance, and, upon dissolution of the marriage or of the partnership, the net gains or benefits obtained by either or both spouses shall be divided equally between them, unless otherwise agreed in the marriage settlements; and

The regime of Separation of Property, whereby each spouse shall own, dispose of, possess, administer and enjoy his or her own separate estate, without need of the consent of the other, and which may refer to present or future property or both and which may be total or partial.

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 Registry of Property for the Protection of Creditors and in the local civil registry.

A prenuptial agreement may stipulate as to what law will determine the parties' property relations. Absent such a choice of law clause the law of the Philippines will govern such matters if one spouse is a Filipino citizen. However, the laws of the Philippines will not apply to property located outside the Philippines. Article 16 of the Civil Code of the Philippines provides that, "Real property as well as personal property is subject to the law of the country where it is situated."




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