Conjugal Property

-when property is acquire before the husband got married, the property shall be exclusively his;
-when property is acquired before the wife got married, the property will be exclusively hers;
-marriage joins exclusive properties as part of one estate within the conjugal property and the fruits of those properties shall
be shared between the husband and wife for the duration of their marriage;
-in the event the husband and wife file for divorce, annulment or legal separation, the husband's exclusive property, acquired
before the marriage and all its fruits shall not be included in the conjugal property and will be exclusively owned by him; the
same theory applies to the exclusive property of the wife;
-when the spouses filed for separation of properties in court, the properties that the husband and the wife acquired during
their marriage will be considered part of their conjugal property and this will be split in half between the wife and the
husband.

Absolute Community Of Property

-when all properties are acquired by the spouses before their marriage and all properties acquired during their marriage, it
will be considered as part of one whole estate of the absolute community of property, which is owned by both parties;
-when all properties are inherited, donated or given gratuitously to either of the spouse before their marriage shall be
considered as part of the absolute community of property upon marriage, and shall be owned by both parties;
-in the event of divorce, annulment or legal separation, the regime of absolute community of property shall not be affected
and will remain owned by both spouses, unless the spouses have filed for judicial separate of properties;
-in case the spouses filed Judicial Separation of Properties, the properties within the Absolute Community of Properties shall
be split between the husband and the wife.

The absolute community of property between spouses starts from the time the marriage is celebrated. It cannot be modified
during the marriage; hence, any agreement must be done prior to contracting the marriage (Article 88, Family Code). Under
the regime, all properties owned by the spouses before the marriage and those that they acquire during the marriage shall
form part of the absolute community and is shared equally by husband and wife (Article 91, Family Code).

As a general rule, any property acquired during the marriage is presumed to belong to the community, unless it is shown that
it is excluded in the following:

•Property acquired during the marriage by gratuitous title such as by way of donation or inheritance unless the donor testator
or grantor provides that they shall form part of the community property. So, if one of the spouses inherited a property during
the marriage, his/her future spouse will not co-own that property as well as the fruits and income therefrom.

•Property for personal and exclusive use of either spouse. Jewelry is not considered excluded under this; hence, it is part of
the community property.

•Property acquired before the marriage if the acquiring party has legitimate descendants (children, grandchildren) by a
former marriage. The fruits and income of such property are also excluded.

Whatever may be lost during the marriage in any game of chance, betting, sweepstakes, or any other kind of gambling,
whether permitted or prohibited by law, shall be borne by the loser. It shall not be charged to the community but any
winnings therefrom shall form part of the community property (Article 95, Family Code).

There is a need for the absolute community to be expansive because it is answerable for the needs of the family, including
the support of the spouses, their common children, and legitimate children of either spouse. All debts and obligations
contracted during the marriage by the designated administrator-spouse are sourced from the community property. Even
debts obtained without the consent of the other may be enforced on the community property to the extent that the family may
have been benefited.

Other expenses chargeable to the community property are:

•Taxes and expenses for mere preservation made during marriage upon the separate property of either spouse used by the
family;

•Expenses to enable either spouse to commence or complete a professional or vocational course, or other activity for self-
improvement, and even debts incurred by either spouse prior to marriage (for as long as it benefited the family), and
expenses of litigation between the spouses, may all be sourced from the community property;

•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;

•Debts incurred prior to the marriage by either spouse that did not benefit the family;

•The support of illegitimate children of either spouse;

•Liabilities incurred by either spouse by reason of a crime or a quasi-delict, in case of absence or insufficiency of the
exclusive property of the debtor-spouse. However, this is considered as advances to be deducted from the share of the
debtor-spouse upon liquidation of the community; and,

•Expenses of litigation between the spouses unless the suit is found to be groundless (Article 94, Family Code).

In a Conjugal Partnership of Gains, the spouses place in a common fund place the fruits of their separate
property, and the income from their work or industry and the same is to be divided between them equally,
generally, upon the dissolution of the marriage or the partnership. The spouses however retain ownership
and administration of their separate properties. They also retain possession and enjoyment of the same. But
either of them may transfer the administration to each other by means of a public instrument which must be
recorded in the registry of property of the place where the property is located.

While the law guarantees that the net gains or benefits of the conjugal partnership shall be divided between
the spouses at the liquidation of the conjugal partnership, such guarantee, however, does not mean that
they would always get their shares. Such right over the net gains is merely inchoate because it may be
found out after the liquidation that there is no conjugal partnership of gains to be divided.

Properties Covered by the Conjugal Partnership

The Conjugal Partnership covers the following properties:

a. The proceeds, products, fruits and income from the separate properties of the spouses.
b. Those acquired by either or both of the spouses:
1. by their efforts, or
2. by chance.
Liability of Spouses

Spouses are liable pro-rata in the satisfaction of the partnership’s indebtedness. Nonetheless, if the
conjugal partnership is insufficient to cover the liabilities, the spouses shall be solidarily liable for the
unpaid balance with their separate properties.

Duration of Conjugal Partnership

The conjugal partnership of gains is supposed to last until:

1. the dissolution of the marriage, like death or annulment.

2. the dissolution of the partnership, like legal separation or judicial separation of property.
What forms part of the exclusive property of the spouses in a Conjugal Partnership of Gains? This will
be discussed in the succeeding article.

Conjugal Partnership of Gains

 
In a Conjugal partnership of gains, the conjugal property is the income or property generated by both spouses during the marriage. Only properties and
income gained during the marriage form the conjugal property.  Conjugal partnership of gains can be rather complicated when you actually sit down to
calculate it.
 
Excluded from the conjugal partnership of gains are exclusive properties prior to marriage, properties obtained by gratuitous title, or properties that are
bought/redeemed/bartered with the exclusive money or property of the wife or husband.
 
So, property owned by one spouse before marriage remain the property of that spouse even after marriage.
 
In addition, property that has been obtained by the exclusive money of one spouse is the property of that spouse.
 
Lastly, property donated or inherited by a spouse during the marriage remains that spouse’s property.
 
Everything that is exclusively acquired is separate from the conjugal partnership of gains.
 
If the marriage ends in annulment, the net proceeds of the marriage are divided jointly. If ends through legal separation however, the net proceeds of the
marriage are awarded to the innocent spouse.
 
These are very different outcomes.
 
In addition, computing this type of separation can easily become quite confusing. It often takes effort to assess what these net proceeds are and become
complex when more assets are involved. 
 
Absolute Community of Property
 
Absolute community of property means that all property owned by either spouse becomes conjugal property upon marriage.
 
While you can execute a prenuptial agreement before the marriage, you cannot do anything about it afterwards – the law specifically forbids it.
 
 Excluded from the Absolute community of property are:
 

Properties acquired during the marriage by gratuitous title. Gratuitous means “without pay”. In this case, these are properties inherited or donated during the
marriage.

 

Property for the personal use of each spouse such as clothing, excluding jewelry.

 

Property acquired before that marriage by either spouse who has children by a former marriage. This is to protect the inheritance of the children of the
previous marriage.

Property acquired before that marriage by either spouse who has children by a former marriage. This is to protect the inheritance of the children of the
previous marriage.

 
Complete Separation of Properties
 
Properties of husband and wife are completely separate from each other. It means that there is no conjugal property. Instead, whatever is exclusively owned
is retained by the owner-spouse before and during the marriage. This pertains to any income or livelihood as well as to property.
 
What property regime applies to my marriage?
 
You can choose your conjugal property regime – but only before you are married.
 
Before marriage, Philippine law allows the future spouses to determine the property regime they want to govern their marriage.
 
They may decide on any one of the 3 regimes available:
 
          1. Absolute community
          2. Conjugal partnership of gains
          3. Complete separation of property
 
Additionally, the law provides a vague 4th option of “any other regime” — but only so long as the regime opted for is a valid one.
 
A valid regime is a regime that doesn’t break Philippine laws, which means that it’s wise to get expert advice to draft it.
 
If you have executed a valid agreement (or a pre-nuptial agreement) regarding your property before you married, then you are bound by this agreement.
 
But what if you did not execute a pre-nuptial agreement before your marriage?
 
In that case, you are governed by the default property regime in effect the year you married.
 
Prior to August 3, 1988 – Conjugal Partnership of Gains.
 
On and After August 3, 1988 – Absolute Community of Property.
 
So, if you have no prenuptial agreement the date you were married determines your conjugal property regime.
 
Marriage to a Foreigner
 
Things are straightforward when the marriage is between 2 Filipinos and concerns only Philippine property – but what happens when there is a foreign
element? Then things get a little tricky.
 
In cases where a foreigner is married to a Filipino or a there is foreign property, a pre-nup has to decide how to address inevitable conflicts in foreign law. It
may be possible to exclude these.
 
However, you should really consult with legal counsel for these cases.
 
In addition, you might want to consult counsel when you want to create a special pre-nup due to particular family situations.
 
This might be when you have an interest in a family corporation and are executing the pre-nup to protect the company.
 
Or, it may occur for properties you want to hold personally for sentimental or other reasons.
 
Conclusion
 
Absolute Community of Property is a form of Conjugal Property.  We are often confused with conjugal property with conjugal partnership of gains.
 
The important date to keep in mind is August 3, 1988.  Couple married prior to August 3, 1988 automatically defaults to conjugal property of gains, while
those couple married on or after August 3, 1988 automatically follow absolute community property, unless a pre-nuptial agreement has been executed.
 
In case of separation, the settlement will be primarily affected by the type of separation proceedings taken.