In the realm of family law, marriage settlements also known as prenuptial agreements or ‘prenups’, serve as vital instruments that couples can take advantage of to fix their property relations before tying the knot. This legal contract gives future spouses the opportunity to proactively define the rules that will govern the allocation and management of their properties during marriage instead of just following the default regime set by law.
In the Philippines, the notion of prenuptial agreements has shifted from a sensitive topic to a gradually accepted practice among couples. Traditionally, discussing financial arrangements before marriage is considered taboo, but as times change, more couples recognize the value of clarity and transparency in a healthy relationship.
This article delves into the legalities of prenuptial agreements, focusing on its basis in law, essential requirements, and its impact on the marital bond.
Under the Family Code, marriage is defined as “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 institutionwhose nature, consequences, and incidents are governed by law and not subject to stipulation.” 1 The only exception to this iron-clad rule is that “marriage settlements may fix the property relations during the marriage”, provided of course that the terms of the prenups are within the bounds of the Family Code. 2
By default, all marriages celebrated on or after August 3, 1988, when the Family Code came into effect, automatically fall under the absolute community of property regime 3 unless future spouses agree on the regime of conjugal partnership of gains, complete separation of property, or any other regime. 4 If the agreed-upon regime is void, the Family Code dictates that the system of absolute community of property shall govern. 5
Under the absolute community of property regime, all property owned by the spouses at the time of the marriage or acquired thereafter are considered community property. 6 Property acquired during the marriage is presumed to belong to the community, unless it is proved that it is among the exclusions provided by law, namely:
Once the absolute community of property regime is fixed, it cannot be terminated except in very specific instances allowed by law such as (1) the death of either spouse, (2) when there is a decree of legal separation, (3) when the marriage is declared annulled or void, and (4) when a court orders the judicial separation of property under certain instances provided for in the Family Code. 8
Given the broad scope and seeming permanence of the default property regime, couples who wish to have more control and flexibility when comes to property-related matters may opt to enter into prenuptial agreements and stipulate on their desired terms. In a prenup, couples can choose how their real estate, vehicles, jewelries, cash and other assets will be apportioned and managed. They can fix their entitlements to each other’s wages, commissions, inherited property, businesses and investments, insurance benefits, pension plans, etc. They can also stipulate on how taxes or debts will be paid. The couple can even fix dispute resolution procedures alternative to litigation in case the relationship goes sour in the future, or preset property division in case of annulment. Should the couple have children from previous relationships, the children’s inheritance can also be fixed in a prenup.
Verily, by entering into a prenuptial agreement, couples gain the ability to shape the rules governing their assets and liabilities, ensuring that their unique preferences and considerations are legally recognized. This proactive approach not only empowers spouses to tailor their financial arrangements but also serves as a legal instrument that safeguards individual interests, fostering transparency and understanding in the realm of marital property.
Prenuptial agreements find their legal basis primarily in the Family Code, particularly under Title IV, Chapter 4, which governs property relations between husband and wife. Article 75 of the Family Code specifically recognizes the validity of prenuptial agreements, provided the prenup meets the following requirements 9 :
Both the original prenuptial agreement and any modifications should be in writing, signed by the parties, and executed before the wedding. There are only a few instances where prenuptial agreements may be modified post-marriage and these are the following:
Notably, a prenuptial agreement functions essentially as a contract between the prospective husband and wife. As such, it must be entered into voluntarily by the spouses without mistake, violence, intimidation, undue influence or fraud. In addition, it must not contain any provisions that contravene any existing laws, moral standards, good customs, public order, or public policy otherwise it can be declared void and set aside by courts. 12
Finally, it is important to note that prenuptial agreements and their stipulations only become effective from the moment of celebration of the marriage. If the marriage does not take place, the terms of the prenuptial agreement are void. 13 As an exception, stipulations that do not depend upon the celebration of the marriage shall remain valid and effective. 14 An example would be the admission of paternity of an illegitimate child stipulated in the prenuptial agreement which will remain valid despite of the marriage not taking place.
Prenuptial agreements play a crucial role in contemporary society by providing couples with a proactive and legally binding framework to define their financial arrangements before entering a contract of marriage. Acceptance of prenuptial agreements is becoming increasingly important in the Philippines due to the evolving dynamics of modern relationships. Embracing prenuptial agreements in the Philippines reflects a progressive approach to marriage, acknowledging the importance of open communication and planning. By fostering a more accepting attitude towards prenuptial agreements, society can empower couples to make informed decisions, ultimately contributing to the stability and resilience of marriages in the face of potential financial challenges.
Embracing such legal instruments not only respects the diverse financial situations of couples but also promotes a culture of responsible and informed decision-making. Acceptance of prenuptial agreements in the Philippines reflects a harmonious blend of tradition and contemporary values, allowing couples to navigate the complexities of marriage with greater clarity and confidence.
Our experienced team is dedicated to assisting couples in crafting legally sound and tailored prenuptial agreements that align with their unique needs and preferences. Feel free to reach out to us for professional advice and support on your journey to a legally secure and harmonious marriage. Your peace of mind is our priority.
