Prenup questions from a concerned bride

We received a very intriguing question from a future bride who was most concerned about the possibility of her having to enter into a prenuptial agreement. Is this an issue that those who are planning to get married should seriously consider? Here’s the query:

Q: I am getting married next year to a Filipino-Chinese guy. I am expecting a prenup arrangement since he comes from a family of big business. What are the rules in prenups? And the whys? Do I have a choice in the matter? – Susan G.

A: A prenuptial agreement (commonly called a prenup) is a legally binding contract signed by a couple before marriage. This document dictates how assets, debts and spousal support will be divided if the marriage ends in divorce or death, allowing the couple to override default state or local marital laws.

Since a prenup agreement is more of a legal arrangement that is not generally entered into by regular or majority of couples who are about to get married, we consulted a lawyer, Atty. Heidi Galos of the Galos Law Office, and asked her for her opinion/thoughts on the matter.

As it turns out, she is in favor of couples discussing and agreeing on financial matters before their marriage.

Atty. Galos is a graduate of the UP College of Law Class 1979. She started as a tax lawyer at Sycip Gorres and Velayo (SGV) and became a litigation lawyer when she joined Puruganan, Ongkiko Chato law office.

She transferred to Alampay Mahit Law Office as a junior partner and became a legal consultant at the Department of Agrarian Reform for a short time before she formed her own law office with her siblings who are now both deceased.

We asked her the following questions and here are her very valid and clear replies:

THE PHILIPPINE STAR: Who or what kind of couples are usually “qualified” or interested to enter into prenup agreements?

ATTY. HEIDI GALOS: The governing law on pre-nuptial agreement, legally called marriage settlements, are contained in Art. 74 et seq of the Family Code.

There is no legal qualification for a couple to enter into a prenup. As long as they are planning to get married, they can enter into a prenup (I am assuming, of course, that they are both qualified to get married). Usually, the parties that enter into a prenup belong to the upper echelon of our society. But a “poor” couple is not disqualified from entering into a prenup.

In my opinion, couples who have a lot of properties to their names or have inherited many properties which they (or their families) don’t want to become conjugal (or common) property should consider entering into prenups.

Are there any basic rules that the couples should know before they consider going into it?

The prenuptial agreement must be in writing, signed and executed before the marriage and must be registered in the civil registry where the marriage is celebrated (Art. 77).

The future couple must give this a lot of thought and discussion so that it does not become a cause of any future arguments or questions about properties.

I have been advising and drafting prenup agreements for clients. If asked what is my opinion on the “best” property relationship, I must admit I am partial to the conjugal partnership of gains (CPG). In the prenuptial agreement, the parties can agree on the laws that will govern their property relationship, i.e. regime of absolute community, conjugal partnership of gains, complete separation of property or a combination thereof. (Art.75)

Have you advised or handled actual cases of prenups here in the Philippines? How successful or fruitful were those agreements and how did they end up?

As to the best approach or steps, it depends. I had a client who got offended when her son’s fiancée suggested a prenup. I had to explain to her that it was a good suggestion and was not in any way offensive. The prenups that I handle are not as complicated as those we read about in foreign gossip magazines. I think prospective brides and grooms should be encouraged to discuss financial matters before they get married.

Let me share with you an actual opinion I sent to a client/bride explaining each party’s property regimes that she and her fiancé could agree on in their prenuptial agreement. I told her that if no prenup agreement is executed prior to the marriage, the property relationship of the parties shall be deemed absolute community of property. This means all their properties will be communal or co-owned by both husband and wife.

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We are sharing here selected parts of a letter Atty. Galos sent to her client as her recommendation on “Property Regimes.” This should give the readers a general idea of what properties may be involved.

Absolute Community of Property (ACP). Any and all properties acquired by the parties prior and during the marriage including the income, fruits and/or increments shall be owned by both parties, except:

1. Property acquired during the marriage by gratuitous title (i.e. inherited and or acquired by donation) including the fruits and income shall not form part of the ACP and shall be the separate property of the person inheriting or acquiring the same;
2. Property for personal and exclusive use of either spouse except jewelry (which shall be considered as part of ACP);
3. Property acquired before the marriage including its fruits and the party acquiring the same has legitimate children from a former;
4. Losses from game of chance, betting or any form of gambling but any winnings therefrom shall form part of the ACP.

Both parties can manage and administer the ACP but the husband’s decision shall prevail. Wife can go to court within five years to question husband’s decision.

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There were two other recommendations—CPG and Regime of Complete Separation of Property—but for the purposes of this column we are choosing not to share its contents here. We believe our letter sender and our readers will already have an idea of what a prenup contains.

To summarize, we have come to the conclusion that a prenup agreement is essentially a “property relationship” between a future husband and wife which, according to the Family Code, shall be governed in the following order:

1. By marriage settlements executed before the marriage
2. By the provisions of the Code
3. By local custom

Personally, I believe that in today’s highly “suspicious society” where culture seems to have shifted toward systemic mistrust, personal protection, and a general climate of fear for oneself and what the future holds, perhaps a prenup is a good option that prospective couples thinking of marriage (specifically the ones with tons of properties) can consult a lawyer about to discuss “settlements” in case the marriage does not work.

But I still like to think back to those simpler, more optimistic times when those of us who were thinking of marriage only considered our love and deep feelings for each other without even giving a thought to the possibility of separation of our assets and properties. Today, very obviously, times have truly changed. Romance must be balanced with foresight, wisdom and mutual protection.

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For those of you who may be interested to find out more details about prenups, we recommend calling or booking an appointment with Atty. Heidi Galos.

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