Prenuptial Agreements In The Philippines: A Guide

Wedding preparations can be a whirlwind experience, and couples can get caught up in choosing and booking their ceremony and reception venues and preferred suppliers. However, here’s one thing that soon-to-be wedded couples should sit down, discuss, and decide for themselves: whether a prenuptial agreement is right or not for them.

However, prenuptial agreements aren’t commonplace in the Philippines, making the decision-making process a bit more challenging. Smart Parenting spoke with Atty. Carmela Andal-Castro, a family lawyer and partner at Lopez Custodio Munoz and Castro, and Smart Parenting Board of Experts member, to shed light on prenuptial agreements in the country.

Table of Contents

• What is a prenuptial agreement?

• What happens if couples do not have a prenuptial agreement?

• Are prenuptial agreements common in the Philippines?

• Who should consider getting a prenuptial agreement?

• What are the advantages and disadvantages of having a prenuptial agreement?

• How can couples get a prenup and how much does one cost?

What is a prenuptial agreement?

Atty. Andal-Castro explains that a prenuptial agreement, also known as a marriage settlement or prenup, is essentially a contract between future spouses. It lists their assets, finances, and other important matters that will be handled in case of a divorce or separation, and it “outlines the property relations that will govern them as husband and wife.”

“It must be in writing, signed by the parties and executed before the celebration of marriage (Article 77, Family Code),” Atty. Andal-Castro emphasizes. “In the prenuptial agreement, the future spouses can agree on a different property regime, whether partial or complete separation of property, or any other regime (Article 75, Family Code).”

What happens if couples do not have a prenuptial agreement?

Atty. Andal-Castro explains that without a prenup, “the default property regime which governs property relations between husband and wife is ‘absolute community of property.’” This means that all properties and assets are considered community property, jointly owned by both husband and wife (Article 91, Family Code). If the future spouses prefer a different property regime to govern their property relations, then they should get a prenuptial agreement.

Are prenuptial agreements common in the Philippines?

Atty. Andal-Castro acknowledged that prenups are not exactly common among Filipino couples, and said that many are still uncomfortable in discussing or getting it. She said, “This can most likely be influenced by our traditional beliefs where it is quite ingrained in our culture that in marriage, two people come together and become one in all aspects.”

Who should consider getting a prenuptial agreement?

Atty. Andal-Castro believes that just as it is advisable for future married couples to openly communicate about their finances and how they plan to manage it, “it should not necessarily be a big deal for couples to discuss and sign a prenuptial agreement. The prenup agreement sets the stage for the future spouses to be open about their properties and forces them to think about the systems and goals that will guide their existing and future acquisitions.”

However, Atty. Andal-Castro also admitted that in general, both here and abroad, prenups are typically more common “when one spouse has substantially more assets than the future spouse. In these situations, entering into a prenup may give the spouse and his/her family a chance to better safeguard their assets in case things go awry in the marriage.”

Ultimately, getting a prenup is a personal decision. “Each couple is different in their circumstance and their objectives. Just like in anything related to considering marriage, open communication, full transparency and careful thought should go into discussions on this often sensitive topic.”

What are the advantages and disadvantages of having a prenuptial agreement?

According to Atty. Andal-Casto, here are the advantages of having a prenup:

• It helps couples determine each other’s financial position.
• It allows future spouses to get clear on how they want to govern their finances and property ownership.
• It can protect individual assets, including inheritances.
• It can prevent future conflict or family paranoia arising from income and asset division as well as in allocating resources for debts.
• It can protect you from your spouse’s debts, either pre-existing or those incurred in the future.

On the other hand, here are some possible disadvantages of having a prenup:

• Considering how prenups are perceived in society, some partners may see it as “starting on the wrong foot” or entering a marriage “with lack of trust.” Some partners and families can feel insulted by it and this can lead to couples deciding not to proceed with their union.
• The terms outlined in the prenup might not accurately reflect the couple’s changing circumstances since it was executed prior to their marriage, and as such might need to be updated later.

How can couples get a prenup and how much does one cost?

Atty. Andal-Castro advised couples to seek the assistance of lawyers to explore the idea of prenuptial agreements. She said, “There are a lot of technical aspects of a prenup, as required by the Family Code. For example, a prenup agreement must be in writing; it must be signed by both husband and wife; the signing must be done before the celebration of the marriage; and for it to have effect on third parties, it must be registered in the Local Civil Registry where the marriage contract is recorded, as well as in the property Registry of Deeds.”

With regards to the costs of a prenup, Atty. Andal-Castro said, “Legal fees vary per lawyer or law firm, but in general, these costs will include the professional fees for the preparation of the agreement, as well as fees for registering the same in the local civil registry.”

As couples embark on the journey of marriage, a prenuptial agreement can foster financial transparency and asset protection. And while it can seem daunting at first, legal guidance can ease the process and ensure informed decision-making. Ultimately, couples should remember that open communication and careful consideration are key to making informed decisions that benefit both parties and their growing family.

Atty. Carmela Andal-Castro is a family lawyer and partner at Lopez Custodio Munoz and Castro, and can be reached at cacastro@lcmclaw.com.