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PROPERTY RULES

Of love and separation of assets

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(Conclusion)

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Q: What are the effects of a decree of legal separation on the property relationship of the parties?

A: The effects of a decree of a legal separation on the property relationship of the parties will depend on the kind of property relationship that governs the parties.

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Q: How will the properties of the parties be dissolved and liquidated if the property regime of the parties is conjugal partnership regime?

Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall apply:

(1) An inventory shall be prepared, listing separately all the properties of the conjugal partnership and the exclusive properties of each spouse;

(2) Amounts advanced by the conjugal partnership in payment of personal debts and obligations of either spouse shall be credited to the conjugal partnership as an asset thereof;

(3) Each spouse shall be reimbursed for the use of his or her exclusive funds in the acquisition of property or for the value of his or her exclusive property, the ownership of which has been vested by law in the conjugal partnership;

(4) The debts and obligations of the conjugal partnership shall be paid out of the conjugal assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties, in accordance with the provisions of paragraph (2) of Article 121;

(5) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them;

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(6) Unless the owner had been indemnified from whatever source, the loss or deterioration of movables used for the benefit of the family, belonging to either spouse, even due to fortuitous event, shall be paid to said spouse from the conjugal funds, if any;

(7) The net remainder of the conjugal partnership properties shall constitute the profits, which shall be divided equally between husband and wife, unless a different proportion or division was agreed upon in the marriage settlements or unless there has been a voluntary waiver or forfeiture of such share as provided in this Code;

(8) The presumptive legitimes of the common children shall be delivered upon the partition in accordance with Article 51;

(9) In the partition of the properties, the conjugal dwelling and the lot on which it is situated shall, unless otherwise agreed upon by the parties, be adjudicated to the spouse with whom the majority of the common children choose to remain. Children below the age of seven years are deemed to have chosen the mother, unless the court has decided otherwise. In case there is no such majority, the court shall decide, taking into consideration the best interests of said children. (Art. 129, Family Code).

Q: How will the properties of the parties be dissolved and liquidated if, on the other hand, the property regime of the parties is absolute community regime?

A: Art. 102. Upon dissolution of the absolute community regime, the following procedure shall apply:

(1) An inventory shall be prepared, listing separately all the properties of the absolute community and the exclusive properties of each spouse;

(2) The debts and obligations of the absolute community shall be paid out of its assets. In case of insufficiency of said assets, the spouses shall be solidarily liable for the unpaid balance with their separate properties in accordance with the provisions of the second paragraph of Article 94;

(3) Whatever remains of the exclusive properties of the spouses shall thereafter be delivered to each of them;

(4) The net remainder of the properties of the absolute community shall constitute its net assets, which shall be divided equally between husband and wife, unless a different proportion or division was agreed upon in the marriage settlements, or unless there has been a voluntary waiver of such share provided in this Code. For purpose of computing the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No. (2), the said profits shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution;

(5) The presumptive legitimes of the common children shall be delivered upon partition, in accordance with Article 51;

(6) Unless otherwise agreed upon by the parties, in the partition of the properties, the conjugal dwelling and the lot on which it is situated shall be adjudicated to the spouse with whom the majority of the common children choose to remain. Children below the age of seven years are deemed to have chosen the mother, unless the court has decided otherwise. In case there in no such majority, the court shall decide, taking into consideration the best interests of said children. (Art. 102, Family Code)

Q: What is forfeiture?

A: Forfeiture means that the offending spouse would have no right to any share of the net profits earned by either the conjugal partnership regime or absolute community regime. (Siochi vs. Gozon, G.R. No. 169900, March 18, 2010.)

Q: How is the net profits subject to forfeiture determined?

A: The net profits that will be subject to forfeiture in both conjugal partnership regime and absolute community regime will be both determined in accordance with the definition provided by Art. 102 (4), i.e.,

(4) The net remainder of the properties of the absolute community shall constitute its net assets, which shall be divided equally between husband and wife, unless a different proportion or division was agreed upon in the marriage settlements, or unless there has been a voluntary waiver of such share provided in this Code. For purpose of computing the net profits subject to forfeiture in accordance with Articles 43, No. (2) and 63, No. (2), the said profits shall be the increase in value between the market value of the community property at the time of the celebration of the marriage and the market value at the time of its dissolution. (Quaio v Quiao,  G.R. No. 176556, July 4, 2012)

Q: What is legitime?

Legitime is that part of the testator’s property which he cannot dispose of because the law has reserved it for certain heirs who are, therefore, called compulsory heirs. (Art. 886, Family Code)

Q: What is the presumptive legitime?

The delivery of the actual legitime happens after the settlement of the estate of the dead parent is concerned. In cases, however, where the decision of the court granting either the petition for annulment or petition for legal separation, are concerned, the children’s legitime should be delivered to them even if their parents are still alive.

The value of the properties already received under the decree of annulment or absolute nullity shall be considered as advances on their legitime. (Art. 51, Family Code)

Q: What is the legitime of legitimate children and illegitimate children?

A: The legitime of legitimate children and descendants consists of one-half of the hereditary estate of the father and of the mother. (Art. 888, Civil Code.)

The legitime of each illegitimate child shall consist of one-half of the legitime of a legitimate child. (Art. 176, Family Code)

Q: How will presumptive legitime be computed? In what form should it be delivered.?

A: The value of the presumptive legitime of all common children, computed as of the date of the final judgment of the trial court, shall be delivered in cash, property or sound securities, unless the parties, by mutual agreement judicially approved, had already provided for such matters. (Art. 51, Family Code)

Q: In case of legal separation, who will get the family home?

A: Unless otherwise agreed upon by the parties, in the partition of the properties, the conjugal dwelling and the lot on which it is situated shall be adjudicated to the spouse with whom the majority of the common children choose to remain.  (Art. 102 and 129, Family Code)

It is clear from the foregoing discussions, the breakdown of marital relationship is not a simply a matter of walking away from your spouse and children. Pain will not involve the heart, but also the pocket.

Ma. Soledad Deriquito-Mawis is currently the Dean of the College of Law at  the Lyceum of the Philippines. Deriquito-Mawis, Katerina Legarda, and Flordeliza Vargas are co-authors of the Family Law in the Philippines

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