It's nearly December, and in the Philippines, this is the most popular month to marry. As soon-to-be brides and grooms prepare for the big day, it is likely they are looking at just about every detail of the preparations and the accompanying paperwork to make the transition to married life easier.
If you’re one of them, you may be forgetting something important in your list: a prenuptial agreement.
Far from being sweet and romantic, it is often considered taboo to discuss your personal financial state with your loved one. But don’t make that mistake. Your and your fiancée’s personal finances are serious issues that you should be aware of when you enter a marriage, as the ceremony will bind you as a couple--lock, stock and barrel, including all the assets and liabilities that come with you.
All over the world, including the Philippines, the prenup is increasing in popularity. A legal document that goes into the details of property ownership, especially those acquired before marriage, it is seen as a valuable tool by many.
The Philippine Family Code states that the husband and wife will jointly own all property upon marriage, unless there is a valid prenuptial agreement that stipulates otherwise. This includes property that is owned by either you or your partner at the time of the marriage, and everything else that you acquire after. However, if you are based in the Philippines, where there is no divorce law, this means that all your properties will remain conjugally owned long after you’ve parted ways with your partner. Unless you go through a tedious process for the dissolution of ownership of properties, you will find yourself in this difficult position.
Considering that all break-ups are emotionally difficult and unhappy, you can expect this to be a messy process – unless you have a prenuptial agreement.
Unfortunately, despite their practicality, prenuptial agreements are still viewed negatively by many people, especially Filipinos. There are, however, some compelling reasons to get one, such as if you or your partner own a substantial amount of assets; if one of you co-own a business or an asset; if one of you is a national of a country with different rules governing property ownership; or if one of you have children from a previous relationship. In these instances, a prenup will simplify life for you.
Still can’t decide if a prenuptial agreement is right for you and your future spouse? Here are 10 things you should know.
1. Prenuptials cover properties only. Since the Philippines does not recognize divorce, this is the only aspect that is covered by the agreement.
2. To be considered valid, a prenup needs to be in writing. Verbal agreements are not recognized.
3. The agreement has to be done before the marriage. Additions or details included after the marriage will need a court order.
4. Prenuptials can be detailed or can be general. At the very least, it should include the names of the parties involved, the date of writing and signing of the agreement (which should be before the wedding), the country where it was written, a clause that indicates that parties entered voluntarily into the agreement, a full disclosure agreement, a severability clause, an arbitration or mediation clause, as well as clauses that discuss how future assets will be divided once the parties are married, and actions on the said assets if one of the spouses dies.
5. A statement of assets should be included as part of the prenuptial agreement. The parties have the option to exclude some assets from the coverage of the agreement.
6. It has to be entered into by the couple voluntarily. No one should have been forced into signing the agreement.
7. There should be assets and properties included in the prenuptial agreement. Otherwise, the prenuptial agreement is not valid.
8. The prenuptial agreement should be filed with the local civil registry where the marriage contract is filed and the Register of Deeds.
9. A prenuptial agreement can be voided if it is found to be contrary to law.
10. A prenuptial agreement takes precedence over the Family Code as far as properties are concerned. According to Article 74 of the Family Code, property relations between husband and wife shall be governed in the following order: 1) by marriage settlements executed before the marriage, 2) by the provisions of the Family Code, and 3) by local custom.
Always best to consult a legal professional to validate your understanding and these points outlined above.
At the end of the day, this is a decision you will be making as a couple. However make sure you are making an informed choice and that you enter the marriage with your eyes open. Money may not be a factor during the “honeymoon period” but sometimes disagreements about how to handle money, including the spending and saving of the family budget, can lead to serious arguments that could spell the end of your happily ever after. So go on and celebrate your love but be sure to be smart about it.
Grow Your Money is an editorial partnership between news.abs-cbn.com and Citi Philippines to promote financial education and provide helpful information to Filipinos on how to better manage their personal finances.
Visit www.citibank.com.ph for more information.