Prenuptial Agreement (Marriage Settlement) in the Philippine Context: A Comprehensive Guide

A prenuptial agreement—referred to in Philippine law as a “marriage settlement”—is a contract entered into by a couple before they marry, specifying the property regime and other financial arrangements that will govern their marriage. It can also clarify or modify certain legal consequences of marriage as long as these do not violate existing laws or public policy. In the Philippines, marriage settlements are chiefly regulated by the Family Code of the Philippines (Executive Order No. 209, as amended). Below is an in-depth discussion of everything one needs to know about prenuptial agreements in the Philippines.

1. Legal Basis and Definitions

1.1. Family Code Provisions

Articles 74 to 81 of the Family Code of the Philippines govern property relations between spouses, including prenuptial agreements (marriage settlements).
If no valid prenuptial agreement exists, the default property regime for marriages celebrated under the Family Code (i.e., on or after August 3, 1988) is the Absolute Community of Property (Article 75, Family Code).

1.2. Terminology

Prenuptial Agreement in common parlance is legally termed as a “Marriage Settlement” in Philippine law.
Absolute Community of Property (ACP) is the regime in which almost all properties acquired by either spouse prior to and during marriage become part of a single community property, unless excluded by law or validly set aside in a prenuptial agreement.
Conjugal Partnership of Gains (CPG) is another property regime recognized under Philippine law. However, under the Family Code, it only applies if validly chosen in a marriage settlement, or if the spouses were married under the old Civil Code before August 3, 1988 and did not stipulate otherwise.

2. Purpose of a Prenuptial Agreement

A prenuptial agreement is primarily utilized to define and protect property rights and financial interests of each spouse. Its usual purposes include:

Designation of Property Regime: The couple may choose from existing regimes—such as the Conjugal Partnership of Gains, Complete Separation of Property, or any other regime allowed by the Family Code—instead of adopting the default Absolute Community of Property.
Protection of Separate Property: If one or both spouses own significant assets or businesses prior to marriage, a prenuptial agreement can ensure that these remain separate.
Prevention of Future Disputes: Clarity about property rights and obligations reduces the risk of litigation should conflicts arise.
Succession Planning: Although succession is generally governed by Philippine inheritance laws, a prenuptial agreement can indirectly affect estate planning by clarifying which assets are exclusive or community property.

3. Key Features and Scope

3.1. Property Relations

A valid prenuptial agreement may cover:

Which assets will form part of the common property (or whether no common property exists, in the case of complete separation of property).
How income and expenses will be managed during the marriage.
How assets and liabilities acquired before or during marriage will be treated.

3.2. Limitations

Public Policy and Prohibited Stipulations: Any clause that violates law, morals, good customs, public order, or public policy is void (Article 1306, Civil Code; Articles 75 and 88, Family Code). For instance, clauses that limit a spouse’s duty of support to the other or to their future children, or that curtail fundamental marital obligations set by law, are invalid.
Future Child Custody and Support: Philippine courts do not allow prenuptial agreements to predetermine child custody or waive future child support. Child support is a matter of public interest and cannot be renounced (Article 2035, Civil Code).
Personal Rights and Duties: Provisions regulating purely personal aspects of marriage (e.g., agreements on sexual relations, decisions on whether to have children, etc.) have no legal effect in a prenuptial agreement.

3.3. Formal Requirements

Under the Family Code (Article 77), a prenuptial agreement must comply with these formalities:

Executed Before Marriage: The marriage settlement must be signed and notarized before the celebration of the marriage.
In Writing and Notarized: The agreement must be in a public instrument (notarized by a notary public).
Registration: To bind third parties (e.g., creditors or future purchasers of property), the prenuptial agreement should be recorded in the local civil registry where the marriage contract is registered, as well as in the proper registries of property where the real properties are located (Article 77, Family Code).
Effectivity Date: A prenuptial agreement takes effect upon celebration of the marriage (Article 81, Family Code). If the marriage does not take place, the agreement is without effect.

4. Process of Drafting and Execution

4.1. Consultation with a Lawyer

Legal Advice: Engaging a lawyer is crucial. Counsel ensures that the agreement meets legal requirements, accurately reflects the parties’ intentions, and avoids unenforceable provisions.
Conflict of Interest Concerns: Each spouse may prefer to have independent legal advice to avoid issues of undue influence or unconscionable advantage.

4.2. Disclosure of Assets and Liabilities

Full Disclosure: Although Philippine law does not explicitly require the same extensive disclosure standard as in some jurisdictions, full and honest disclosure of each party’s assets and liabilities helps ensure fairness and guard against future claims of fraud or bad faith.

4.3. Negotiations and Drafting

Clarity and Specificity: The agreement should be detailed enough to cover current assets, liabilities, businesses, incomes, and any potential future acquisitions.
Avoid Overly Broad or Vague Language: Clauses must be drafted precisely to reduce ambiguity, which courts could interpret against the drafter if disputes arise.

4.4. Signing, Notarization, and Registration

Signing: Both parties must sign the final draft of the prenuptial agreement in front of a notary public.
Notarization: A notary public certifies the document as a public instrument, thereby validating its authenticity.
Registration: To affect third parties, register the agreement with the local civil registrar where the couple intends to register their marriage. For real properties, the agreement should also be annotated at the Registry of Deeds.

5. Effects and Implications

5.1. Property Management During Marriage

Depending on the chosen regime:

Absolute Community of Property (ACP): All properties owned by the spouses prior to marriage and acquired thereafter generally form one community, except those exempt by law.
Conjugal Partnership of Gains (CPG): Only incomes and properties acquired during the marriage (fruits, products, and gains) become part of the conjugal partnership, while each spouse retains ownership of the properties they owned prior to marriage.
Complete Separation of Property: Each spouse retains full ownership over all their properties (both before and after marriage), including sole management and control, unless otherwise stipulated. Debts and liabilities are borne by each spouse individually, barring specific agreements to the contrary.

5.2. Effect on Creditors

Third parties, such as creditors, can only be bound by the prenuptial agreement if it was duly registered. If unregistered, creditors may still hold one or both spouses liable based on the default or presumed property regime.

5.3. Tax and Inheritance Considerations

Estate Tax / Inheritance: While prenuptial agreements do not override compulsory heir provisions in Philippine succession law, clarifying which properties are separate versus communal affects the estate ultimately included in a spouse’s net taxable estate.
Gift Taxes: If transfers of property between spouses are made during the marriage, it could have gift tax implications, although transfers by reason of marriage and partition of properties between spouses may have exemptions under certain circumstances.

6. Modification, Revocation, and Nullity

6.1. Modification or Revocation During Marriage

Under Article 76 of the Family Code, changes to the marriage settlement cannot generally be made after the marriage has already taken place, except in certain cases authorized by law (e.g., judicial separation of property).
If spouses wish to change their property regime after marriage, they must file a petition in court demonstrating valid reasons and ensuring no prejudice to creditors or third parties.

6.2. Grounds for Nullity of a Prenuptial Agreement

A prenuptial agreement may be declared void or voidable if:

It violates mandatory provisions of law or public policy.
It was not executed in the form prescribed by law (i.e., not in a public instrument, not signed before marriage).
There was fraud, mistake, undue influence, or misrepresentation in its execution.

7. Practical Considerations and Best Practices

Early Planning: Start discussions about property arrangements well before the wedding date to avoid rushed decisions and ensure time for thorough drafting and review.
Independent Legal Counsel: Each party consulting separate counsel avoids conflicts of interest and future legal challenges about voluntariness or fairness.
Transparency: Even though Philippine law does not explicitly require a formal disclosure statement, being open about assets and liabilities fosters mutual trust and strengthens the document’s enforceability.
Detailed Enumeration of Assets: Provide clear descriptions or attachments (e.g., schedules of properties) to reduce uncertainty.
Regular Updates: If there is a significant change in financial circumstances before the wedding date, consider updating or re-executing the agreement, bearing in mind that substantial alterations could require re-signing, re-notarization, and re-registration.

8. Frequently Asked Questions (FAQs)

Is a prenuptial agreement mandatory in the Philippines?
No. The Family Code automatically applies the regime of Absolute Community of Property if the couple does not execute a valid prenuptial agreement.
Can a couple use a foreign law in their Philippine prenuptial agreement?
Generally, the property relations of spouses domiciled in the Philippines are governed by Philippine law, but a choice-of-law clause may be recognized if it does not violate public policy and if there is a substantial connection to the foreign jurisdiction. Legal advice is critical in such cases.
Does a prenuptial agreement affect child custody and support?
No. Child custody and support are matters of public policy. Any agreement attempting to waive or predetermine these rights is void.
Can a prenuptial agreement be kept private?
While the contract itself may be kept confidential, it must still be notarized and registered (for real properties) to be binding on third parties. Anyone with a legitimate interest (e.g., a creditor) could access the public records.
What happens if the prenuptial agreement is lost or not properly registered?
Nonregistration only affects enforceability against third parties. Between the spouses themselves, a properly executed, notarized agreement remains binding, but issues can arise if there is no evidence of its existence or terms. Safekeeping and proper registration are crucial.

9. Conclusion

A prenuptial agreement (marriage settlement) is a powerful legal instrument in the Philippines that allows future spouses to define their property relations and protect their respective financial interests. It is governed by explicit formal and substantive requirements found in the Family Code. When properly executed and registered, it provides clarity and certainty about how assets and liabilities will be managed or distributed, significantly reducing potential legal disputes during or after the marriage.

Nonetheless, to be effective, it must be prepared before marriage, in writing, notarized, and, ideally, registered with the local civil registry (and the Registry of Deeds for real properties). Couples contemplating such an agreement should seek professional legal advice, ensure full transparency about their financial situation, and adhere strictly to the formalities required by law. By doing so, they can craft a prenuptial agreement that aligns with their intentions, respects each spouse’s rights, and upholds Philippine public policy.