A couple can separate the Marriage Property without going through the acrimonious process of a Legal Separation.
This article covers how to Divide Conjugal Property by discussing how to file Judicial Separation of Property in the Philippines and the Grounds for Judicial Separation of Property.
Spouses of a failing marriage really should consider Judicial Separation of Property. It is a simpler way to divide Conjugal Property when compared to the Annulment vs Legal Separation routes.
Judicial Separation of Property is a court case. It is:
An Annulment case will include the dividing of Conjugal Property but it may take twice as long.
Legal Separation also ends the Conjugal Property regime as well but it is expensive, time-consuming, and much more difficult.
Spouses undertake a Judicial Separation of Property because they want to divide Conjugal Property.
This may be because they plan to end their marriage.
Or they want to separate out the property they owned personally before they married from the Conjugal Property.
If you would like to discuss your particular case further you can contact us here.
Conjugal Property is income or property generated by both Spouses during their marriage.
In the absence of a Prenuptial Agreement, Philippine Conjugal Property Law sets the property relations between Spouses.
The default Property Regime in Philippine law is Absolute Community of Property. [1]
Houses including the Family Home usually form part of Conjugal Property.
Under the Absolute Community of Property, husband and wife are joint owners of all the properties of the marriage.
Whatever property each Spouse brought into the marriage and all properties acquired during the marriage (with some exceptions) form Conjugal Property.
If the couple’s Community of Property is legally Dissolved, these common properties are divided between them.
It is divided equally or in the proportion the parties have established, irrespective of the value each Spouse may have originally owned.
Clothes are excluded from Conjugal Property during a Judicial Separation of Property as it is for the use of only one Spouse.
The only properties exempted from the Absolute Community of Property are the following:
I’ve written on this before. In Legal Separation, the Net Profits of the Conjugal Property is awarded to the Innocent Spouse which means that this court case is expensive, time-consuming, and is generally a court battle between the Spouses.
The court determines which of the Spouses is the Innocent Spouse.
For Legal Separation to be granted by the Court, there must be one guilty Spouse.
The rule is that the guilty Spouse has no right to the Net Profits of the Conjugal Property.
The guilty Spouse’s share of the Net Profits is forfeited in favor of the children or the Innocent Spouse.
Shares form part of Conjugal Property
The Net Profits of the Conjugal Property is defined as the increase between the Market Value of that Conjugal Property at the time of the marriage and its Market Value at the time of Dissolution.
This is significant.
It means that, if the Spouses had no assets when they married young, and they built up their assets over the decades since, then the guilty Spouse will have no share in any of these assets because they are all classified as Forfeited Net Profits.
In the case of Legal Separation the Conjugal Properties Net Profits are awarded to the “Innocent” Spouse.
It makes the entire exercise a “winner takes all” contest which discourages compromise.
For this reason, Legal Separation is often disputed, protracted, punitive, and quite draconian.
Nonetheless, Legal Separation is what people often think of when they wish to separate their property from the property of their Spouse.
But there is another way, and that is through Judicial Separation of Property.
Judicial Separation of Property and Legal Separation are both court cases that end the Conjugal Property Regime but do not end the marriage. However, Judicial Separation of Property is faster, cheaper and far less risky when compared with Legal Separation.
Let’s go through this in detail.
Legal Separation and Judicial Separation of Property are two are different cases based on different parts of the Family Code. [3]
Under Legal Separation, the Spouses become entitled to live separately from each other and their obligation of mutual support ceases in addition to dividing the Conjugal Property.
The law defines Legal Separation and Judicial Separation of Property differently.
In contrast, Judicial Separation of Property is concerned primarily with dividing the Conjugal Property. The other marital obligations are unaffected.
In fact, the Spouses themselves do not necessarily have to be Separated when undertaking this Judicial Separation of Property. They may wish to remain together and simply separate their property.
The Grounds for Judicial Separation of Property can be either Voluntary (where the Spouses agree) or for Sufficient Cause, which I go into detail down below.
Voluntary Separation of Property involves both Spouses filing a joint Petition to separate their Conjugal Property.
This means that they agreed to divide their property between them.
Their common agreement is grounds enough for a Judicial Separation of Property.
They then submit their proposal for how to divide the property to the Court.
Both spouses can file for Judicial Separation of Property. Or only one Spouse can file using Sufficient Cause.
With Separation of Property for Sufficient Cause, just one of the Spouses can file for Judicial Separation of Property on the basis of Sufficient Cause.
The following are Sufficient Cause:
(1) That the Spouse of the Petitioner has been sentenced to a Penalty which carries with it Civil Interdiction (deprived the right to manage and dispose of his property);
(2) That the Spouse of the Petitioner has been Judicially declared an Absentee;
(3) That Loss of Parental Authority of the Spouse of the Petitioner has been decreed by the court;
(4) That the Spouse of the Petitioner has abandoned the latter or failed to comply with his or her obligations to the family as provided for in Article 101 of the Family Code;
(5) That the Spouse granted the Power of Administration in the Marriage Settlements has abused that power; and
(6) That at the time of the Petition, the Spouses have been Separated In Fact for at least one year and reconciliation is highly improbable.
In the cases provided for in Numbers (1) , (2) and (3) , the presentation of the Final Judgment against the guilty or absent Spouse is enough basis to grant the Petition. [4]
Sufficient Cause (6) is of significant interest because, as with Voluntary Separation, it offers the Spouses a De Facto no-fault Separation of Property.
To file for Judicial Separation of Property, you will need to present the division of the Conjugal Property and determine the Grounds so that the case can be filed. You will also need to present Witnesses in court to testify.
Below is a brief discussion of how to file Judicial Separation of Property in the Philippines and what to expect from the court case:
A Sworn Petition, either jointly or singly, has to be filed with the Family Court. [5]
All Creditors of the marriage, including any Personal Creditors of the Spouses, must be listed in the Petition. These Creditors must be notified that a Petition was filed in court. The court shall take measures to protect the Creditors and other persons with a Pecuniary Interest in the marital property. [6]
The Absolute Community of Property or the Conjugal Partnership shall pay for the support of the Spouses and their children while the case is pending. [7]
The Petition will be heard by the Family Court.
If the Petition is Voluntary (i.e. jointly filed by the Spouses), it need not even give the Spouses’ reason for the Separation of Property because the agreement of the Spouses is enough. But if the reason given is found to be against Public Policy, the court must reject the Agreement. [8]
The Petition to Separate the Property may even propose exactly how the properties are to be separated. If this proposal is not contrary to Law and Public Policy, it shall be granted by the court. The Agreement for the Division of the Community Property must be equal unless a different division has been agreed upon in a Prenuptial Agreement or unless a Waiver of this share is allowed by the court. [9]
Get your files in order as you will need a complete inventory of the Marital Property
Once the separation of property has been decreed, the marriage properties will be liquidated in accordance with the Family Code. [10] The Family Code describes the process of liquidating the conjugal properties thus:
(1) An inventory should be prepared, listing separately all the Conjugal Properties of the marriage and the Exclusive Properties of each Spouse.
(2) The debts and obligations of the marriage shall be paid out of its Conjugal Property. In case these assets are insufficient, the Spouses shall each be solidarily liable for the unpaid balance.
(3) Whatever remains of the Exclusive Properties of the Spouses shall then be delivered to each of them.
To divide Conjugal Property between the Spouses, the Common Debts must be paid first.
(4) The Net Remainder of the Conjugal Properties are its Net Assets.
These will be divided equally between husband and wife, unless a different proportion or division was agreed upon in the Marriage Settlements (Prenuptial Agreement), or unless there has been a Voluntary Waiver.
[Involuntary Forfeiture of the Net Profits by a guilty Spouse is not provided for under Judicial Separation of Property. It is a specific consequence only in cases of Legal Separation or of bigamous marriages in bad faith.] [11]
(5) The Presumptive Legitimes of the Common children (children of the marriage) shall be delivered upon partition. [M. Sta. Maria (2010) is of the opinion that this is an optional provision which need not be complied with.]
The Family or Conjugal Home goes to the Spouse with custody of most of the minor children
Each Spouse controls his own Estate after the Separation of Property court proceedings.
This means that each Spouse shall own, dispose of, possess, administer and enjoy his or her own separate Estate, without the need for the consent of the other.
To each Spouse shall belong all earnings from his or her profession, business or industry and all fruits, natural, industrial or civil, due or received during the marriage from his or her separate property. [14]
Both Spouses shall bear the subsequent family expenses in proportion to their income, or, in case of insufficiency or default thereof, to the current market value of their separate Properties.
However, expenses of the family shall be borne in proportion to their income or the Market Value of their Estate.
However, the Liabilities of the Spouses to Creditors for family expenses shall be solidary and the Separation of Property shall not prejudice the rights previously acquired by Creditors. [15]
