Should you talk about finances before getting married to your soon-to-be spouse? Of course, you should.
In his book “Smart Couples Finish Rich,” American financial expert David Bach says that talking about finances is part of knowing that your and your partner’s life aspirations are going in the same direction. The sooner you start having this conversation with your partner, the better off you’ll be.
Aside from discussing your partner’s salary or financial goals, considering prenuptial agreements before marriage might be beneficial.
Contrary to popular belief, prenuptial agreements aren’t only for the rich, famous, and wealthy. They can help couples encourage one another to create clear and reasonable objectives and expectations for their relationship.
What is a Prenuptial Agreement?
The Brief History of Prenuptial Agreement
Prenuptial agreements date back over 2,000 years ago in ancient Egypt. They were written or verbal contracts signed by the bride’s and groom’s respective parents, establishing the property that each spouse would bring to the marriage.
The Egyptians also utilized these agreements to calculate the bride’s dowry and bride price, or the amount of money a groom would give the bride’s family in return for marrying her.
The Hebrews have also used a premarital agreement called Ketubah, translated as ‘it is written.’ It was one of the first legal contracts to grant financial rights to women within marriages by ensuring that a woman inherited her husband’s property after his death.
The Prenuptial Agreement Based on the Family Code
A prenuptial agreement is a formal contract made by two people that generally includes all of each individual’s property. It also defines what property rights each person will have after the marriage.
According to Article 75 of the Family Code of the Philippines, or Executive Order No. 209, the future spouses may agree to the following conditions in a prenuptial agreement:
⦁ Absolute community system
⦁ Conjugal partnership of gains
⦁ Complete separation of property
⦁ Any other regime or system that is not contrary to law
The prenuptial agreement must also be legally binding. It should be in writing, signed by both parties, and created before marriage. In the absence of a prenuptial agreement, each of their property will become conjugal possession after marriage.
Reasons to Consider Prenuptial Agreement
Huge Number of Assets
Some wealthy families enter into prenuptial agreements to ensure that the wealth remains within their relatives by blood. Suppose there is no prenuptial agreement and one of their relatives dies unexpectedly. In that instance, they may find that their fortune has been considerably transferred to the unrelated surviving husband or wife.
Co-Ownership of a Business
If one of you co-owns a business or property, the other co-owner may not accept your spouse as a co-owner. Make it simpler by drafting a prenuptial agreement that specifies your spouse’s rights to this business or asset.
Existing and Future Debts of Spouse
Article 122 of the Family Code of the Philippines states that the law may compel the payment of personal debts incurred by either spouse before marriage against the partnership assets.
If your future spouse takes excessive risks with money or has debts to pay, you may find yourself in an unexpected situation where you are paying the bills due to their indiscretion.
In this situation, a prenuptial agreement might keep you from having to pay for your spouse’s debts or expenses.
Children From a Previous Relationship
For example, you have an illegitimate child with a third-party individual and a legitimate child with your legal spouse. If you don’t have a will, your legitimate child will inherit twice as much as your illegitimate child based on Article 895 of the Civil Code of the Philippines.
In this situation, an appropriately crafted prenup enables you to provide equally for your children, whether legitimate or illegitimate. They can have equal shares on the properties you have previously acquired.
The Benefits of Prenuptial Agreement in the Philippines
A prenuptial agreement can protect each spouse’s possessions if or when the marriage fails. If both parties can agree on what property belongs to whom, it will help prevent future turmoil and significant legal expenses.
A prenup can also be tailored to each couple’s individual and unique situation. They can feel free to incorporate distinctive and specific terms about their relationship, as well as legal and financial conditions.
Where to Consult for Prenuptial Agreement Services in the Philippines?
Finding a dependable, competent, and reputable law firm can be difficult. Fortunately, Yap, Kung, Ching, and Associates Law Office is here to help you. We have highly skilled and experienced lawyers who provide reliable legal services, such as handling business registration and working on corporate, tax, labor, and civil cases for corporations and individuals.
A prenuptial agreement is an essential topic that couples should discuss. It gives you greater control over how your current or future assets are shared or separated in a way that feels fair to your spouse.
If you and your partner are ready to enter into this agreement, you can consult with Yap, Kung, Ching & Associates Law Office. We make sure that our team fully understands your specific needs.
Reach out to us today for more details.