Conjugal assets and liabilities is a pivotal foundation that navigates the landscape of property ownership for married couples in the Philippines. Marriage is a union between two spouses both legally and of the church. And the question that arises is how assets and liabilities are treated within the boundaries of marriage. As complex as marriage can be, financial assets and liabilities are often overlooked and can be a potential obstacle in living a happy married life. In this article, we will discuss what conjugal assets and liabilities are and the marital property regimes in the Philippines.
What are Conjugal Assets in the Philippines
Conjugal assets are defined by legal arrangement of between spouses regarding properties. The Philippines follows a system known as the “Absolute Community of Property” for married couples without a prenuptial agreement regarding assets, properties, or liabilities of any kind. This means that all assets acquired by either spouse are considered part of the Absolute Community of Property and are owned by both spouses, during the marriage.
However, there are exceptions to the regime of Absolute Community of Property which are assets earned through inheritance,donations, or exclusive properties owned before marriage which may be considered as personal property.
Examples of Conjugal Assets
- Real Estate such as houses, apartments, land, or vacation homes, can become conjugal assets when acquired by a married couple during the duration of their marriage. These properties are typically considered joint assets, owned equally by both spouses. The classification as conjugal assets stems from the shared financial contributions and efforts of both partners towards the acquisition, maintenance, and improvement of the properties.
- Financial Accounts play an important role in conjugal assets within the context of marriage. These accounts encompass various forms of monetary ownership such as bank accounts, investment portfolios, and retirement funds. Financial assets that are accumulated during the course of marriage are considered conjugal assets.
- Vehicles: ranging from the practicality of cars to the thrill of motorcycles, or any type of motor vehicle, bears a distinctive place in the conjugal assets. When motor vehicles are acquired during marriage, they typically fall under the classification of conjugal assets. This classification is carried by the understanding that both spouses have agreed to the purchase, maintenance, and utilization of these vehicles throughout their marital journey.
- Household Items: Furniture, appliances, electronics, and other household items acquired during the marriage can be considered conjugal assets. These items, acquired over the course of marriage have the potential to be considered as conjugal assets.
- Business Interests: Ventures, startups, or any type of businesses initiated during the course of marriage can be identified as conjugal property or asset. This means that any equitable interests are shared among spouses, which describes an equitable division or distribution.
What are Conjugal Liabilities in the Philippines
Similar to conjugal assets, conjugal liabilities are debts, loans, or mortgages shared during the course of marriage, between spouses. These conjugal liabilities are joint responsibilities and are subject to division or distribution by default in the constitution of marriage in the Philippines.
Under the Absolute Community Property regime, both spouses are subjected and considered equally responsible for the debts and liabilities taken by either spouse during the marriage.
Any debts and obligations acquired during the marriage are considered conjugal liabilities and can be collected from their conjugal assets. In other words, creditors can potentially take a married couple’s assets as collateral or payment to satisfy these liabilities, depending on the legal jurisdiction.
Examples of Conjugal Liabilities
- Home Mortgage: Taking out a mortgage to purchase a home during marriage would be considered as a conjugal liability. Both spouses are responsible for the mortgage, maintenance, repairs, and everything else involved in the property.
- Car Loan: Either of the spouse that acquired a car loan, including the outstanding balance of the car financing during the marriage can be considered as conjugal liability.
- Credit Card Debt: If either spouse uses a joint credit card to make purchases, the resulting credit card debt would be considered a conjugal liability, regardless of which spouse made the purchases.
- Personal Loans: Loans taken out by either spouse during the marriage, such as for educational purposes, medical expenses, or other personal reasons, can be considered conjugal liabilities.
- Business Debts: If one or both spouses are involved in a business venture and take on business-related debts during the marriage, those debts may be considered conjugal liabilities.
- Tax Liabilities: Any tax debts or liabilities accrued by either spouse during the marriage would typically be considered conjugal liabilities.
- Medical Debts: Medical bills incurred by either spouse during the marriage, whether for themselves or for their children, could be considered conjugal liabilities.
Common Mistake When Dealing with Conjugal Assets and Liability in the Philippines
- Total opposites when it comes to money
When couples have significantly different views on how to handle money, it can lead to conflicts and difficulties in managing conjugal assets and liabilities. This can hinder the progress of both parties’ financial capabilities and opportunities, leading to a bigger financial burden towards the marital relationship.
- Misaligned financial priorities
If partners prioritize spending on different things, it can lead to arguments and disputes about where resources should be spent and managed. It’s important to talk about and be aligned with financial priorities in order to develop a healthy financial state within the marriage.
- Financial secrecy
Keeping financial matters hidden from a partner such as hidden debt, purchases, can hinder effective management of conjugal assets and liabilities .As union by marriage and as a couple, both spouses should be responsible for everything conjugal related finance.
- Going over the budget
When purchasing, even on personal luxury to properties, going beyond the established budget can strain both personal and conjugal finances. This can potentially lead to debt accumulation, affecting both partners.
- Inability to compromise
It’s essential for couples to consider negotiation and alternative methods to find a common ground and arrive at an agreement in terms of finances. Disagreements over spending, saving, and budgeting can lead to financial strain and difficulties, affecting the financial stability of the couple and potentially leading to further debt.
How to Protect Your Personal Assets When Married in the Philippines
With conjugal assets and liabilities becoming an inevitable factor for married couples, it’s easy to overlook your personal belongings. Establishing boundaries between your personal assets and joint assets of you and your spouse is a key factor in marriage.
Here are some basic ways to protect or set boundaries between your personal assets and conjugal assets:
- Prenuptial Agreement
Getting a prenup can be quite controversial to some couples, but it is a practical and logical way of setting boundaries of what you own. Getting a prenup is what protects you and your personal assets.
This legal document outlines how assets and liabilities will be managed in case of divorce, separation, or the death of a spouse. A prenup can help protect your individual assets and outline the distribution of conjugal assets and liabilities.
- Transparency and Communication
In any aspect of relationships, especially in marriage, transparency and communication is key. Openly discuss your financial situation with your spouse. Transparency about existing debts and financial obligations can help both parties make informed decisions and plan accordingly.
- Separate, Personal Bank Accounts
Maintain separate bank accounts for individual and joint expenses. This can help segregate personal liabilities from conjugal liabilities. In this way, you can track everything that goes in and out of your personal finances.
- Make financial decisions together
Marriage is union between spouses, and making financial decisions as one is essential. It is best to make decisions as a couple to maintain a healthy financial state. In everything conjugal assets related, whether it’s a car, a house, a business venture, it’s paramount that you and your spouse take a practical approach. This enables married couples, as individuals, to carefully analyze their financial situation, allowing them to come to an agreement.
- Seek Legal Advice
Consulting with legal professionals who specialize in family law can help you understand and set boundaries with personal and conjugal assets and liabilities. Legal professionals can provide guidance on protecting your assets and mitigating liabilities.
Disclaimer: This article serves to provide general and basic information about conjugal assets and liabilities and does not constitute family law and financial advice. For personalized family and financial guidance, it is recommended to consult with a certified financial professional who can tailor their advice to your specific needs and circumstances.
Conclusion
Establishing boundaries between personal and conjugal assets and liabilities is key in maintaining a healthy relationship with finance and with your spouse. From planning, to purchasing, it’s essential that both parties are transparent and involved in making financial decisions.
Open conversations about money, talking about saving goals and necessary expenses, can be likened to mapping out a financial route. This practice involves teamwork and working as one, where both partners collaboratively determine the financial direction they wish to pursue and achieve.
It is essential to take in mind that this isn’t solely about finances. It’s about comprehending each other and working harmoniously to establish a future that caters to both emotional and financial stability. Thus, maintaining ongoing discussions, devising shared financial strategies, and collaborating for a healthy and affectionate relationship deems important.
