Secure Each Other's Finances Through a Prenuptial Agreement

There is a popular saying about entering into a commitment in Filipino that marriage is not like hot rice that you can spew out when your tongue gets burnt.

One of the most important reasons that a couple must deal with before having the commitment of marriage is how they can settle their finances. We could see some celebrities these days that are currently going through the process of separation agreement because of various reasons; thus, it is critical that you and your partner understand each other and are on the same page about everything.

That is why, in addition to discussing finances, you and your potential husband should consider prenuptial agreements if you are intending to get married. In fact, in some countries, a valid prenuptial agreement is legally enforceable under their civil code before getting married.

But before anything else, let's talk about the meaning of a prenuptial agreement.

What are prenuptial agreements?

In the Philippines, many people believe that prenuptial agreements are reserved for the affluent and famous. This is not the case at all. As it happens, prenuptial agreements may assist couples in setting attainable goals and expectations for their relationship.

In the case of a divorce, a prenuptial agreement protects both parties' financial interests by stipulating the distribution of their assets. Each spouse's property rights are also clearly stated in this contract. Prenuptial agreement must be legally binding. When a couple gets married, they should execute a prenuptial agreement before they say "I do". If they don't have a prenuptial agreement, all of their personal property will be considered conjugal property as soon as they tie the knot.

In the case of a divorce or other termination of the marriage, a prenuptial agreement may protect the existing and future property of each spouse. If both parties are able to agree on who owns what, it will assist avoid future legal disputes and hefty costs.

A prenuptial agreement may also be adapted to each couple's specific scenario. They are permitted to use terms and conditions that are unique to their relationship, as well as legal and financial terms, in their contract.

Common terms included in a premarital agreement

Personal requirements, assets, and property, as well as the level of detail desired in a prenuptial agreement, all have a role in what is included in the contract. Even though prenuptial agreements may vary widely from marriage to couple, the following provisions are often included:

Children from a previous relationship

If one of the parties had children from a prior relationship, a prenup should include instructions on how the children will be cared for and how their property relations and inheritances will be handled, if applicable.

Family Property

You may secure your family's heirlooms or business by including this as part of the prenuptial agreement so that it will be passed down through the generations.

Marital assets and debts

As a general rule, most governments recognize community property which means any property, existing and future debts acquired during a marriage as held by both spouses. Your prenuptial agreement, on the other hand, may allow you to keep some of the marital property assets and debts you intend to accumulate separately. The prenuptial agreement may state that if one spouse chooses to return to school and accrue student debts after the marriage, the debt is solely that spouse's burden.

Marital Responsibilities

In certain cases, prenuptial agreements may establish the couple's expectations for their marriage. It's safe to assume that these expectations are based on finances. Here are a few instances:

• Who is liable for making certain payments?
• How to submit tax returns in the future?
• Bank accounts and how they will be handled
• How the investments will be managed?
• Arrangements for large-scale acquisitions

Premarital assets and debts:

Prior to engaging in a marriage, each party's assets and liabilities must be disclosed, as well as the terms under which those assets and liabilities will be handled after the nuptials. You can also discuss here if you would like to co-own a home if one of you already had one before the wedding.

Property division in a divorce

In the case of a divorce, one of the most important terms of a prenuptial agreement is how the property would be divided. This avoids a lengthy and emotionally fraught legal procedure after the breakup of the partnership has already happened.

As stated in Article 75 of the Family Code of the Philippines, or Executive Order No. 209, a prenuptial agreement may include the following conditions:

• Absolute community system
• Conjugal partnership of gains
• Complete separation of property
• Any other regime or system that is not contrary to law

How to create a prenuptial agreement?

Prenuptial agreements are usually done in the presence of a lawyer or a legal counsel; however, couples may quickly prepare a draft of their prenup agreement to ease the procedure. If you want to safeguard all of your assets, you may create a comprehensive list of them before the wedding and include it in a prenuptial agreement that covers all of your assets. There must be legal validity to a prenuptial agreement before it may be enforceable in the Philippines that is why it must be notarized by administrative authorities mandated by state and federal laws and attorneys in a law firm with notarial commissions.

The process of drafting and submitting a prenup to the local Civil Registry in the Philippines is straightforward if you are acquainted with the procedure of the premarital agreement. You may use this general step-by-step procedure to have your own prenuptial agreement registered in the Philippines:

Step 1. Have a discussion with your future wife or future husband about the prenuptial agreement and any future terms you may want to add to it about your financial rights and property owned.

Step 2. An experienced contract law attorney can provide you peace of mind knowing that your prenuptial agreement is possible to enforce in the courts. In rare situations, couples may hire separate attorneys to evaluate and represent each other when the prenuptial agreement is being drafted for a more efficient attorney-client relationship.

Step 3. The prenuptial agreement or legal contracts should be signed by the parties with two witnesses.

Step 4. Make sure the prenuptial agreement is notarized and recorded with the Civil Registry and the Registry of Deeds in your local area.

How much does a prenuptial contract costs?

Prenuptial agreements in the Philippines are subject to registration costs of up to Php 2,000 in addition to the legal expenses.

Since real estate properties are included in your prenuptial, it is safer for a married couple if you already have a space you call your own before signing the marriage contract. You can easily include the terms for your property acquired during the prenup and have it utilized on your own accord.

In the event that you don't intend to live there, renting it out might provide you with some extra cash flow. Even if it's not considered matrimonial property, this might be an additional source of income for you and your spouse.

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