Taxation 2 │GROSS ESTATEProperty Relations Between Spouses

FLABERT VILLASENCIO, CPANotre Dame of Dadiangas University

Learning Objectives

▪ Identify Property Relations between Spouses

▪Determine the difference between regimes

▪Determine the value of gross estate of spouses in different regimes.

System of Property Relationship

▪Absolute Community of Property▪Conjugal Partnership of Gains▪Complete Separation of Property▪Any other Regime

Absolute Community of Property

oWhere marriage happened AFTER August 3, 1988.oConsists of all the property owned by the spouses at the time of celebration of marriage and all acquired thereafter.

EXCLUDED from Communal PropertyoProperty acquired during marriage by gratuitous title and its fruits.

Absolute Community of Property

EXCLUDED from Communal Property

▪Property use for personal and exclusive use. (Jewelry is a communal property)

Absolute Community of Property

EXCLUDED from Communal Property

▪Properties acquired before the marriage who has legitimate descendants by a former marriage.

Absolute Community of Property

Donation of Community Property by either SpouseoEither Spouse may dispose by will his/her interestoNeither may donate without the consent of the otheroEither may donate in moderation without consent for charity or on occasions of family rejoicing and distress.

Absolute Community of Property

Conjugal Properties

oWhere marriage happened BEFORE August 3, 1988.oConsists of all properties acquired during the marriage.

oThose acquired by onerous title during marriage at the expense of common fund.

Conjugal Properties

▪Obtained from labor, industry, work of profession of either or both of the spouses.

Example:

Salaries, income from business.

Conjugal Properties

oFruits during marriage from exclusive properties.oShare of either spouse from hidden treasure.oThose acquired through occupation.oLivestock incomeoThose acquired by chance

Conjugal Properties

EXCLUDED to Conjugal PropertyoThat which is brought to marriage as her own.oThat which each acquires during the marriage by gratuitous title.oThat which is acquired by right of redemption.oThat which is purchased out of the exclusive money of either spouse.

Conjugal Properties

oBoth spouses shall bear family expenses in proportion to their income, in case of insufficiency, to the current market value of their separate propertiesoTo each spouse shall belong all earnings and fruits due or received during the marriageoLiabilities to creditors for family expenses shall be solidary.

Complete Separation of Property

Live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage

oEqual share

oProperties are under co-ownership (even in the absence of proof)

oA party who did not participate in the acquisition is deemed to have contributed jointly if his efforts are consisted in the care and maintenance of the family and the household

oNeither party can dispose without the consent of the other until the termination of cohabitation

Property Regime of Unions Without Marriage

1. Suffer from legal impediments

2. Not exclusively living with each other

oCommon ownership is limited to those which they have acquired through actual joint contributionoIn the absence of proof, shares are equal

Property Regime in Cohabitation of Spouses (Incapacitated to Marry)

Summary Table

A. No Agreement on Marriage SettlementDate of Marriage Regime

BEFORE Aug.3,1988 Conjugal partnership of Gains

ON or AFTER Aug.3,1988

Absolute Community of Property

Summary Table

B. Acquisition by Gratuitous Title (Donation/Inheritance)

Regime Before Marriage During Marriage

1. Conjugal partnership

a. Principal Exclusive Exclusive

b. Fruits Conjugal Conjugal

2. Absolute Community

a. Principal Community Exclusive

b. Fruits Community Exclusive

Summary Table

C. Properties brought into/acquired during the marriage

Regime Before Marriage During Marriage

1. Conjugal partnership

a. Principal Exclusive Conjugal

b. Fruits Conjugal Conjugal

2. Absolute Community

a. Principal Community Community

b. Fruits Community Community