Family Code Rules, Liquidation Process, and Common Real-World Scenarios

1) What “conjugal property” means in Philippine law

In everyday use, “conjugal property” usually refers to property owned by spouses as a result of marriage and shared under the applicable property regime. Legally, however, the Philippines recognizes different regimes, and what counts as “conjugal” depends on which regime governs:

Absolute Community of Property (ACP) – the usual/default regime under the Family Code for marriages on or after August 3, 1988, unless the spouses executed a valid marriage settlement (prenup).
Conjugal Partnership of Gains (CPG) – generally the regime under the Civil Code for marriages before August 3, 1988, unless a different settlement applies.
Complete Separation of Property – only if agreed in a marriage settlement or ordered by a court in specific cases.
Unions without a valid marriage – not “conjugal” in the strict sense; special rules apply under Family Code Articles 147 and 148.

So, “distribution of conjugal property” is really about identifying the regime, then liquidating it correctly when the marriage ends or the regime is dissolved.

2) Identify the governing property regime (this decides everything)

A. Absolute Community of Property (ACP) — Family Code, default for many modern marriages

When it applies:

Marriage on or after Aug. 3, 1988, and no prenup (or prenup invalid/void).

Core idea:

Almost everything owned by either spouse before the marriage and acquired during the marriage becomes community property, subject to important exclusions.

B. Conjugal Partnership of Gains (CPG) — often for older marriages

When it applies:

Commonly for marriages before Aug. 3, 1988, absent a prenup. (There are nuances; the safest practical approach is to verify the marriage date and any settlement.)

Core idea:

Each spouse keeps ownership of their exclusive properties, but the “gains” (and many acquisitions during marriage) form the conjugal partnership to be shared after liquidation.

C. Separation of property

When it applies:

Only by a marriage settlement or court order. Core idea:
Each spouse owns and manages their own property; there is generally no “conjugal pool” to divide (though co-ownership can still occur if they buy property together).

D. No valid marriage (void marriage, or cohabitation without marriage)

Not governed by ACP/CPG; instead:

Article 147: parties capacitated to marry but marriage is void (e.g., no license in certain cases) or they live together as husband and wife; properties acquired through work/industry are generally co-owned in equal shares (presumption of equal contribution, subject to proof).
Article 148: parties not capacitated to marry (e.g., one/both married to others); only properties acquired through actual joint contribution are co-owned in proportion to contribution; no presumption of equal shares.

3) What gets included and excluded (ACP vs CPG)

A. Under ACP: What belongs to the community?

Included (general rule)

Property owned by either spouse before marriage (yes, generally included in ACP), and
Property acquired by either or both spouses during marriage, whether by work, business, purchases, etc.

Excluded from ACP (common exclusions)

Typically excluded are:

Gratuitous acquisitions during marriage (inheritance, devises, donations), and the fruits/income of those, depending on the specific rule and terms of the donation/inheritance.
Property for personal and exclusive use of a spouse (with exceptions; e.g., jewelry is often treated differently in practice).
Property acquired before marriage by a spouse who has legitimate descendants by a former marriage (a commonly discussed exception in ACP contexts).
Property excluded by marriage settlement.

Practical takeaway: ACP is broad; if you are arguing something is excluded, be ready to prove the exclusion and the source (inheritance documents, deed of donation, etc.).

B. Under CPG: What belongs to the conjugal partnership?

Exclusive property of each spouse (often includes)

Property owned before marriage
Property acquired during marriage by gratuitous title (inheritance/donation)
Property acquired during marriage using exclusive funds, subject to tracing and reimbursement rules
Property for exclusive personal use (with typical caveats)

Conjugal property (often includes)

Properties acquired for consideration during marriage (purchases, acquisitions through business)
Income/fruits of exclusive properties (rentals, dividends, harvest, interest), and income from labor/profession during marriage
Net gains from business or industry during marriage

Practical takeaway: Under CPG, the pool is often: “what we earned and acquired during marriage,” plus fruits/income, minus obligations and reimbursements.

4) When “distribution” happens: dissolution events that trigger liquidation

Property division typically occurs after liquidation upon:

Death of a spouse (community/conjugal property becomes part of settlement proceedings; heirs’ shares come in).
Legal separation (marriage subsists but property regime is dissolved; there are special penalty rules against the guilty spouse).
Annulment (voidable marriage) or Declaration of Nullity (void marriage) – property consequences differ depending on good faith and applicable articles.
Judicial separation of property or agreement approved by the court in limited cases.
Separation in fact does not automatically dissolve ACP/CPG, but it often leads to disputes, protection orders, receivership, and later liquidation when a proper case is filed.

5) The liquidation framework: the correct order of steps (why “50–50” is not step one)

A frequent mistake is jumping straight to “divide everything equally.” Philippine law generally expects a sequence:

Inventory of all assets and liabilities
Determine which regime applies and classify each asset: community/conjugal vs exclusive
Pay obligations chargeable to the community/conjugal partnership
Reimburse what must be reimbursed between spouses (and between exclusive and common funds)
Compute the net remainder
Divide the net remainder according to the regime and the specific cause (death, legal separation, nullity, etc.)
Deliver presumptive legitimes / shares where required (especially when the marriage is declared void/null and children’s shares are protected)

A. ACP liquidation (typical structure)

Make an inventory
Pay community obligations (debts incurred for family benefit, support, expenses of administration, etc.)
Reimburse to a spouse what the community owes (e.g., if exclusive funds were used to improve community property or vice versa—depending on proof and rules)
The net remainder is generally divided equally between spouses, subject to special rules (e.g., legal separation penalties, succession rules when a spouse dies)

B. CPG liquidation (typical structure)

Return each spouse’s exclusive properties
Pay conjugal obligations
Reimburse and settle accounts (e.g., if conjugal funds improved exclusive property or exclusive funds improved conjugal property)
Divide the net conjugal partnership gains generally equally, subject to adjustments where legally required

6) Common scenarios (with the rules that usually decide them)

Scenario 1: “We married with no prenup in 2015. Is everything 50–50?”

Likely ACP (default under the Family Code).
Many assets—possibly including assets brought into the marriage—may be community unless clearly excluded (inheritance/donation/personal items, etc.).
Distribution is not simply “split assets”; it’s liquidate debts first, then split net.

Scenario 2: “He inherited land during the marriage. Do I get half?”

Inheritance is typically exclusive (not part of the pool).
But beware of improvements, income/fruits, and mixed funding:
- If community/conjugal funds paid taxes, built a house, or developed the land, there may be reimbursement claims or co-ownership implications depending on tracing and governing articles.

Scenario 3: “Property is titled in his name only—so it’s his, right?”

Not necessarily.

Title is evidence, not always ownership classification under the regime.
A property acquired during marriage for consideration is often presumed to belong to the community/conjugal partnership unless proven otherwise.

Scenario 4: “We bought a house on installment. Some payments were before marriage, the rest during.”

This is one of the most litigated fact patterns.

The classification can depend on:
- When ownership legally transferred (deed of sale timing)
- Source of funds for down payment and installments
- Whether the property is considered acquired during marriage and to what extent payments were from community/conjugal funds
Often, the result involves reimbursement/accounting, not a simplistic label.

Scenario 5: “My spouse had a business before marriage; it grew during marriage.”

CPG: growth/profits during marriage are often part of conjugal gains; the underlying business may remain exclusive but income can be conjugal.
ACP: the analysis may pull more into the community unless excluded; still, the business’ pre-marriage character, capitalization, and proof matter.
Expect issues like: valuation date, retained earnings, goodwill, and whether funds were commingled.

Scenario 6: “We’re separated for 10 years. Do we still share property acquired after separation?”

Separation in fact does not automatically dissolve ACP/CPG.
But there are legal tools (judicial separation of property, protection orders, receivership, and ultimately a proper case) that can address post-separation acquisitions and prevent dissipation.
Courts often look closely at whether acquisitions were funded by the community/conjugal partnership, and whether bad faith or abandonment occurred.

Scenario 7: “There are debts—who pays?”

Debts are not automatically “his” or “hers.”

The key question is whether the debt is chargeable to the community/conjugal partnership (e.g., for family support, household expenses, education, property preservation) or is a personal obligation (e.g., gambling, affairs, purely personal ventures with no family benefit—fact-specific).
Creditors, however, may pursue property based on the law on obligations and property regime rules; internal allocation between spouses may differ from creditor rights.

Scenario 8: “He sold community property without my consent.”

Under ACP/CPG, there are consent requirements and consequences.

Disposition of certain property without the required consent can be void/voidable and can create reimbursement/liability issues.
Remedies often require timely action and proof of lack of authority/consent and prejudice.

Scenario 9: “We have a void marriage. What happens to property?”

This is where many people get blindsided:

If the marriage is declared void, ACP/CPG may not apply the same way; property relations may be governed by Articles 147 or 148 depending on capacity to marry and good/bad faith.
Courts prioritize protection of children and proper partition based on contribution and good faith rules.

Scenario 10: “One spouse is at fault in legal separation—does that change the split?”

Yes.

In legal separation, the guilty spouse can forfeit their share in the net profits (and other consequences apply). Distribution can deviate sharply from equal division.

7) Reimbursement and “right of return” concepts (often the real battleground)

Even when an asset is clearly classified, the money trail can create claims:

Common reimbursement issues:

Exclusive funds used to acquire/improve community/conjugal property
Community/conjugal funds used to acquire/improve exclusive property
Payment of exclusive debts using community/conjugal funds
Improvements that increase value vs necessary expenses (courts can treat these differently depending on proof and applicable provisions)

Practical proof tips:

Bank records, remittance slips, loan documents, construction contracts, tax declarations, receipts, and credible witness testimony matter.
If you can’t trace funds, courts may treat commingled funds as common.

8) Children, heirs, and death: distribution is not just “spouse vs spouse”

When a spouse dies:

The community/conjugal partnership is liquidated first to determine:
- the surviving spouse’s share (their half of net, typically), and
- the decedent’s share (which goes into the estate)
Then succession law determines how the decedent’s estate is divided among heirs (legitimate children, surviving spouse, etc.).

Key point: Many families mistakenly divide “everything” among heirs without first separating what belongs to the surviving spouse by virtue of the property regime.

9) How cases are usually handled (and why courts matter)

In contentious cases, proper liquidation/distribution is typically done through:

Settlement of estate proceedings (death)
Legal separation case (with property liquidation orders)
Annulment/nullity proceedings with liquidation/partition directives
Partition cases when co-ownership exists (including under Articles 147/148)

Courts frequently require:

Inventory and accounting
Proof of classification and contribution
Protection against disposal (injunctions, lis pendens, etc., when proper)

10) A practical, step-by-step checklist for spouses planning to divide property

Step 1: Confirm your regime

Marriage date
Prenup/marriage settlement (if any)
Any court orders on separation of property

Step 2: Build an asset list (inventory)

Real properties (titles, tax declarations, deeds)
Vehicles (OR/CR)
Bank accounts, investments
Businesses, shares, partnerships
Retirement benefits (fact-specific)
Insurance policies (beneficiary designations matter)
Personal properties of significant value

Step 3: Build a liabilities list

Mortgages, personal loans, credit cards
Business loans
Taxes and arrears
Obligations to children (support, tuition arrears)

Step 4: Classify each item

Exclusive vs community/conjugal
Identify inherited/donated property and conditions
Trace funding sources (exclusive vs common)

Step 5: Compute reimbursements

Who paid what, from what funds, when

Step 6: Net it out

Pay chargeable obligations
Apply reimbursements
Divide net remainder under the applicable rules

Step 7: Implement legally

Deeds of partition / extrajudicial settlement (where appropriate and lawful)
Update titles, register transfers, pay applicable taxes/fees
Consider court approval where required or where rights of minors/heirs are involved

11) Frequently asked questions (quick answers)

Is it always 50–50? Often the net remainder ends up split equally under ACP/CPG, but only after debts and reimbursements—and not in all causes (e.g., legal separation penalties, void marriage rules, contribution-based co-ownership).

If I’m a homemaker, do I still have a share? Yes. Household management and care work are recognized as valuable contributions under Philippine family law principles; regimes don’t require equal cash contribution for equal sharing in ACP/CPG.

What if the property is abroad? Jurisdiction, enforcement, and conflict-of-laws issues arise. Philippine courts can decide marital property rights, but enforcing against foreign-located assets may require proceedings abroad.

Can we just sign an agreement to divide everything? Spouses can compromise in many situations, but enforceability depends on context (pending cases, rights of children/heirs, legality of the terms, required court approvals, and proper formalities for real property transfers).

What if one spouse hid assets? Asset concealment is addressed through discovery, accounting, and sometimes criminal/civil remedies depending on the conduct. Practically, paper trails and third-party records become critical.

12) Key takeaways

“Conjugal property” depends on the property regime: ACP, CPG, separation, or Article 147/148 co-ownership.
Proper distribution requires liquidation: inventory → classify → pay debts → reimburse → divide net.
Inheritance/donation, business income, installment purchases, and commingled funds are the most common dispute zones.
When death is involved, always separate the surviving spouse’s regime share before distributing the estate to heirs.
For void marriages or non-marital unions, Articles 147/148 can dramatically change outcomes (equal shares vs contribution-based shares).

This article is for general legal information in the Philippine context and is not a substitute for advice on a specific case. If you want, describe your exact fact pattern (marriage date, whether there’s a prenup, how/when each major asset was acquired, and what debts exist), and I can map the likely classification and liquidation steps.