Relative Community of Property in the Philippines: Definition, Coverage, and Effects

Executive Summary

“Relative community of property” (often called limited or partial community) is a contractual property regime that future spouses may create through a marriage settlement (prenuptial agreement) under Philippine law. Unlike the default absolute community of property (ACP)—which generally pools almost everything the spouses own and acquire—the relative community regime only pools what the spouses specifically identify, leaving all other assets as each spouse’s exclusive property. It is perfectly valid so long as it does not violate mandatory rules of the Family Code (e.g., the prohibition on donations between spouses), public policy, or the legitimes of compulsory heirs.

1) Legal Basis and Character

Source of the regime. The Family Code allows future spouses to agree on absolute community, conjugal partnership of gains, complete separation, “or any other regime.” “Relative community” sits in that “any other” bucket. It is a creature of contract, not a named statutory regime like ACP or CPG.
Form and timing. The settlement must be in writing, signed, and executed before the marriage. To bind third persons, it should be acknowledged (notarized) and recorded in the local civil registry and, where appropriate, in the registry of deeds covering real property.
Immutability during marriage. As a rule, the spouses cannot modify their property regime after the wedding except in cases permitted by law (e.g., judicial approval of separation of property for valid causes).
Suppletory rules. Because the relative community is contractual, its text governs. Where it is silent, courts look to analogous Family Code provisions (primarily the rules on ACP/CPG) and co-ownership principles in the Civil Code.

2) Concept and Design Options

Definition. A relative community of property is a limited pool comprising only the properties or classes of properties explicitly designated by the spouses as community property. Everything else is exclusive (also called paraphernal or capital property).

Common patterns the parties adopt:

Asset-based pooling. “Only the family residence and the business we operate together are community property.”
Acquisition-based pooling. “All properties acquired for consideration during the marriage are community, except professional tools, personal effects, and inheritances.”
Income-based pooling. “The fruits, rents, and income of our exclusive properties are community, but the underlying properties remain exclusive.”
Hybrid rules. Any combination of the above, with tailored exclusions (e.g., stock options, IP royalties, or heirlooms).

Good drafting practices:

Define the “community mass” clearly (by class, date, or asset list).
List exclusions (gratuitous acquisitions, personal and professional effects, properties for exclusive personal use, damages for moral injuries, etc.).
State treatment of fruits/income and accessions (e.g., dividends, rent, natural increase).
Lay down administration rules (who manages, consent thresholds, dispute breakers).
Address credit and risk allocation (what debts charge the community vs. exclusive assets).
Provide a liquidation formula (equal shares by default, or proportional to contributions, or as otherwise agreed if not unlawful).

3) Coverage: What Goes In, What Stays Out

Because the regime is contractual, coverage follows the settlement. In practice, drafters borrow logic from ACP/CPG to avoid gaps.

Typically Community (if the settlement says so)

Properties acquired for value during the marriage and intended for family use or joint enterprise.
Fruits and income of designated community assets (e.g., rent from the family condo, dividends from community shares).
Transformations/substitutions of community assets (e.g., sale proceeds used to buy another asset).
Insurance indemnities replacing a community asset (e.g., fire insurance payout for community home).

Typically Exclusive

Properties brought into the marriage that are not expressly pooled.
Gratuitous acquisitions during the marriage (inheritance, legacy, donations) if not pooled and especially where the donor/testator expressly conditions exclusivity.
Personal and professional items (clothes, tools of trade), damages for personal injuries, and property acquired with exclusive funds if traceable.
Property expressly excluded by the settlement.

Tip: State a tracing rule: where exclusive and community funds mingle, specify how to allocate (e.g., proportionate co-ownership; exclusive if majority exclusive funds; or a presumption one way or the other).

4) Administration, Disposition, and Consent

Day-to-day administration. The settlement may grant joint administration or primary administration to one spouse, subject to fiduciary standards. Many adopt ACP-style defaults: either spouse may administer, but acts of disposition/encumbrance over community property require the written consent of the other or court authority; without it, the act is void as to the non-consenting spouse.
Exclusive property. Each spouse freely administers exclusive property, subject to the settlement (e.g., pooling of income) and the family’s right to support.
Disagreement rule. Provide a tie-breaker (e.g., court petition or independent administrator) to avoid paralysis when spouses disagree on major acts.

5) Charges and Liabilities

Spouses may tailor liability rules, but the following public-policy anchors (drawn from ACP/CPG and family-support rules) are expected to apply at minimum:

Chargeable to the community mass (ahead of net sharing):

Support for the family and necessary household expenses.
Debts and obligations incurred by either spouse in the interest of the family or the community business.
Taxes, assessments, and repairs relating to community assets.
Expenses for acquisition/preservation of community property.
Ante-nuptial debts may be charged to the community to the extent they redounded to family benefit.

Chargeable to exclusive property:

Debts not incurred for the family or the community and obligations clearly personal to a spouse.
Fines and penalties arising from that spouse’s crime or administrative violations (without prejudice to the community where it benefited).

Reimbursements. If exclusive funds pay a community liability (or vice-versa), the paying mass is reimbursed during liquidation, typically without interest, unless the settlement states otherwise.

6) Donations, Intra-Spousal Transfers, and the Family Home

Donations between spouses are prohibited during marriage (save for moderate gifts on family occasions). A relative community cannot be used to do indirectly what the law forbids directly.
Donations propter nuptias (in consideration of the marriage) made before the wedding are allowed and should be addressed in the settlement (are they community or exclusive?).
Family home. The family home generally forms part of the community or conjugal property if acquired with community funds, and it enjoys execution immunity subject to statutory exceptions. Many settlements expressly classify the family home and prescribe consent requirements for its encumbrance or sale.

7) Effects During Marriage

Presumption of community/ownership. Within the relative community, you may adopt an equal-shares presumption unless a different ratio is stated. For assets outside the community, title and tracing govern.
Third parties. To protect bona fide buyers and creditors, record the settlement. Acts requiring spousal consent but done without it are generally void; third parties dealing with one spouse should verify spousal consent for community assets.
Professional and business interests. The settlement can classify shares/partnership interests and allocate voting and dividend rights (e.g., dividends to the community; voting remains with the titled spouse subject to fiduciary duties).

8) Dissolution and Liquidation

Triggers:

Death of a spouse.
Declaration of nullity, annulment, or legal separation (after finality and completion of required reconciliations/inventories).
Judicial separation of property (e.g., due to abandonment, prodigality, or mismanagement).
Agreed termination only in cases the law allows (e.g., conversion to separation of property by court approval).

Liquidation roadmap (a practical checklist):

Inventory community assets and liabilities as of the termination date (e.g., date of death; date of finality of the decree).
Set aside exclusive properties of each spouse.
Charge community liabilities (support arrears, taxes, valid debts, reimbursements due to either spouse).
Compute reimbursements between masses (community ↔ exclusive), including improvements and necessary expenses.
Determine the net remainder of the community and divide per the settlement (often 50-50 absent a contrary, lawful stipulation).
Succession overlay if death is involved: only the decedent’s share in the net community enters the estate, then apply legitime rules for compulsory heirs.

For void/voidable marriages. Property relations may default to special co-ownership rules (Articles 147–148 Family Code), not to the agreed regime. A “relative community” clause will not rescue a union the law deems void.

9) Tax and Compliance Touchpoints (Practical)

Capital gains/Documentary stamp may arise on dispositions of real property classified as community.
Donor’s tax is generally not a workaround for banned inter-spousal donations; transfers violating the prohibition are void, tax aside.
Estate tax computations follow after liquidation of the community (only the decedent’s net share goes into the gross estate).
Registration hygiene:
- Record the settlement in the local civil registry and registry of deeds (for realty).
- For shares or IP, update the corporate books or IP registries if the settlement assigns or pools rights.

10) Sample Clause Ideas (for orientation only)

Community Definition. “The community shall consist of (a) the family residence at ___; (b) all properties acquired for value during the marriage except properties acquired by gratuitous title, personal and professional effects, and replacements thereof purchased with exclusively-owned funds; and (c) the fruits and income of the foregoing. All other properties are exclusive.”

Administration & Consent. “Either spouse may perform acts of ordinary administration of community property. Disposition or encumbrance of any community real property, or of community personal property exceeding ₱___ in value, shall require the written consent of the other spouse or judicial authorization.”

Debts & Reimbursements. “Obligations incurred by either spouse for the benefit of the family or the community business shall be chargeable to the community. Payments made by one spouse’s exclusive funds for community obligations shall be reimbursed upon liquidation, without interest.”

Liquidation. “Upon termination, the parties shall (i) inventory and settle community liabilities; (ii) restore reimbursements between masses; and (iii) divide the net community equally.”

(These are high-level illustrations; formal drafting requires counsel.)

11) Advantages, Risks, and When to Use

Pros

Customization. Tailors the property pool to the couple’s actual economic plan.
Asset protection. Keeps sensitive or family-line assets outside the marital pool.
Clarity for lenders/investors. If recorded, third parties understand who must consent.

Cons / Risks

Drafting pitfalls. Vague definitions invite disputes (what counts as “business asset”?).
Administration friction. Frequent consent requirements can slow transactions.
Public-policy guardrails. Clauses that skirt the donations ban, legitimes, or support obligations will be void or reformed.

Best used when

One spouse has pre-existing substantial assets or a family enterprise to ring-fence.
The couple plans a joint venture and wants only that venture and its growth to be community.
There is a need to predefine creditor exposure and maintain bankability of certain assets.

12) Practical To-Do List Before Marriage

Map your assets (current and anticipated) and tag which will be community.
Decide on income/fruits treatment and tracing rules.
Set administration mechanics (consents, thresholds, dispute resolution).
Set liability hierarchy and reimbursement logic.
Draft the settlement with counsel; notarize and record it.
Align titling and books (real property, corporate shares, bank accounts).
Revisit estate plans to reflect your community/exclusive buckets.

Closing Note

A relative community of property regime offers surgical control over the marital property pool while preserving family-law safeguards. Its effectiveness lives or dies on clear drafting, proper registration, and disciplined administration. For a couple with heterogeneous assets or complex business plans, it can provide the middle ground between “everything in” (ACP) and “nothing in” (complete separation)—with far fewer surprises when life changes or the relationship ends.