Spousal and Children's Shares in Inherited Properties under Pre-Family Code Marriages in the Philippines

Introduction

In the Philippine legal system, the treatment of inherited properties in the context of marriage and succession is governed by a combination of civil law principles derived from the Civil Code of the Philippines (Republic Act No. 386, enacted in 1950) and subsequent amendments, including those introduced by the Family Code of the Philippines (Executive Order No. 209, effective August 3, 1988). For marriages solemnized before the effectivity of the Family Code—specifically, those entered into prior to August 3, 1988—the default property regime is the Conjugal Partnership of Gains (CPG), as provided under the old Civil Code. This regime distinguishes between exclusive (separate) properties and conjugal properties, with inherited properties typically falling under the exclusive category.

The topic of spousal and children's shares in inherited properties becomes particularly relevant upon the dissolution of the marriage, such as through death, annulment, or legal separation. Inherited properties, being exclusive to the spouse who received them, are not part of the conjugal pool for division between spouses during the marriage. However, upon the death of the property-owning spouse (the decedent), these properties form part of the decedent's estate and are subject to succession rules, where the surviving spouse and children have specific shares under the laws on legitime (forced heirship) and intestate succession. This article explores the intricacies of these shares, drawing from relevant provisions of the Civil Code, judicial interpretations, and practical applications in the Philippine context.

Property Regimes in Pre-Family Code Marriages

To understand the shares in inherited properties, it is essential to first delineate the property regime applicable to pre-1988 marriages. Under Article 119 of the old Civil Code (now repealed but applicable to such marriages), the default regime is the Conjugal Partnership of Gains. In this system:

Exclusive Properties: These belong solely to one spouse and include:
- Properties brought into the marriage as one's own (e.g., those owned before marriage).
- Properties acquired during the marriage by gratuitous title, such as through inheritance, donation, or legacy (Article 113, Civil Code).
- Properties purchased with exclusive funds.
- Fruits or income from exclusive properties, unless they are commingled or used for conjugal purposes (with nuances in jurisprudence).
Conjugal Properties: These are assets acquired onerously during the marriage, such as through labor, industry, or chance (e.g., salaries, winnings), and include fruits from conjugal properties.

Inherited properties are explicitly classified as exclusive under Article 113(2) of the Civil Code: "Property acquired by either spouse during the marriage by gratuitous title." This means that if a spouse inherits land, cash, or other assets from a parent or relative during the marriage, these remain the sole property of that spouse and are not shared with the other spouse during the lifetime of the marriage.

However, complications arise with the administration and fruits of these properties. For instance, if inherited property produces income (e.g., rental from inherited land), such income may become conjugal if used for family expenses or if not segregated (Article 121, Civil Code). Supreme Court decisions, such as in Joaquin v. Court of Appeals (G.R. No. 118803, 1997), have clarified that while the corpus (principal) of inherited property remains exclusive, its fruits can be conjugal unless proven otherwise.

For marriages before 1988, couples could opt out of CPG via a marriage settlement (prenuptial agreement) for regimes like complete separation of property or absolute community, but CPG was the norm absent such agreement.

Treatment of Inherited Properties Upon Dissolution of Marriage

The dissolution of a pre-Family Code marriage triggers the liquidation of the conjugal partnership, but inherited properties, being exclusive, are treated separately:

In Case of Annulment or Legal Separation: Under Articles 147-148 of the Civil Code (pre-Family Code application), the conjugal properties are divided equally between spouses after deducting debts. Exclusive properties, including inheritances, remain with the owning spouse and are not divided. Children have no direct claim on these properties during the parents' lifetime unless through support or advancement.
In Case of Death: This is where spousal and children's shares become most pronounced. Upon the death of a spouse, the CPG is terminated (Article 175, Civil Code), and the process involves:
1. Inventory of all properties.
2. Separation of exclusive properties of each spouse.
3. Liquidation of conjugal properties: Debts are paid, then the net conjugal assets are divided equally, with half going to the surviving spouse and half to the decedent's estate.
4. The decedent's estate—comprising their exclusive properties (including inheritances) plus their half of the conjugal properties—is then subject to succession.

Inherited properties of the decedent thus enter the estate and are distributed according to testamentary or intestate rules, ensuring the legitime of heirs.

Succession Rules and Legitime

Philippine succession law emphasizes forced heirship, where certain heirs (compulsory heirs) are entitled to a legitime—a portion of the estate that cannot be freely disposed of by will (Articles 886-914, Civil Code). For pre-Family Code marriages, these rules apply without distinction, as the Family Code did not substantially alter succession provisions but rather family relations and property regimes.

Compulsory heirs include:

Legitimate children and descendants.
In their absence, legitimate parents and ascendants.
The surviving spouse.
Illegitimate children (with reduced shares).

Legitime of Children

Legitimate Children: The legitime is one-half (1/2) of the estate, divided equally among them (Article 888). If there are multiple children, each gets an equal share of this half. Descendants inherit by representation if a child predeceases.
Illegitimate Children: Their legitime is one-half (1/2) of that of a legitimate child (Article 895). For example, if there is one legitimate child and one illegitimate, the legitime portion adjusts accordingly.
The remaining half (free portion) can be disposed of by will, but if it encroaches on legitime, it is reduced.

Inherited properties form part of the estate's computation for legitime. For instance, if the decedent inherited a parcel of land valued at PHP 10 million, and the total estate is PHP 20 million, the children's legitime is based on the full PHP 20 million.

Legitime of the Surviving Spouse

The surviving spouse's legitime varies based on other heirs:

If there are legitimate children: The spouse's legitime is a share equal to that of one legitimate child, taken from the free portion (Article 892). For example, with two children, the legitime half is divided into three equal parts (two for children, one for spouse, but adjusted to fit within the free portion if necessary).
If no children but legitimate ascendants: The spouse gets one-third (1/3) of the estate (Article 893).
If alone: The spouse gets one-half (1/2) (Article 900).
With illegitimate children: The spouse's share is one-fourth (1/4) if concurring with them (Article 894).

Importantly, the spouse's share in inherited properties is not as an "owner" during the marriage but as an heir upon death. However, the spouse may have usufruct (right to use) over certain properties under Article 891.

Intestate Succession: Shares When There Is No Will

If the decedent dies without a will, intestate succession applies (Articles 960-1014, Civil Code), and shares in the entire estate (including inherited properties) are as follows:

With Legitimate Children: The estate is divided equally among the children and the surviving spouse, with the spouse receiving a share equal to one child (Article 996). E.g., With three children, the estate is divided into four equal parts: three for children, one for spouse.
With Illegitimate Children Only: Illegitimate children get one-half (1/2) total, divided equally; spouse gets one-half (1/2) (Article 998).
With Legitimate Ascendants (No Children): Ascendants get one-half (1/2); spouse gets one-half (1/2) (Article 997).
Spouse Alone: Entire estate to spouse (Article 995).
Representation applies for descendants, but not ascendants.

Inherited properties are included without segregation; they are part of the mass estate distributed per these shares.

Special Considerations and Judicial Interpretations

Collation: Under Article 1061, advancements or donations to children during the decedent's lifetime (including from inherited properties) must be collated (brought back fictitiously) to compute legitime, ensuring equality.
Usufruct Rights: The surviving spouse often has legal usufruct over one-third of the estate if there are children (Article 891), allowing use of inherited properties without ownership transfer.
Reserve Troncal: A unique rule under Article 891 (reserve troncal) applies to properties inherited from an ascendant that passed through a descendant. If the descendant dies, the property reverts to the ascendant's relatives within three degrees, limiting free disposition. This affects children's shares if applicable.
Jurisprudence: In De la Puerta v. Court of Appeals (G.R. No. 77867, 1990), the Court emphasized that inherited properties remain exclusive, but upon death, they are fully subject to legitime. In Vitug v. Court of Appeals (G.R. No. 82027, 1990), it was ruled that the surviving spouse's share includes rights over exclusive properties via succession.
Tax Implications: Inherited properties in the estate are subject to estate tax (under the Tax Code), with deductions for spousal share (up to PHP 10 million deduction under TRAIN Law, as amended).
Illegitimate Children and Spouse: Pre-Family Code, illegitimate children's rights were recognized but with proof of filiation (Article 887). The spouse's share could be contested if adultery or abandonment is proven, potentially disqualifying them (Article 963).

Practical Applications and Examples

Consider a scenario: A husband in a pre-1988 marriage inherits a house from his father. This house is his exclusive property. Upon his death, with a wife and two legitimate children, and total estate (including the house) valued at PHP 30 million:

Legitime: PHP 15 million divided equally among two children (PHP 7.5 million each).
Free portion: PHP 15 million, from which the wife's share (equal to one child, PHP 7.5 million) is taken.
The house, if specifically inherited, may be partitioned or sold to satisfy shares.

If intestate: Estate divided into three equal parts (PHP 10 million each: two children, one wife).

In cases of multiple heirs, partition agreements or judicial partition (Articles 496-501, Civil Code) may be needed for physical division of inherited real properties.

Conclusion

Under pre-Family Code marriages in the Philippines, inherited properties maintain their exclusive character during the marriage but become integral to the estate upon death, subject to the rigid rules of legitime and intestate succession. Children, as primary compulsory heirs, are entitled to the bulk of the protected shares, while the surviving spouse's portion ensures support without overriding filial rights. These provisions balance family protection with property autonomy, reflecting Spanish civil law influences. Parties are advised to consult legal professionals for specific cases, as nuances like wills, debts, or prior donations can alter outcomes.