Continuing with my previous article, here are additional reasons to sign a prenup agreement. It defines financial rights and limits between spouses. Quite simply, a prenup can clarify the financial rights, responsibilities and limits between spouses — whether either or both spouses are wealthy or not. It also limits issues and costs of a divorce. By providing ahead in a prenuptial agreement who owns or gets what, the couple limits the issues in the event of a divorce, thereby bringing the costs down as well. Finally, it establishes “alimony” and support where Philippine law provides none.
Currently, Philippine law does not provide for alimony for either spouse after a divorce. Until such law is passed, a prenuptial agreement can — and should — very well provide for the alimony of a spouse who may have put career, business and personal advancement behind in the course of raising a family during the marriage.
Additionally, the prenuptial agreement can already establish who provides child support and to what extent such child support can be provided, whether as a specific amount or a percentage of income/assets.
While Philippine law provides for child support, in many instances, even rich “divorced” parents refuse to provide child support, perhaps fearing that the custodial parent will personally use/benefit from such support or thinking that the custodial parent can afford to support his/her child/ren anyway. This is not uncommon, as many can attest to.
And demanding child support and enforcing it is slow, weak and costly. A prenuptial agreement can make this easier for the custodial parent, as its enforcement is a matter of contract rather than a matter of proving the capacity of the giver versus the need of the child.
How to make a valid prenup
• Legal Requirements
Philippine law requires (See Article 77, Family Code of the Philippines) that, in order to be valid, a prenuptial agreement or any modification must be (a) in writing, (b) signed by the parties and (c) executed before the celebration of the marriage.
And in order to bind third persons, the prenuptial agreement must be (d) notarized and (e) registered in the local civil registry where the marriage contract is recorded and (f) registered in the proper registries of property.
The registries refer to the local civil registry of the city or municipality where the wedding was solemnized/celebrated and to each of the registry of deeds where the couple has real and personal properties subject of the prenuptial agreement.
In order to register the prenup with the local civil registry, the couple must provide a copy of the prenup to the person solemnizing the marriage (i.e. the priest or mayor or other solemnizing officer), so that it will be indicated in their records for the issuance of marriage certificate that a prenup was entered into (Article 22, Family Code of the Philippines). It then becomes the duty of the solemnizing authority to furnish a copy of the marriage certificate, with the prenup, to the local Civil Registry (Article 23, Family Code of the Philippines). A copy is also sent to the married couple. To be sure, the couple should then check with the local Civil Registry whether their prenup has been registered.
In some instances, the solemnizing authority does not perform its duty to register the prenup with the local Civil Registry. As such, the couple should carefully inquire with the particular solemnizing authority as to their practice to ensure that the steps for registration are completed.
If the solemnizing authority does not register the prenup, the couple should submit four copies of their prenup to the local Civil Registry. The period typically required by the local Civil Registry to register the prenup is 15 calendar days from the wedding.
For the registry of deeds, the prenup is annotated on each of the titles to the real property subject of the prenup. The prenup is likewise annotated on the Book of Personality of the appropriate Registry of Deeds where personal property is located. For instance, a prenup that covers stock certificates should be registered in the Registry of Deeds of the locality where the corporation has its office, as indicated in its Articles of Incorporation; whereas, for bank accounts, it would be in the locality where the bank account is opened.
Notably, one could also register the prenup in the corporate records with the Securities and Exchange Commission where the prenup covers stock certificates. Although it is not required by law for the validity of the prenup, the additional step could further protect the concerned spouse.
Since the prenuptial agreement needs to be registered in the local civil registry and registry of deeds to bind third persons, it automatically follows that the prenuptial agreement needs to be notarized by a duly commissioned notary public; otherwise, it would not be accepted for registration by the local civil registry nor by the registry of deeds. Also, Article 1358 of the Civil Code of the Philippines requires that contracts which affect real rights over immovable properties need to be in a public document (i.e. notarized).
To be continued