Indeed, you heard right. This is the “saving grace” for many foreigner/Filipino couples who want to buy property together here in the Philippines and have an assurance that the “foreigner ‘ half of the couple can continue living in the couple’s property.
Notice something important that I didn’t say above, though. I didn’t call it the couple’s “joint” property. Foreigners to think they have a lot more share in their marital property than they actually do.
In the US, for example, it’s very common for a married couple to own property in “joint tenancy” or as “tenants in common”, typically with “right of survivorship”. Loosely translated from legal-eze to English
(remember I am a lay person and not a lawyer, if you think any of this applies to you directly, I urge you to seek competent advice, this article if for general information and designed to provoke thought, not provide answers)
this means that should either spouse die while the other survives, then the dying partner’s share transfers almost automatically to the survivor, who then owns 100%of the property until her/his death, when the property will normally be passed to party or parties of choice, typically by means of a will. If you own property in the US you typically can leave it to anyone you chose, without regard to children, parents, etc. We’ve all heard of children being cut out of their parent’s will, etc.
Don’t try to translate that to Philippine law. It will get you in trouble. Here in the Philippines the law operates much differently than many are used to. Using our common example of Fil-Foreign family, let’s look at what happens when the Filipino partner passes away. (nothing really happens property-wise when the foreigner partner passes, since s/he never owned the property to begin with).
Wills are much less common here than in many developed countries. But they certainly are used. But when real property is involved, there is a basic underlying law which takes precedence over any language in a will. Philippine law stipulates a reserved portion of all estates for compulsory heirs
Certain parts of the estate of a deceased Filipino citizen cannot be freely disposed of because Philippines law reserves them for the “compulsory heirs”. The “compulsory heirs” are classified as:
- Primary – legitimate children and/or descendants
- Secondary – legitimate parents and/or descendants; illegitimate parents
- Concurring – surviving spouse; illegitimate children and/or descendants
This is one of the reasons I advise a lot of caution and competent legal advice before rushing off to buy property here. Note, in the three levels of “compulsory heirs” the surviving spouse comes, at best, on the third level of heirs to be endowed. The legitimate children of the marriage, the legitimate parents, illegitimate parents (a common occurrence here) all come first and the surviving spouse has to battle it our on level three with illegitimate children who may show up.
Here’s a typical example case: If a desceased is survived by her husband and four legitimate children, ½ of her hereditary estate is reserved equally between the children (1/8 each) whilst the husband takes the same share as one legitimate child i.e. 1/8. This leaves 3/8 of the estate which can be freely disposed of in accordance with her will.
The free portion of a hereditary estate can be freely willed to any person or class of person with the capacity to succeed under the Civil Code, even if that person is already a compulsory heir, with a prescribed share.
OK, so that means that the surviving spouse gets 1/8 under the compulsory law, but the wife could have made a will which gives him the ‘left over’ 3/8 as well … totaling up to one half, and the children have the other half (which he is likely the legal guardian of), so why worry?
One good reason to worry. A foreigner can inherit from a Filipino spouse, so long as he or she inherits from an intestate estate,that is, one with no will. Non-Filipino citizens, who can inherit land by hereditary or intestate succession (without a will) but not by testamentary succession (with a will). That 3/8 share we were talking about? It can’t be willed to the surviving spouse.
Keep one other thing in mind … the foreigner who inherits in this way is legally the owner under Philippine law, but he/she can not sell or bequeath to another foreigner. In other words the foreign ownership can not be a chain. the property does belong to the surviving foreign spouse but he/she can’t dispose of it at will. It can only be sold or bequeathed to a natural-born Filipino.
I already have a headache, myself. I think you can get enough of a taste here to see why I feel the property laws, especially with ‘mixed’ couples here are very convoluted. I see couple all the time who have invested their life savings and it’s all at risk because of children the wife had previously or even a case where the Filipino spouse’s father never married her mother and disappeared. If the man is still alive and chooses to, he can show up and demand his share of her estate … in front of the woman’s surviving spouse. If he has children, they can show up and claim their share of their father’s share. They may not prevail, but it will cost a small fortune in legal costs and months or years in court to defend against their claim. How strange is that?
Buy property if you chose to … my spouse and I are going to buy some ourselves, but be darn sure you don’t make it the cornerstone of your estate … it’s a place to live, not an investment, because neither the foreigner nor the Filipino owner has much control over the distribution … and these cases can go on for years.
Note: This article was previously published in 2008. I have edited it, fixed a number of typos, and also want to draw your attention to the comments … Atty. Claudette, for example, has very kindly taken the time to point out some errors, inaccuracies or obtuse explanations, so be sure you read the comments as well, there is typically a lot to learn there.