Chapter 7:

Net Estate & Estate Tax:

Conjugal Partnership of Gains
INTRODUCTION
Marriage settlements may fix the property relations during the marriage within the
limits provided by the family code. The property relations between husband and wife
shall be governed in the following order:
 By marriage settlements executed before marriage;
 By the provision of the family code; and
 By the local customs.
The future spouses may, in the marriage settlements agree upon the following regimes:
 Absolute community
 Conjugal partnership of gains
 Complete separation of property
 Any other regime
 CONJUGAL PARTNERSHIP OF GAINS
This chapter shall deal with the net taxable estate and estate tax of spouses
whose property relations are governed by the system of conjugal partnership of
gains.
Under this regime, the husband and wife place in a common fund the
proceeds, products, fruits and income from their separate property and those
acquired by either or both spouses through their efforts and their chance.
Upon dissolution of the marriage or both of the partnership, the net gains or
benefits obtained by either or both spouses shall be divided equally between
them, unless otherwise agreed in the marriage settlements.
 WHAT COMPOSED THE GROSS ESTATE
OF MARRIED DECEDENT UNDER CPG
1. Exclusive Property of the Decedent
The following shall be the exclusive property of each spouse:
 Property which is brought to the marriage as his or her own;
 Property which each acquired during the marriage by gratuitous Title;
 Property which is acquired by right of redemption, by barter or by exchange with
property belonging to only one of the spouses; and
 Property which is purchased with exclusive money of the wife or of the husband.
 WHAT COMPOSED THE GROSS ESTATE
OF MARRIED DECEDENT UNDER CPG
2. Conjugal Property
 Property acquired by onerous Title during the marriage at the expense of the common fund, whether the
acquisition be for the partnership, or for only one spouses.
 Those obtained from the labor, industry, work or profession of either or both of the spouses.
 The fruits, natural, industrial or civil, due or received during the marriage from the common property, as
well as the net fruits from the exclusive property, of each spouse.
 The share of either spouse in the hidden treasure which the law awards to the finder or owner of the
property where the treasure is found
 Those acquired through occupation such as fishing or hunting
 Livestock existing upon the dissolution of the partnership in excess of the number of each kind brought to
the marriage by either spouse
 Those which are acquired by chance, such as winning from gambling or betting.
 WHAT COMPOSED THE GROSS ESTATE
OF MARRIED DECEDENT UNDER CPG
3. Proceeds of Life Insurance
Proceeds of life insurance policy payable to the insured’s estate may be conjugal or exclusive in
character. This time when the policy was taken and the source of premium payment shall determine
whether the proceeds are to form part of the gross estate of the decedent spouse.
If policy was taken before marriage, proceeds are exclusive and:
 Premium are fully paid by the decedent spouse, proceeds are the exclusive property of the
decedent spouse.
 Premiums are fully paid with the exclusive property of the surviving spouse, proceeds are the
exclusive property of the surviving spouse.
 Premiums are partly paid with the exclusive and partly with the conjugal funds during the
marriage, proceeds shall likewise be proportionately exclusive and conjugal.
Proceeds are conjugal if it was taken during the marriage because it is presumed that the property
acquired during marriage is conjugal.
 WHAT COMPOSED THE GROSS ESTATE
OF MARRIED DECEDENT UNDER CPG
4. Claims Against Insolvent Person
The inclusion of claims against insolvent person in the gross estate of the
decedent spouse as either exclusive or conjugal property will depend on the
nature of the claim whether it is for an exclusive or for a conjugal
property.
PRO-FORMA COMPUTATION TABLE OF NET TAXABLE
ESTATE
DEDUCTIONS FROM GROSS ESTATE
1. Expenses, Losses, Indebtedness, and Taxes
a. Funeral expense
b. Judicial expenses of testamentary/intestate proceedings
c. Claims against estate
d. Claims of the deceased against insolvent persons
e. Unpaid mortgages/indebtedness
f. Unpaid taxes
g. Casualty losses

2. Property Previously Taxed or Vanishing Deduction

3. Transfer for public use
4. Family Home
5. Standard deduction equivalent to P1,000,000.
6. Medical expenses
7. Amount received by the heirs under R.A. 4917
8. One-half net share of the surviving spouse in the conjugal partnership property
Gross Conjugal Estate-Charges against such conjugal estate=Net conjugal estate
Net Conjugal Estate/2= Net Share of Surviving Spouse