A number of foreigners have told me that if you name is on the deed with their Filipina wife, should their wife predecease them, the property passes to them. This not entirely correct. To understand why, one needs to work their though of Philippine law, beginning with the Philippine Constitution
What does the Constitutional provision on foreign ownership of land in the Philippines say? Section 7, Article XII of the 1987 Constitution states: “Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain”. Thus the rule is clear that aliens, whether individuals or corporations, are disqualified from acquiring lands of the public domain. Hence, they are also disqualified from acquiring private lands.
What are the exceptions to the restriction on foreigners’ acquisition of land in the Philippines? Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by Batas Pambansa 185 and R.A. 8179, acquisition before the 1935 Constitution, purchase of not more than 40% interest in a condominium project, and acquisition through hereditary succession if the foreigner is a legal or natural heir.
What is meant by ownership on the basis of hereditary succession? Hereditary succession refers to intestate succession wherein the person dies without leaving a last will and testament. Therefore the transfer of ownership of land to the non-citizen spouse cannot be totally done through a last will and testament of the decedent. It is subject to the condition that his or her compulsory heirs interest in the estate are satisfied. The compulsory heirs of the deceased spouse are guaranteed a portion of the decedent’s estate. There are different classes of compulsory heirs, a spouse is in a class called Concurring Compulsory Heirs. Property not subject to the rules, is the free portion of the estate and can be deposed by the decedent’s Will.
So, What are the property rights of a foreigner married to a Filipino citizen? The foreigner can legally own a house or building on the land as long as he or she does not own the land on which the structure is built – an interesting rule. For this purpose, the documents like Deed of Sale can contain the name of the foreigner spouse, except for the title.
Where a foreigner is married to a Filipino citizen, and the Filipino spouse dies, the non-Filipino as the natural heir will acquire a legal interest in the property along with possible other heirs of the deceased spouse. Thus, in most cases, the surviving foreign spouse will be the co-owner of the property with other heirs of the deceased spouse. Not a good situation for the foreign spouse.
This brings us to the phrase in the Certificate of Title, which states, for example, “April Ann Cruz, married to John J. Smith, a United States citizen”. This phase is merely descriptive of the civil status of the owner of the property. In this case, the owner is April and she is married to John. The phase does not give John a right of survivorship interest in the whole property upon April’s death. This is often the cause for the mistaken interpretation made by many foreigners that by right of survivorship they will inherit the property, if their name is on the certificate of title.
So, when a non-citizen married to a Filipino spouse and that spouse dies, the surviving spouse most likely will not inherit all of their martial home. Unless the deceased spouses has no surviving family, members of her family will inherit part of the property compulsory heirs rules. The situation is even worst were the property is in the name of a girl friend and the girl friend dies. The non-citizen has no rights in the decease girl friend estate, therefore no rights in the property.
The situation for a foreign spouse interest in the martial real estate is not good, but it is not hopeless if the non-citizen takes the time to understand the Philippine estate distribution rules. For example, creating and funding a trust that acquires the real property is a possibility. Unfortunately, for many foreigners that own property with their Filipina spouse, and the spouse dies first, the foreign spouse may find themselves in a bad situation.
_________________________________
Author’s email: wolff2000@earthlink.net
