ESTATE TAX: Gross Estate of Married Decedents
Gross estate of married decedents:
1. The decedent’s exclusive property
2. The common property of the spouses
Exclusive
GROSS ESTATE
Less: Deductions
xxx
Conjugal/Communal
xxx
Total
xxx
*Separate or common properties depends on the property regime agreed upon before marriage
in their “Prenuptial Agreement”
BASIC RULE:
1. Common property presumption rule – properties of spouses are presumed common
properties unless proven to be exclusive properties of either of the spouses
2. Consistent classification rule – Sale or exchange of properties do not alter their classification.
Properties acquired using separate properties are separate properties, while properties
acquired using common properties are common properties. One exception under ACP
3. Accruals in value or gains on sale of properties – increases in value or gains on the sale of
properties are subject to the rules of the property regime agreed upon by the spouses
Common types of property regimes:
1. Absolute separation of property (ASP) – All properties of spouses are separate properties
except those which they may acquire jointly.
2. Conjugal partnership of gains (CGP) – All properties before marriage are exclusive. All
properties that accrue as fruit of their individual or joint labor and fruit of their properties
during marriage will be common properties of the spouses.
Properties before marriage
Properties derived during marriage:
- From fruits income or gains
Classification
Exclusive
Common
*Fruits does not follow principal. During marriage,
fruits of separate properties are still common. In other
words, all fruits derived during marriage are common
-
From gratuitous acquisitions:
a. For one of the spouse
b. For both of them
a. Exclusive
b. Common
3. Absolute community of property (ACP)
Retrospective feature – All properties which the spouses owned before the marriage which
they brought into the marriage will become common properties
Exceptions:
a. Properties of spouse with descendants in the prior marriage
Properties acquired
From gratuitous acquisitions
From fruit of industry
From fruit of property:
a. Separate
b. Common
Before marriage
Exclusive
Exclusive
a. Exclusive
b. Exclusive
After marriage
Exclusive if designated to one spouse.
Common if designated to both spouse
Common
a. Exclusive
b. Common
*Fruits follow principal. Fruit of exclusive property are
exclusive. Fruit of common property are common
property
For exclusive use of spouse:
a. Jewelry
b. Non-jewelry
a. Exclusive
b. Exclusive
a. Common
b. Exclusive
b. Properties for exclusive personal use of either spouse, except jewelry (always common)
Prospective feature – all properties which the spouses may acquire during the marriage from
their separate or joint labor or industry are common properties
Exceptions:
a. Gratuitous acquisition received by either spouses (if designated for both = common)
b. Fruits of exclusive property
c. Properties acquired for exclusive personal use of either of spouse, except jewelry
Properties acquired
From gratuitous acquisition
Before marriage
Common
After marriage
From fruit of industry
From fruit of property
a. Separate property
Common
Common
a. Common
a. Exclusive
b. Common
b. Common
Exclusive if designated to one spouse.
Common if designated to both spouse
*Gratuitous
acquisitions
of
properties during marriage is a
separate property, fruit of
separate property is separate
property. Fruits follow principal
b. Common property
For exclusive personal use of
either spouse
a. Jewelry
b. Non-jewelry
a. Common
b. Exclusive
a. Common
b. Exclusive
Note:
1. A jewelry acquired through gratuitous acquisition during marriage is exclusive property
because it is a gratuitous acquisition regardless of the property acquired and a jewelry
acquired using exclusive property, e.g. jewelry acquired using cash donated during
marriage, is still exclusive