Article 103 of the Family Code: Liquidating community property after a death
Status: In force
What does Article 103 say?
Upon the termination of the marriage by death, the community property shall be liquidated in the same proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the community property either judicially or extra-judicially within one year from the death of the deceased spouse. If upon the lapse of the said period, no liquidation is made, any disposition or encumbrance involving the community property of the terminated marriage shall be void.
Should the surviving spouse contract a subsequent marriage without complying with the foregoing requirements, a mandatory regime of complete separation of property shall govern the property relations of the subsequent marriage.
What does it mean in plain language?
When a spouse dies, Article 103 of the Family Code requires the absolute community property to be liquidated. This happens in the court case for the settlement of the estate. If no such case is filed, the surviving spouse must liquidate the property, in court or out of court, within one year from the death. After that year, any sale or mortgage of community property without liquidation is void.
To "liquidate" means to list the community property and its debts, pay the debts, and divide what is left. Only after that is it clear which part belongs to the surviving spouse and which part goes to the heirs of the one who died.
How does it work in real life?
Nora: one year to liquidate
Nora's husband Oscar died. They married in 2000 without a prenup, so their property regime was absolute community. No estate case is filed in court. Under Article 103, Nora must liquidate the community property within one year from Oscar's death, either in court or out of court. If she sells community land after that year without liquidation, the law says the sale "shall be void".
Nora: a new marriage
Two years later Nora marries Paulo, but she never liquidated the property of her first marriage. Under the last paragraph of Article 103, her marriage to Paulo is governed by a mandatory regime of complete separation of property.
These are made-up examples to show how the rule works. They are not advice for any real case.
What does this mean in practice?
- Absolute community is the default regime for marriages under the Family Code without a prenup (Article 75). It covers almost all property owned at the wedding or acquired after (Article 91).
- For couples under the conjugal partnership of gains, see Article 130: same structure, but six months.
- While the marriage lasts, a sale or mortgage of community property needs the other spouse's written consent or court authority (Article 96).
- Settling the estate out of court is explained in extrajudicial settlement of estate. Who inherits when there is no will: inheritance without a will.
- For a question-and-answer guide, see selling conjugal property after a spouse dies. For an overview of the property regimes, see property of spouses: who owns what in a marriage.
What does Article 103 say?
Upon the termination of the marriage by death, the community property shall be liquidated in the same proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the community property either judicially or extra-judicially within one year from the death of the deceased spouse. If upon the lapse of the said period, no liquidation is made, any disposition or encumbrance involving the community property of the terminated marriage shall be void.
Should the surviving spouse contract a subsequent marriage without complying with the foregoing requirements, a mandatory regime of complete separation of property shall govern the property relations of the subsequent marriage.
Who must liquidate, and when?
There are two routes:
- There is a court case to settle the estate. The community property is liquidated in that same case.
- There is no court case. The surviving spouse liquidates the community property "either judicially or extra-judicially", meaning through the court or by agreement out of court, within one year from the death.
What happens if nobody liquidates within one year?
The second paragraph sets the effect: if the year passes without liquidation, "any disposition or encumbrance involving the community property of the terminated marriage shall be void". A disposition is, for example, a sale or a donation. An encumbrance is, for example, a mortgage.
What if the surviving spouse remarries first?
The third paragraph applies. If the surviving spouse marries again without complying with these requirements, the new marriage is governed by "a mandatory regime of complete separation of property".
Frequently asked questions
What happens to community property when a spouse dies?
The marriage ends and the community property must be liquidated. Under Article 103, this is done in the proceeding for the settlement of the deceased spouse's estate.
What if no estate case is filed in court?
The surviving spouse must liquidate the community property, in court or out of court, within one year from the death of the deceased spouse.
What happens if there is no liquidation after one year?
Article 103 says any disposition or encumbrance involving the community property of the terminated marriage shall be void. A disposition is, for example, a sale; an encumbrance is, for example, a mortgage.
Can a widow or widower remarry before liquidating?
Article 103 deals with the property effect: if the surviving spouse remarries without complying with these requirements, a mandatory regime of complete separation of property governs the new marriage.
Does Article 103 apply to couples under conjugal partnership?
No. Article 103 is for the absolute community. For the conjugal partnership of gains the same rule is in Article 130, but the period is six months instead of one year.
General information, not legal advice. For your case, ask a lawyer, the Public Attorney's Office (PAO) or the agency.
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