Most soon-to-be wed couples do not want to discuss how they want to structure their division of assets following the wedding. More often, they are simply in a state of bliss and a conversation about who gets what in the event of a death or divorce is not a pleasant subject. In Indonesia, however, prenuptial agreements are vital if the bride or groom is an expat.
When a foreigner marries a local in the archipelago, they’ll need to make sure a prenuptial agreement is in place before the official marriage proceedings. The reason for this is that in the eyes of the law, couples without the agreement are subject to the same rights in terms of asset ownership. Foreigners are not allowed to own a single inch of land in Indonesia, and if you don’t have a division of assets in the form of a prenuptial agreement, then your local spouse won’t be able to purchase property, for example.
That said, recently Indonesia passed a law that allows mixed couples to get postnuptial agreements in place. This meant that couples who accidentally forgot to get the prenup and found themselves in asset ownership “limbo” so to speak in Indonesia, now have the chance to undo that mistake. Therefore, the local spouse can legally own things like land and cars.
Expats or locals who are marrying an expat are more likely to be in need of a prenup, especially when they are the person who brings a lot of assets to the partnership, including a retirement account. You’ll need one if you have kids from a previous marriage. You’ll need one if you run your own business or are a partner in a company. The same goes with folks who are moving fast in their careers and are likely to earn a high salary in the future. Those who are paying for his or her spouse to get an advanced academic degree – which is likely to result in high future earnings – should also consider a prenup. And of course, get a prenup without hesitating if you plan to buy land or a home in the country.
According to an article written by Asep A. Wijaya, Managing Director of local law firm Wijaya and Co, an Indonesian prenuptial agreement must be tailored to the particular needs of the husband and wife, and be sufficiently flexible to take into account changes in your future circumstances. Unfortunately, there is no single framework, or one-size-fits-all form, for prenuptial agreements in the country. Each couple will need to consult their local lawyer to formulate the agreement prior to marriage.
As your lawyer drafts up the agreement, you’ll need to specify the percentage of the combined wealth that you and your spouse will receive if the marriage is dissolved. You should include a complete disclosure of all assets and liabilities, along with the value of each asset. Make sure that the terms of the agreement do not promote dissolution of assets.
If you are an expat and plan to marry an Indonesian, a prenup should be thought of as a no brainer.
As foreigners are not allowed to legally own freehold title landed property in the archipelago, and if you want to protect your spouse’s assets in the case that they pass away, a prenuptial agreement is incredibly necessary. If the government wants to, it can take all purchased property from the still living expat spouse if they did not have a prenup.
The sale, purchase, exchange, gift, or bequest via a will after a property owner is deceased which would transfer a hak milik (freehold ownership) to another party is controlled via government regulation. An attempt of this nature to transfer a hak milik to a foreigner will be nullified. The land in question will then go to the State with the understanding that any other parties’ rights to the land shall remain in existence and that all the payments which the owner of the land may have received cannot be reclaimed. Using a valid derivative benefit of a third person who does not know that the ownership of the land is in ‘Limbo,’ the state will recognize that third party’s rights.
In the past, some desperate couples would try to get their hands on a back-dated prenuptial agreement. This is illegal in Indonesia. There are surely unethical people that can get you a back-dated prenup, but it’s incredibly risky and ill-advised to try to process this. A back-dated prenup is a marital agreement that is dated prior to your marriage, but signed after you’re already married. The couples that try this are usually the ones who realize they need the agreement in place only after they tie the knot.
Historically, some mixed-nationality married couples have resorted to questionable measures, such as making purchases using fake IDs or buying property using a relative’s name.
Today – with the new rule passed – couples in this kind of tough situation can now opt for a postnuptial agreement.
For mixed marriages, postnuptial agreements (or post-marital agreements) are often used for couple who realize that they do want to have a financial plan after all. Sometimes, this is the result of the financial winds changing for the couple. One good example is if they come into some sort of inheritance and suddenly have assets that they didn’t have before. Another scenario might be one of the spouses suddenly changing careers and making a lot more money now.
If you and your Indonesian spouse are living abroad or planning to get married outside the country, and you’re unable to fly back just to sign a prenuptial agreement, then there are a few different things to consider. First, your prenup must be governed under the laws of Indonesia. Second, you can actually authorize your partner with a special power of attorney to sign on your behalf. This means that your spouse will sign twice, once for themselves and once for you. Third, if you do decide to go the route of giving your partner this special power of attorney, you will need to make sure that it gets legalized by your local Indonesian Embassy or Consulate.
Prenups and postnups need to be kept up-to-date. When your lawyer drafts the agreement, it should be designed to take into account the passage of time and changes in status. This includes, but is not limited to, the birth of children and becoming disabled. It is recommended to periodically review your prenup or postnup with your lawyer, every few years.
In the end, the simple advice is: Yes, you absolutely need a prenup or postnup if you’re marrying a local. The murkiness comes in, however, in the details of creating the document. The best course of action is to lawyer up before you even think about booking the wedding caterer.