Displaying items by tag: Couples

Getting marry is going to be the best decision you'll ever made. It is a simple decision with the a future lying ahead of you. They said the marriage is the foundation to everything in your life, among other, property. Both husband and wife are to have joint property ownership after the marriage, if they did not sign anything like a prenuptial agreement. Sometime, you don't get one just because you thought you did not need one. But now, the Constitutional Court revised the Article 29 (1) of the Marriage Law that the marital agreement may be entered as well during the course of marriage. The verdict number 69/PUU-XII/2015 officially created a postnuptial agreement on October 27, 2016 as one of the legal instrument in management of your assets in the marriage. Now, you can have one when you feel you need one.

The ideas behind this decision to officially allow the postnuptial agreement for married couples were to create separation of property and assets between husband and wife. Their separate assets are protected. No drama in fighting for property division. The same idea also applicable to debts. Husband and wife shall responsible for debts they created. The postnup therefore shall create separation of liability during the course of marriage. Furthermore, no consent is required from each of the party in the marriage in the event they want to sell their own separate assets. As for loan application with the bank, neither party is required to obtain consent from their spouse in putting their separate assets as a mortgage. In view of the above, the court wants both parties are totally independent in managing their assets. This is a fine legal reasoning. The Constitutional Court, they keep-up with the contemporary developments within the society in Indonesia. Awesome!

The validity of the postnup shall be initiated as soon as you’ve signed it. It is applicable since you entered it, and it is advisable not retroactively backward. It is applicable on actual date. This is to avoid any conflict of interests with any third party, because since the marriage date the couple might have been created jointly owned marital assets. It is very difficult to differentiate which property belongs to separate or joint property. You may potentially jeopardize the third party’s interests such as banks, and other investors in your marital assets. If you should retroactively draw the postnup back to the marriage date, at least you need to have the properties included into the exhibit and make sure they are mortgage-free. Apart from the ones listed in the exhibit, they belong to both of them. The couple is to have equal shares. This will also include the creditor(s) having a portion in the unlisted properties for the part that a mortgage has been put under. You may want to contact me here to discuss any further about this matter. At Wijaya & Co, we always pay attention to details of our client’s case. 

The postnup created under the verdict from the Constitutional Court has potential challengeable issues. The verdict put a notary as the party that legalize the postnup. According to the civil law procedures doctrines, this is not a proper ruling. They put the role of a notary to substitute the authority of a judge. You see, having a prenup and not having a prenup is a big deal, because it creates a property separation during the course of marriage. This situation is full of potential issues because when you're having a property, whether you like it or not, it involves other third party(ies) too, not just you and your spouse. The other third party such as bank as the lender if the property under mortgage, the government through the BPN (Badan Pertanahan National/National Land Registry), and other party that may have interest in your assets acquired during the marriage. At Wijaya & Co., we always pay attention to our clients' details and therefore issues are identified before they become potential hiccoughs. 

By having a notary legalizes a postnup, they are driven to declare some new legal situation. Last time I checked, this is the domain of a court through their legal instruments i.e. court decree. They called it a Declaratory Verdict. It creates a new legal facts, a new situation. For instance, declaring from joint property ownership to separation of ownership. As far as I concern, the court have a very established sets of law in civil procedures. Before finally reaching the verdict, the court must conduct a cross examination. This is a very important phase in civil legal system. If you were not happy with the verdict, you may file an appeal to the higher court within 14 (fourteen) days since the date the verdict reached. If there was nothing within that set of time-frame, the court finds that you are happy with the verdict, and everybody can get on with their lives. Your Indonesian attorney may proceed to draft a postnup for you.

You can't have those situations if a notary is to legalise the postnup. The convert from joint property to separate property, is not legally assessed with substantial rule of evidence, like the one they're doing it at a court proceeding. If one of the spouses was not happy, or seek any potential leeway that may benefit them in a divorce case, they might want to revoke the prenup. I would say they may be able to do that. Therefore, the postnup as its final outcome, is challengeable, and may be voidable. I would suggest you should consider it with full discretion. If your situation is full with substantial marital property, you should decide if any further reasonable action may be taken to secure your interests. Please contact me should you wish to discuss any further about this.

 

Our thanks to Mr. Asep Wijaya of Wijaya & Co for sharing this article!

Prenuptial agreement in Indonesia is an agreement you sign with your partner before performing the marriage. The date when you execute it must shows clearly that it is being entered on or before the legal marriage date. I have reason to believe that your legal marriage date may be different than the solemnization date. It because the marriage in Indonesia is considered legal when you perform the religious marriage prior the civil ceremony, unless of course, if you were married in Moslem rites. The latter requires no civil marriage registration. So, the prenuptial agreement must be entered into before the date of the civil marriage, the legal one. 

When a Prenup Begins

Let’s have a look what the law said about it in Article 119 of Civil Code stipulates that from the moment of execution of the marriage, it shall arise by law joint marital property between the spouses to the extent that no other stipulations have been made in the pre-nuptial agreement. There you go, the prenuptial agreement must be executed before the marriage. Beside, if you did not sign any prenup, you will have joint property ownership. This condition is preventing your Indonesian spouse to keep owning a property after she/he married to you. 

The validity of a prenup begins when you and your partner sign it and register it with the marriage registry. The laws said it is valid when the officer at the marriage registry is to legaize the prenup. So, they are actively legalising the document. While in fact, they are only conducting registration of the prenup together with the registry of your marriage. This is extremely important because this action giving you a legal recognition to make the prenup valid between you and your spouse. Without this, your marital agreement is nothing but worthless piece of paper. It has no legal effect and won't do any good for your mixed-marriage life in owning a property in Indonesia. The registration of the prenup applicable to all the marriages performed and registered under the laws of the Republic of Indonesia, in accordance with the  Circular Letter of Civil Registry Directorate General number 472.2/2017 for Non-Moslem, and Circular Letter of Ministry of Religion Number B.2674/DJ.III/KW.00/9/2017 for Moslem couples. 

I am an old-fashioned guy, so I would recommend to register the prenup with a district court. This is to make your prenup valid legally against third party. Your property ownership involves other third party such as the government, banks, creditors, etc. The publicity requirement is met when you're registering the prenup with a court. Please refer to Article 152 of Civil Code that states: "No  stipulation in the prenuptial agreement which deviate entirely or partially from the provision regarding legal community property shall apply to third parties, earlier than from the date of copying such stipulations in a public register, which shall be done with the court clerk at the court of justice, within those legal jurisdiction the marriage was executed."

One item missing in your prenup might cause it challengeable. This can be a potential loophole you don't want to miss. At Wijaya & Co, we always pay attention to details of our client’s case. You better have an umbrella when it does not rain, instead of you don't have one and it gets rain. Indeed, it won't stop the rain, but at least it will make you stand in the rain. 

One Prenup for Everyone

In the event you are a foreigner planning to marry to an Indonesian, the prenup have certain issues that must be addressed to. First, we have many types of the prenup, You need to get the right one. Failure to do so will affect the ability of property ownership in your mixed marriage. You need to get a prenup with total separation of property. This is applicable to both the assets and debts of the couple. Don't use the one that suggesting joint property ownership. This one is the last thing you need. They have an old Dutch term for this: "Gronds verponding verbood." Forgive my rusty Dutch. The idea of having this type of prenup is because the laws forbid foreigners to own lands in Indonesia. Article 26 (3) of Basic Agrarian Law imposed that in the event by marriage, inheritance, or by any other means she/he loses the citizenship of Indonesia, he/she must transfer the title of the land to other third party or the state will take possession. Please contact me should you wish to draw-up a more suitable prenuptial agreement that just right for you!

In terms of mixed-marriage, I would say the above situation only applicable if you marry to a foreigner and your status in owning the property is legally affected by your foreign spouse. Since the property falls into the definition of joint property, both of you co-own the assets and therefore require consent from each other. This is not good. In any way, the consent may not be retrieved because the foreigner is not in the legal position to own the property in the first place. The ideal situation is no consent is required from either party to execute any property transaction. Either party is independently to act on his/her behalf. The idea is to keep the land with the Indonesian only. 

Transferring the Property

Second, legal constraints as set-out by Article 21 of Basic Agrarian Law certified that an Indonesian is precluded to own a freehold title after she married to you as a foreigner, without any prenup. In the event, the Indonesian spouse passes-away, you may keep the property for 12 (twelve) months. Unless, if you transfer the title to other Indonesian. Transfer means you can sell it, give it away or inherit to your child, provided she/he is an Indonesian, of course. Standard tax rate is applicable for this transaction.  

You can also to downgrade the title from Hak Milik (freehold title) to Hak Pakai (Leasehold). It valids for twenty years or so. You can renew it after. This can be the smart solution if you want to keep the property for quite a while. Until you know what to figure out next.

The third one, you should consider the inheritance with you next of kin. Inheritance issues in Indonesia are referred to a person’s religious affiliation. If you were in Moslem family, the people in layer one, the next of kin in the event one passes-away, are very crowded. If you want the assets distributed to just the surviving spouse and the children, and prevent the other extended families to even touch them, you should consider a last will. Seriously. Please contact me should you wish to discuss any further about this. You can drop me an email or give me a call to have a free assessment of how can you move forward with the solution available for you.

 

Our thanks to Mr. Asep Wijaya of Wijaya & Co for sharing this article!

© 2021. All Rights Reserved