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Legal Advice for Expats in Indonesia: Pre Nuptial and Post Nuptial Agreements

By Wijaya & Co Law Firm

Summary: Legal advice for expats planning to marry in Indonesia.

Marriage in Indonesia - Legal Advice for Expats

Most people think of marriage as the ultimate emotional and spiritual bond. They are looking to a life of happiness. However, when faced with negotiating a premarital agreement, they realize that not only do they have to decide what will happen to them when they divorce or die, but thay they also have to negotiate these issues with their fiance(e). It's just not what people are thinking about when they are getting married.

If you are foreign nationality and plan to marry an Indonesian spouse, you need to get a prenuptial agreement. Considering foreigners are not allowed to have a property in Indonesia, and if you wish to take the quite sensible precaution of a prenuptial agreement for the purpose of protecting yourself and your properties in the event that one of you dies, a prenuptial agreement is a must-have choice. The Indonesian government can, by law, take virtually everything away from the grieving party because they did not create such a protective document PRIOR to marriage.

To avoid this trouble, it would be prudent to draft a prenuptial agreement complying with the Indonesian laws to ensure that your financial interest(s) will be up-held by the Indonesia court. As one of the Indonesian legal services working for family law cases, especially mixed-marriage cases, we will walk you through the proper procedures how the prenuptial agreement incorporated in Indonesia.

Legal Aspects

The 1974 Indonesian Marriage Law has a very simple provision of prenuptial agreement compared to the ancient Dutch Law, Civil Code. The law governing the prenuptial agreement only consist of one article. It stipulates that the agreement should be made prior to marriage. The agreement should be legalized by the marriage registry office. Civil Registry Office for Non-Moslem, and Office of Religious Affairs for Moslem.

Both parties are free to determine the form of law, as long as abiding the law, religion, and moral consideration. The provision are indeed very general. The legislatures seem to let it so in order to make it flexible with the development of the religion, moral, and public order.

Other provision stipulates that the agreement can not be amended during marriage, except upon approval of both parties and do not cause disavantage to any third party.

Person in Need of a Prenup

Consider a prenuptial agreement if you suit with at least one of the following conditions:

1. Person of foreign nationality wishing to marry to an Indonesian partner and wish to own property in Indonesia;

2. Person who is bringing a lot of assets to the partnership, including all retirement account;

3. Person who has his or her own business or is a partner in a company;

4. Person on a fast career track who is likely to earn a hefty salary in the future;

5. Person who has children from a prior marriage;

6. Person who is paying for his or her spouse to get an advanced degree likely to result in significant future earnings.

Making a Prenup

Indonesian laws does not provide ready-made frameworks for prenuptial agreement. You and your Indonesian lawyer have more leeway to define your future legal relationship, although you are bound by law, religion, moral, and public order consideration in drafing the agreement.

Indonesian prenuptial agreement must be tailored to the particular needs of the spouses and sufficiently flexible to take into account changes in your future circumstances during the course of marriage.

Begining by collecting all the things you want to be included in the prenuptial agreement. Ask your Indonesian lawyer to draft the agreement and request for recommedation. But you need to take a note that the marriage property will be under your Indonesian spouse's name. Once again, foreigners of are not allowed to own a property in Indonesia. You just need to specify percentage of the property each spouse will get if the marriage was dissolved. Include in the agreement full disclosure of all assets and liabilities, including the value of each asset. Make sure that the terms of the agreement do not promote dissolution.

Keep all drafts of the documents by email so that there is a record that you have reviewed every draft. Keep all the drafts, correspondence, and notes so that the file reflects the negotiations and the various resulting revisions. Name and number the drafts in consecutive order such as "draft number three". This record will be very helpful is the agreement is later contested.

After negotiating the agreement, make sure you understand its terms and the importance of abiding by them. An agreement followed by both parties is more likely to stand the test of time.

Avoid commingling assets and to keep careful records. A qualified accountant and bookkeeper can assist you. Even if the agreement is set aside or revoked, careful bookkeeping will make it easier for the court to trace and will save you lots of money.

Legalized and Record the Agreement

The agreement should be legalized by the marriage registry office. Civil Registry Office for Non-Moslem or Office of Religious Affairs for Moslem. A premarital agreement also must be recorded with the registrar office at the local district court.

The agreement will take effect for the spouses when the marriage legalized at Civil Registry Office or Office of Religious Affairs and shall take effect against third party since the date of registration with local district court, where the marriage will take place.

If the agreement is not recorded at local district court, then the marriage will considered as if there is not prenuptial agreement exists. Thus, your marriage will have joint-ownership in property. If one of your pass-away, your will have to sell the property within one year. Otherwise, Indonesian government will take possesion.

Updating the Prenup

It is important to understand the need to keep the agreement up-to date. Agreement should be designed to accommodate the passage of time and changes in status, such as the birth of children, and increase or decrease in wealth, or the disability of either party. Since no agreement can take into account all possible eventualities, however, you need to review the agreement periodically, with an Indonesian lawyer, to keep it current.

Post Nuptial Agreements

Postnuptial agreements, also known as postmarital agreements, are agreements entered into after a marriage has taken place, but before the parties seek to divorce. There are many reasons why a couple might wish to draw-up a postnuptial agreement. Among others, a couple that did not sign a prenuptial agreement before marriage may later determine that they want to have some sort of financial plan in place in the event of death or divorce. Additionally, a major change in the financial circumstances of the couple, such as a major career change or inheritance, may alter the financial landscape, requiring a change to the terms of the couple's existing prenuptial agreement to reflect their current wishes.

The harsh reality is that the courts tend to assume that a prenuptial agreement is always valid, but they have the opposite reaction to the postnuptial agreement; the assumption is, in the majority cases, that this type of agreement is not valid.

Indonesia's Marriage Law only recognizes prenuptial agreements, ('prenup' for short) a written contract created by two people before they are married. The 1974 enacted law only discussing the matrimonial agreement that must be drawn-up prior to marriage. Indeed, the law regarding the validity and enforcement of postmarital agreements is not well developed in Indonesia. But if we dig a little bit deeper, Indonesian Civil Code provides special provision concerning property division in the course of marriage.

Property Division in the Course of Marriage

In accordance with Indonesian Civil Code, the wife may, in the course of marriage, request a division of assets, in the following circumstances, PROVIDED FURTHER that the division of assets pursuant to mutual agreement shall be invalid:

1. In the event the husband, due to patent misconduct, has squandered the community property, and has exposed the houshold to ruin;

2. If, due to a husband's misconduct and mismanagement of his affairs, his wife is in imminent danger of losing the security of her dowry and her entitlements pursuant to the law;

3. And also id due to grosss negligence in the management of the community property, such property might be endangered.

The division of assets shall, prior to taking place, be made public. Failure to do so shall render the implementation invalid. The judgment granting permission for division of assets shall be effective from the date on which lawsuit is filed. The wife, may, during the proceedings, with the approval of the judge, take precautionary measures to prevent the assets from becoming lost or squandered.

Creditors of the husband may intervene in the proceedings between them in order to dispute the claim for division of the assets. The creditors of the husband who have not interfered in the proceedings may oppose the division, notwithstanding that it has taken place, in the event that their rights have been expressly restricted as a result thereof.

The judgment granting permission for the division of assets, shall lapse by law, if the division of assets, which should be evidenced by an authenthic deed, does not take place, or, if within a period of one month after the judgment is granted, no legal claims have been filed by the wife seeking division which claims shall be continued regularly.

The authentic deed, although it is not commonly referred to as a postnuptial agreement, may be useful to couples seeking to enter into a postmarital agreement after a significant financial change or a period of marital conflict. It is signed and entered into in contemplation of an existing, ongoing, and viable marriage. This agreement allows married couples to legally pre-determine how property will be divided if the couple divorces.

Legal Implications

Legal implications will occur due to property division in the course of marriage, they are:

1. A wife, whose assets have been separated from those of her husband, shall be restored as independent manager thereof, and may obtain approval from a judge in order to have her movable assets at her disposal.

2. Notwithstanding the division of assets, a wife is obligated, in proportion to her income and that of her husband, to contribute to the expenses of the household and the education of the children, borne to her by her husband. In the event of the insolvency of her husband, a wife shall be solely liable for such expenses.

3. A husband shall not be responsible for his wife, in the event that their assets have been separated and she fails to use or re-invest the proceeds from the sale of immovable assets, transferred pursuant to approval from the judge, unless the contract was drafted with the assistance of her husband, or it is proven that the proceeds were provided by him or have benefited him.

Reinstatement of the Community Property

The community property which is dissolved by separation of assets may be reinstated with the consent of the spouses. This can only take place by an authentic deed.

In the event where community property is reinstated, matters relating thereto shall be afforded the same status as that applicable prior to separation, without prejudice to the result of acts carried out by the wife which took place in the interim between separation and reinstatement.  Agreement providing for reinstatement of community property by the spouses for any reasons other than those already specified shall be deemed void.

The reinstatement of community property must be made public by the spouses. Third parties shall not be affected by the reinstatement until the public announcement has been made.

While you certainly can create and enter into a post-marital agreement on your own, having an experienced Indonesian lawyer assist you, will make sure that all of your assets and financial interests are legally protected and binding in the event of separation or divorce.

Disclaimer:

The above is provided for informational purposes only and is NOT to be relied upon as legal advice. This information is not a substitute for the advice of an attorney and should not be construed as a solicitation. No attorney-client relationship is established by use of information found anywhere in this article nor in this or author's website.

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About the Author

Wijaya & Co is a full-service Indonesian law firm principally engaged in the provision of wide-range legal service to international clients in Indonesia, for businesses, for Families and Individuals, and for Indonesian-Expatriate Couples.

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Comments about this Article

JP1234
Dec 2, 2010 02:36

Understanding prenuptial agreements is crucial when entering an international marriage. This blog focuses on Indonesia, but everyone entering into an international marriage should be aware of the marriage laws in their jurisdictions. It is so important to know how prenuptial agreements are regarded in various countries if spouses are not the same nationalityCouples should actually agree on the conditions in the pre-nup with the worst-case scenarios in mind. A prenup is a legal document and should be either upheld or allowed on an appeals court’s docket. International marriages involve many legal concerns. Thailand is also a popular country for Western-Thai international marriages. Couples have to be very careful when signing prenuptial agreements in Thailand because of the many unlicensed agencies and attorneys claiming to specialize in this area and because of multiple international jurisdictions. Couples should be cognizant that if the agreement is signed in Thailand, Western courts may weigh it differently or not consider it at all, and vice versa. Perhaps, as this blog anticipates, prenups will now be given more consideration by Western courts. The ruling in the UK heiress case in October shows us that prenuptial agreements are being upheld in their original forms, even in the instance of international marriage. Couples in international marriages should ask their attorneys about what might happen to their pre-nup if the agreement is considered in a different jurisdiction. Couples should be encouraged to do research regarding the attorney who drafts their prenuptial agreement and how much weight it will carry in various courts.

First Published: Mar 22, 2008

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