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Inheritance Issues for Expat Men Married to Indonesian Women...

And a few solutions!

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Situation/Question:

An Indonesian lady marries a foreigner and they buy a house (in her name) and set up a PT business (again in her name) and the husband either "helps" his wife in the business or is legally employed by it. What would happen to the house and business if the wife was fatally injured in a car accident or died from a terminal illness? Are wills used in Indonesia in the same way as UK/US? If yes, and the wife's estate was willed to her husband, would everything have to be sold and the husband gets the proceeds? Or do I understand that the government would sell the assets and keep the money? There are no children.


Various responses from Members of the Expat Forum:

When your wife passes away, you have one year from the date of death to sell your properties. If you manage to sell out, you get 50% (if you have no children) and the late wife's family gets the other 50%.

If, after one year, you haven't been able to sell, the estate is handed over to a government body and the courts decide how the estate will be divided. The expat husband will probably get next to nothing.

Otherwise, during that year you can have the estate placed in another Indonesian's name but this is not a direct transfer of title. It must be "sold" and you will have to pay the tax on the sale.

There is no easy way out and what ever you do, it takes a long time (and money). Took me just about a year and I had started the ball rolling before the event (cancer, so I had time). It's a lot more involved than I have mentioned, believe me.

It may well be wise for husband to form an investment company first, before forming the company, which could then buy the house and set up a PMA (Penanaman Modal Asing).


The wife must sign a letter authorizing a lawyer or a law firm to handle her affairs on the husband's behalf in the event of her death. I don't have the "name" of that letter at my fingertips, but any law firm or Notaris could advise. This legal paper immediately puts the family at arms length and they can do nothing unless the lawyers and you agree.

In my case my wife had cancer, so we had time to do this. If she met her end in an accident, then we would not have been able to do this. Check on the possibility of keeping one of these letters current all the time to avoid sudden events catching you out.

Make sure that any and all bank accounts are JOINT. Not an account in her name with you having "signatory" rights. Even though you are the husband, the courts will not hand over the money without including the deceased wife's family, as by Indonesian law, they are entitled to some or all of her assets.

I was asked by my lawyer if I didn't have any Indonesian friends here that I trusted to "hold" my property in name only, especially after all the years I'd lived here. I answered in the affirmative, but advised that my friend's wife's sister's husband's brother would be the one to start the move against me as soon as his distant relative became the "legal" holder of my property. The lawyer agreed and we went a different direction.

In the end I "sold" my estate to the law firm (rather than to one individual) and they held it for me for almost two years till I got my act together again. I have re-married and have placed the properties in my new wife's name. Now, understand that no money changed hands but I "sold" my properties to the law firm, then they "sold" them to my new wife. Both times I had to pay the taxman and it did get expensive as the costs were based on percentage of market value.

As for my late wife's family, we (the lawyers and I) offered to buy their "Hak". A deal was made and I gave her family a fair amount of money (fair in the sense that they had never done anything for us!) and her father signed over his claim option. That left me open to deal with the law firm as full owner of the properties.

Notaries are involved and absolutely nothing will get done without going through the chain of command: RT, RW, Lurah, Camat and then the court/judge. The lawyers sorted all that out, but I spent a lot of time in law offices and judge's chambers, etc.

This is a lengthy process and very difficult to deal with as one is dealing with grief and sorrow at the same time as one is sorting out the legal aspects of the situation.


An English friend of mine suffered a similar fate. He decided to give the wife's family a fair settlement. They, in turn, took that money (a fair amount) and hired a lawyer to contest the rest of the estate! Yet more reason never to entrust significant property in the name of someone you think you "trust" ultimately, you can trust noone but yourself.

If you are serious about securing your property, then set up your own company, either as a PMA ornominee holding company. Then make a will. You *can* secure property in Indonesia using the right structures.

Real estate in Indonesia may only be owned by Indonesian citizens or Indonesian legal entities (i.e., companies, yayasan, etc.). Thus, the only way a foreigner can truly have an interest in Indonesian land is by owning (or controlling) an Indonesian legal entity, in this case, either a PMA company or a PMDN company in which control of shares have been signed over to a third party.

Although land owned by companies may not be "Hak Milik" (often, and rather erroneously, translated as "freehold"), the Hak Guna Bangunan title is completely solid, and exists for as long as the company exists, and such titles are mortgageable.

Of course, setting up these companies has an initial cost, and in the case of nominee companies there are ongoing nominee and administrative costs, however if you want security, this is the *only* way to do it, despite what Bali property salespeople may tell you.


This is potentially a very technical and complex subject. A good starting point is the knowledge that a) foreigners can't own land etc.. and b) Indonesian law assumes community (joint) property between husband and wife except for gifts and inheritances.

So the starting point is that an Indonesian wife will need a marriage contract which states that immovable property in her name legally belongs to her alone, this is because her husband is a foreigner and can't own land in Indonesia in the first place. So when you say "recover his assets on the death of his Indonesian wife", legally they cannot have been his! Generally what happens is that the foreign husband provides money for the Indonesian woman to buy the land. They should however document a loan agreement or mortgage on the land to that effect and the husband who put up the money should hold the certificate of title. That way if the woman dies, the husband will still have his mortgage and the certificate of title, even if the property has to be sold or legally transferred to another Indonesian (perhaps a family member). An additional factor would be for the husband to take a lease of the land. Of course all this needs to be done to also protect the wife if her husband gets hit by a bus!

There is no reason why the wife cannot will her legal assets to her husband, and leave her family out of it. That's up to her. But even then, the husband will never be able to own the land, because he is a foreigner.


This is as I know it. In the event of your wife's passing, her family is entitled to their "Hak" (rights). Basically you are entitled to your 50%. The lawyers told me that her 50% would be divided between her surviving husband and their chlidren. That would entitle you to 50% of her share. On paper you should be allowed 75% of the money from selling the property and her family to get the remaining 25%.

Lawyers also told me that to get your 50% is straight forward, but to divide her share with you and the family is more difficult especially if the family contests that move. If you would be satisified with the 50% and let the family have the other 50%, it should be smooth and easy. But, remember that the house/property sale has to be done inside one year and that is not easy.

This deal about the family having "Hak" is law and cannot be circumvented. As mentioned in my other posts, it is possible to " buy" their Hak and then you get whatever you can sell for. Again this has to be agreed upon by both parties and proper paperwork from a law office and Notary is required so that they cannot come back to you later for additional claims.

If your wife's family are good people and treat you OK, "selling" out to a member of her family in order to maintain Indonesian ownership is the best option. An agreement between them and you that you can live there should be ok. If there is any problems with you residing there, a palsu (fake) rental agreement can be drawn up showing that you are renting the place. It's legal and no money has to pass hands. Again, one of my short stories here. Don't mean to ramble.

Thanks to the members of the Expat Forum who generously contributed to this page!

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