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Prenuptial Agreements for Mixed Marriage Couples

Most people think of marriage as the ultimate emotional and spiritual bond. They are looking forward 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 that they also have to negotiate these issues with their fiancé(e). It’s just not what people are thinking about when they are getting married.

If you are foreigner and plan to marry an Indonesian spouse, you need to get a prenuptial agreement. Considering that foreigners are not allowed to legally own 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 every purchased property away from the grieving party if they did not create such a protective document PRIOR to marriage.

To avoid this kind of trouble, it would be prudent to draft a prenuptial agreement complying with Indonesian law to ensure that your financial interests will be upheld by Indonesian court.

Legal Aspects

The Indonesian marriage law of 1974 has a very simple provision for prenuptial agreements, when compared to the former Dutch law, Civil Code. The law governing the prenuptial agreement only consists of one article. It stipulates that the agreement should be made prior to marriage. The agreement should be legalized by the marriage registry. It means, registering with Civil Registry for Non-Moslems or with the Religious Affairs Office (so called “Kantor Urusan Agama/KUA”) for Moslems.

Both parties are free to determine the form of law, as long as it abides by the law: religious and moral. The provisions are indeed very abstract. The legislature seems to leave it that way in order to make it flexible with the development of the religion, moral, and public order.

Another provision stipulated in the marriage law is that the agreement cannot be amended during marriage, except upon approval of both parties and cannot cause disadvantage to any third party.

In order to be legal and valid in Indonesia, the pre-nuptial agreement must be executed by an Indonesian lawyer/notaris. An agreement which is simply notarized in a foreign country is not sufficient and not valid in Indonesia.

Persons in Need of a Prenup

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

1. You are the person who is bring a lot of assets to the partnership, including a retirement account
2. You have children from a prior marriage
3. You own your own business or are a partner in a company
4. You on a fast career track and are likely to earn a hefty salary in the future
5. You are Indonesian planning to marry to a foreigner
6. Anyone who is paying for his or her spouse to get an advanced degree which is likely to result in significant future earnings
7. You plan to purchase land/home in Indonesia during your marriage

Making a Prenup

Indonesian law does not provide a ready-made framework for a prenuptial agreement. You and your lawyer have more leeway to define your future legal relationship, although you are bound by law, religion, morals, and public order considerations in drafting the agreement.
An Indonesian prenuptial agreement must be tailored to the particular needs of the husband and wife and sufficiently flexible to take into account changes in your future circumstances during the course of the marriage.

Begin by collecting all the things you want to be included in the prenuptial agreement. Ask your lawyer to draft the agreement and request his/her recommendations.

Make note that the property purchased in Indonesia will be under your Indonesian spouse’s name, pisah harta. This is necessary because foreigners are not allowed to own property in Indonesia. For mixed couples what is needed is a prenup which instigates pisah harta (separation of assets) as the rule so that a WNI spouse can legally own and hold a Surat Hak Milik on property purchased. This negates the foreign spouse being an automatic owner of 50% of the property due to the usual joint property rule for married couples in Indoneisa. This is one of the most important points of the pre-nuptial agreement.

You need to specify the percentage of the wealth that each spouse will receive if the marriage was dissolved. Included in the agreement should be 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 of assets.

Keep a copy of all drafts of the documents 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 if 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 keep careful records. A qualified accountant or bookkeeper can assist you with this task. Even if the agreement is set aside or revoked, careful bookkeeping will make it easier for the court to trace assets and will save you lots of money.
At Wijaya & Co, we provide client with prenuptial agreement questionnaire. The main purpose of this questionnaire is to gather facts and obtain client’s input on issues that should be incorporated into a prenuptial agreement. The questionnaire consists of the issues that should be considered when you enter into a prenuptial agreement. Some of you might not be ready to discuss every issue that listed on the questionnaire. Therefore, it is OK if you want the agreement is to be silent on the subject. When you are ready, the two of may sit down together, once again, to discuss the silent part(s).

Importance of Separation of Property

It can not be emphasized enough that this is one of the most essential elements in a pre-nuptial agreement. This is because Indonesian agrarian law says that ONLY Indonesian citizens can hold hak milik ownership or land/buildings. Indonesian marriage law says that assets in a marriage are joint property. The Agrarian law does not say that ALL indonesians have right of ownership but that ONLY indonesian have right of ownership. This obvious contradiction in laws is what necessitates the need for a pre-nuptial agreement .. so that an Indonesia/foreign couple can in fact purchase property in Indonesian during their marriage. With the pre-nuptial agreement the Indoensian spouse can legally own said property.

Reference: article 119 (KUHPer, Buku I, Bab VI "harta bersama menurut undang-undang dan pengurusannya", bagian 1 : Sejak saat dilangsungkan perkawinan, maka menurut hukum terjadi harta-bersama menyeluruh antara suami-istri, sejauh tentang hal itu tidak diadakan ketentuan-ketentuan lain dalam perjanjian perkawinan. Harta bersama itu, selama perkawinan berjalan, tidak boleh ditiadakan atau diubah dengan suatu persetujuan antara suami-istri. A rough translation: From the moment of execution of the marriage, there shall exist by law community of property between the spouses to the extent that no other stipulations have been made in the prenuptial agreement. Rules regarding community property cannot be revoked or amended by mutual agreement between the spouses for the duration of the marriage.

Record the Agreement

There are two registrations required for a prenuptial agreement. A premarital agreement must be recorded with the registrar’s office of the local district court, and marriage registry. The agreement will take effect for the husband and wife when the marriage recorded at the Civil Registry or the Office of Religious Affairs and shall take effect against third parties upon the date of registration with the local district court where the marriage will take place.

If the agreement is not recorded at the local district court, then the marriage will be considered as if there is no prenuptial agreement exists. Thus, your marriage will have joint-ownership in property. This is the same as if you don’t have a prenup.

Legally speaking, the pre-nuptial agreement does not have to be registered in the court but to the Capil or Kantor Urusan Agama (depending on one's religion). While many notaris/lawyers advise that the agreement be register in the local cour (Pengadilan Negeri), it isn't mandatory. The registration is low cost (approx. IDR 100.000) and well worth the further legal protection.

Death to Either Party

If your Indonesian spouse pass-away, you will have to transfer the property within one year. Transferring the property can be either sell it to other Indonesian or pass it to your children. Under 2006 Citizenship Law, children born into mixed-marriage are entitled to dual-citizenship. They can keep the two citizenships until the age of 18 years plus another 3 years to choose one. In the event they did not choose Indonesian citizenship; they will be treated as foreigner and therefore will not be able to hold the property any further. On the other hand, if the foreign spouse pass away, the Indonesian spouse can maintain ownership of the property.

Updating the Prenup

It is important to understand the need to keep the agreement up-to-date. The 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 attorney, to keep it current.

Post Nuptial Agreements

A post-nuptial agreement will not be honored in an Indonesian court. The agreement (and legal document) needs to be made before the marriage begins. Under Indonesian law, anything owned in a marriage is joint property unless it has been decided otherwise in a prenup, prior to date of marriage.

Article 147 of the Civil Code stipulates that "The prenuptial agreement shall be invalid if it is not drawn up by notarial deed, prior to concluding the marriage." Article 119 stipulates that "from the moment of execution of the marriage, there shall exist by law community of property between the spouses to the extent that no other stipulations have been made in the prenuptial agreement. Rules regarding community property cannot be revoked or amended by mutual agreement between the spouses for the duration of the marriage.

Foreign Pre-Nuptial Agreements

It may also be advised to have a pre-nuptial agreement that is valid in your country of origin (for foreign spouse) to govern assets in the foreign spouse's country of origin. It should be registered in your country, or through the consular section of your embassy in Jakarta. Both agreements are ONLY valid in the country they have been tailored for.

Updated April 22, 2011

Our thanks to Asep A. Wijaya, Managing Director of Wijaya and Co for sharing this information with the community!

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