Postnup Agreements are Now Legal


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An Indonesian, who is married to a foreign citizen, is allowed to own Indonesian property (Hak Milik or Hak Guna Bangunan), with a notarial prenup or postnuptial agreement in place, which separates assets between husband and wife (pisah harta).

 

 

Before this ruling, should an Indonesian (who is married to a foreigner, without a prenup) inherit a property with Hak Milik or Hak Guna Bangunan land title, the Indonesian would be compelled to sell the property within one year. Otherwise, the property could become National Land.

Now, postnuptial agreements are legal, in accordance with the ruling made by the Indonesian Constitutional Court, Number 69/PUU-XIII/2015 (Postnup Ruling), announced on 27 October 2016. The couple could sign a postnup agreement allowing the Indonesian to keep the property.

The Director General of Citizenship and Civil Registrations, Prof. Dr. Zudan Arief Fakrulloh, on 19 May 2017, has issued a letter outlining the implementations to register nuptial agreements (pre and post) with the Indonesian Civil Registry offices.

In the past, the reason or legal basis for postnup agreements before the Postnup Ruling were due to:

- Civil Code Article 1320 on the validity of a contract;
- Civil Code Article 1338 on freedom to enter into contract; and
- Civil Code Article 168 on Marriage agreement, this clause does not state explicitly that such agreement is prenup or postnup.

 

However, Article 168 has been nullified by the provisions in Article 66 of Law 1/1974 on Marriage (Marriage Law).

For the marriage and everything related to marriage, based on this law since its validity, including the provisions stipulated in the Law of the Civil Code (Burgerlijk Wetboek), Ordinance Marriage Indonesia Christian (Huwelijks Ordinance Christen Indonesiers S.1933 No. 74), Mixed Marriage Regulation (Regeling opde gemengde Huwelijken S. 1898 No. 158) and other laws regulating marriage to the extent provided for in this Law shall be invalid.

 

Therefore, after 2 January 1974, all basis of marriage and marriage agreements must follow the Marriage Law. Marriage Law, since its announcement, states in Article 29 that only prenup agreements are recognized, and prenup agreements may be revised during marriage. It does not recognize postnup agreements (signed without a prenup agreement in place) prior the announcement of the Postnup Ruling.

 

Furthermore, stated in page 154 of the Postnup Ruling, the Constitutional Court Judges made the following consideration:

The phrase “in time or before the marriage takes place” stated in Article 29 point (1), the phrase “…since the marriage takes place” in Article 29 point (3), and the phrase “during the marriage” in Article 29 point (4) of Law 1/1974 limits the freedom of 2 (two) individuals to enter into or the point in time of performing an “agreement”, therefore it is contradictory with Article 28E point (2) of the 1945 Constitution as argued by the Petitioner. Thus, the phrase "at the time or before the marriage takes place" in Article 29 point (1) and the phrase "for as long as the marriage continue" in Article 29 point (4) of Law 1/1974 is contradictory with the 1945 Civil Code on the condition it is not interpreted as during the marriage.

 

In laymen terms, the Judges are stating that Article 29 point (1), point (3) and point (4) are against Civil Code 1338. Hence, this also means that any private actions taken before this Postnup Ruling is against the law, because changes to the Marriage Law, ie. Article 29 point (1), point (3) and point (4), were made with the Postnup Ruling, announced on 27 October 2016.

 

Please note, that if you have signed a postnup agreement, please be aware that if the agreement was signed before the announcement of the Postnup Ruling on 27 October 2016.

 

It may be deemed invalid (against Marriage Law and the Postnup Ruling).

 

In the future should you wish to enter into a postnup agreement, please be aware of the content of the notarial deed, as they may be constructed in a way that might affect the recognition of an Indonesian Citizen's right to own Indonesian company shares, Hak Milik and Hak Guna Bangunan property.

 

With a postnup agreement in place, an Indonesian in a mixed marriage with a Citizen of another country may receive (be it from gift or inheritance from parents) or buy Indonesian Company shares and Indonesian Property, as well as bequeath such assets to family members in a will for estate planning.

 

There are some tax consequences when sign a postnup agreement.

 

If you need more info please contact us.