Quick Guide to Prenuptial Agreements
What is a prenuptial agreement?
A prenuptial agreement is made prior to a couple getting married. It is an agreement to keep prior ownership of certain assets separate during the marriage. The prenuptial agreement can also keep the ownership of new property separate during the marriage so that there is no new joint ownership of communal assets. Additionally, in the context of marriage to a foreigner, a prenuptial agreement can preserve the right of an Indonesian spouse to own certain company shares and real estate property that a foreigner is not allowed to own.
When is a prenuptial agreement needed for a marriage involving an Indonesian and Non-Indonesian citizen?
When a couple marry under Indonesian law, property becomes communal property and is considered as being jointly owned. As such, any future dealings with the property will require the consent of both parties. If the marriage is between an Indonesian and a foreigner, then there are potential complications in owning certain assets. For example, if the man is a foreigner, then based on his legal status as a non-Indonesian, he is not allowed to own shares in a local limited liability company, nor is he allowed to own property that is subject to Hak Milik (Ownership Rights) title. Thus, following marriage, the Indonesian woman is burdened by the legal status of the foreign man she marries. And consequently, without a prenuptial agreement, it is argued that the Indonesian spouse cannot legally own certain shares or own certain property. [See our Quick Guide to Foreign Ownership of Property in Indonesia, and our Quick Guide to Establishing a Foreign Investment Company (PT PMA).]
What else should be considered when making a prenuptial agreement?
While prenuptial agreements are a legal way for an Indonesian partner to preserve their right to own certain shares and property, there are other legal consequences that need to be considered. For example, in the case of a divorce, what is stated in the prenuptial agreements may not reflect the reality of whose money has actually paid for assets purchased by the couple. Therefore, it is best to talk to a professional person to fully understand all the legal consequences and risks in each person’s situation.
What about a couple who did not have a prenuptial agreement before they were married?
In 2015, the Jakarta Higher Court clarified that a couple can now legally make a postnuptial agreement. A postnuptial agreement will have the legal effect that the Indonesian spouse can safely buy certain shares and certain property that a foreigner is not allowed to buy. [See our Quick Guide to Postnuptial Agreements.]
How long does it take to make a prenuptial agreement?
For a prenuptial agreement, it currently takes about 1-2 weeks from drafting to completion of the notarial deed of the prenuptial agreement. Then, the agreement must be registered and authorized by the Civil Registration office or Religious Affairs Office (for a Muslim couple), and registered at the District Court. It takes another 3-4 weeks to receive proof of registration at the Civil Registry or the Office of Religious Affairs, and proof of registration at the District court.
What are the actual deliverables that a client receives when making a prenuptial agreement?
The following deliverables will be received by a client who wishes to make a prenuptial agreement:
What are the required documents for making a prenuptial agreement?
For a prenuptial agreement, the following documents are required:
The above information is based on the following laws and regulations:
This Quick Guide is provided for general information purposes only and should not be considered as legal advice for your specific situation. Should you require legal advice, contact an attorney.
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