Marriage law in Indonesia governs the consequences of the assets between the couple. Article 35 of Indonesian Marriage Law (1/1974) regulates that the assets acquired or obtained during the marriage become joint property. This will lead that whenever a mixed married couple wants to buy an asset in Indonesia, it will fall into the same restriction as if a foreigner buys an asset in Indonesia. This is a very big issue for mixed-marriage couples who were already married and wanted to buy an asset without a marriage agreement in place.
The challenges that mixed marriage couples face due to these regulations are real. They are not just legal theories. They impact everyday life. Take buying a house, for example. This is a common goal in married life. However, it can become a significant hurdle due to these laws. To bring this issue to life, we will share some real-life examples. These examples highlight the impact of this issue on mixed-marriage couples in Indonesia.
Below are samples of the cases:
An Indonesian married with American nationality. The couple wanted to buy a house in May 2013 in the Bali area through home credits. However, because the Indonesian married to foreign nationality, the applications for home credits were rejected by many banks. Then, the couples decide to buy the house with cash.
Unfortunately, the couple faced a roadblock. The notary refused to assist with the sale and purchase agreement. The reason? The Indonesian partner was married to a foreigner. This meant that the transaction fell under the same restrictions as if a foreigner was attempting to own property in Indonesia. In the end, this couple could not buy the house.
An Indonesian married with Australian nationality. The Indonesian person wanted to buy a house with the rights to build title (Hak Guna Bangunan / HGB). The developer of the house contacted the Indonesian to ask whether the marriage is registered and recorded. It left the Indonesian completely shocked by such questions.
Then, the developer begins to explain. The reason for the question lies in the couple’s marital status. If the marriage is registered and recorded, the couple cannot buy the house. However, if the marriage is not registered — a situation often referred to as ‘nikah siri’ — the Indonesian partner can buy the house. The reason? Unregistered marriages are not recorded, circumventing the restrictions.
Cases Reference: Jurisprudence No. 69/PUU-XIII/2015 Year 2015 (“Jurisprudence”)
All these obstacles will still be faced by mixed couples in Indonesia until now. Therefore, you need to anticipate this situation by having a marriage agreement.
What Is a Marriage Agreement?
Article 29 Law No. 1 of 1974 concerning Marriage stated that the Marriage Agreement is a written agreement (which has been agreed upon by both parties) that is ratified by the Marriage Registrar.
The main purpose of the marriage agreement is to separate the assets between the couple so it will not fall as joint assets as stipulated in the Marriage Law.
The couples can consider including terms beyond asset separation in the agreement. However, these additional terms should not violate legal, religious, and decency boundaries.
For your reference, practically, many couples only enter into a marriage agreement will only set about the separation of the assets between the couple.
Benefits of Marriage Agreement
Other than separating the asset of mix couple, the marriage agreement may have benefits as below:
1. Debt Separation and Individual Responsibility
The marriage agreement provides a legal framework that effectively separates the debts between the couple. The separation of assets will impact the separation of the debt too. Hence, if the husband or wife has debts that are due, then the debt is on their own obligation and cannot be billed to the partner.
2. Domestic Violence Protection for Family Members
The marriage agreement can serve as a preventive measure. It offers protection for family members against domestic violence. You have the option to include terms about domestic violence in your marriage agreement. These can detail how a settlement will proceed if a party commits domestic violence.
3. Asset Management and Business Interests Protection
Specifically for mixed marriages in Indonesia, property management can be a major concern. Thankfully, simplified asset management can be achieved through marriage agreements. This advantage is especially crucial for partners who are involved in substantial business dealings or investments.
Joint assets come with certain consequences. Whenever either the wife or the husband wishes to act on these assets, such as to sell, purchase, or use them as a guarantee for a loan, it requires the consent of the other partner.
If there is separation of assets, it will no longer require any consent from the partner. For example, if one of the partners owns shares in a limited liability company and intends to sell or pledge the shares, approval from the partner is no longer required.
Furthermore, there are also risks in carrying out a business, such as bankruptcy, liabilities as the shareholder from the business, etc. The risks are only on the shoulders of the partner that carries out the business and the other partner cannot be held responsible.
4. Financial Stability and Guarantees Post-Divorce
The uncertain future of financial conditions, after a marriage ends, can be a cause of great stress. A well-structured marriage agreement provides assurance and clarity in such times of change.
The marriage agreement can regulate the terms if there is a divorce. In a divorce trial, this can be the basis for one of the parties to ask the court to give a decision in accordance with the agreement that has been made.
When Can a Marriage Agreement Be Made?
Originally, the standard practice was to establish the agreement before the marriage. This provided an opportunity to negotiate and finalize all the details pertaining to assets and financial matters well before the couple entered into the sacred bond.
However, a significant shift occurred with the issuance of the Jurisprudence in 2015. Now, mixed couples can choose to enter into a marriage agreement after they are officially married. This gives them the advantage of making informed decisions based on their evolving financial and personal circumstances during the course of the marriage.
How to Make a Proper Marriage Agreement
The marriage agreement shall be signed by the couple and shall be made in the notarial deed form. It is then followed by registering, ratifying, or recording the marriage agreement to (i) the Office of Religious Affairs or; (ii) to Department of Population and Civil Registration.
You have to make sure that all the documentation is made properly otherwise there are always consequences that the marriage agreement will not affect the other third party.
If you want to make a marriage agreement in Indonesia, whether you are married or planning to get married, CPT Corporate can help you to prepare the marriage agreement. We offer Indonesia mixed marriage service.
Should you wish to incorporate additional terms in the marriage agreement, our team is here to assist you. We offer personalized consultations to cater to your unique needs. Get in touch with our expert consultants, always ready to provide the help you need.
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