A prenuptial agreement, often referred to as a "prenup agreement" or "prenup" is a legal contract that regulates the separation of wealth and often financial management in a marriage entered into by a couple before they get married.
Given its characteristics, in Indonesia, many people still see this as taboo. However, in many countries, a prenup agreement is often a requirement before a couple enters into a marriage.
In practice, a well-crafted prenup has various benefits, particularly to protect assets and business that someone or their spouse already has before the union. Additionally, a prenup agreement can also enhance trust and harmony within a marriage, ensuring that one of the couples enters into the marriage “sincerely”, and not solely for wealth or clearing debts.
You are on the correct page if you are in one of the following situations:
You are an Indonesian citizen who is getting married to another Indonesian citizen;
You are an Indonesian citizen who is getting married to a foreign citizen in Indonesia;
You are a foreign citizen who is getting married to an Indonesian citizen in Indonesia.
In this article, we will explore frequently asked questions by both foreigners and Indonesian citizens about prenuptial agreements in Indonesia, including:
What is a prenuptial Agreement?
Why do you need a Prenuptial Agreement?
What can be agreed in a Prenuptial Agreement?
What cannot be agreed under a Prenuptial Agreement?
When to make the Prenuptial Agreement?
How to make and register a prenuptial agreement in Indonesia?
What is a Prenuptial Agreement?
According to Article 29 Paragraph 1 of Law No. 1 of 1974 on Marriage (“Marriage Law”), a prenuptial agreement is essentially a written agreement made by prospective husband and wife before or at the time of marriage.
The Marriage Law stipulates that all the assets and liabilities that the couple obtained in the marriage will become joint assets and liabilities. Therefore, normally prenup agreement is made to determine the ownership of assets and the division of property should the marriage end in divorce, as well as to separate the financial liabilities that each spouse has carried before or during the marriage.
The rules regarding the preparation of prenuptial agreements are contained in the Civil Code and the Marriage Law. Article 139 of the Civil Code explains that the future husband and wife with a marriage agreement can deviate from the statutory regulations regarding joint property, provided that it does not conflict with good morals, public order, and several applicable provisions.
It is also important to note that in Indonesia, a prenuptial agreement is optional, not "mandatory" if it is not desired. However, without a prenuptial agreement, as explained in Article 146 of the Civil Code, with certain limitations, the wife's earnings and income are under the control of her husband.
Why do you need a Prenuptial Agreement?
For couples who are getting married in Indonesia, having a prenuptial agreement can bring various benefits. These are among others:
As a guarantee for the security and the interest of the business. This agreement can be used to mitigate the business's specific challenges if one particular couple has a significant business or asset before or during the marriage. If there is any problem or death, this agreement can indicate how business profit will be managed and how the separation of property will take place to ensure that every couple's needs are met.
Ensuring the continuation of the family inheritance. While Article 35 paragraph (2) of the Marriage Law explains that the inherited property of each husband and wife and the property obtained by each as a gift or inheritance are under their respective control as long as the parties do not determine otherwise, but with the prenuptial agreement, it can be reaffirmed so that it is ensured that no family gifts or inheritances will move. This is because in practice, if the spouse who owns the family inheritance dies, the inheritance will be owned by the surviving spouse. Not to mention that there is a possibility of the couple remarrying, so the family inheritance will be lost and this potentially can cause a dispute. An agreement also guarantees that the assets obtained from inheritance or hereditary family heirlooms remain in the relevant spouse’s control.
Organizing the division of property in case of divorce A prenup agreement can be used to regulate the division of property during the marriage and in the event of divorce or the death of either spouse. And also can avoid problems that may arise in the future relating to joint property, inheritance, or assets owned by each spouse before marriage.
Giving an honest and sincere impression in a relationship The establishment of a prenup agreement can avoid the insincere intentions of prospective spouses who might have the intention of paying off their debts through the wealth from the marriage. In some instances, the sweet promises of prospective spouses before marriage might not be entirely true, and often problems arise after the marriage takes place. A prenup agreement can protect someone from such unhealthy intentions, that their future spouse would never have expressed before.
What can be agreed in the Prenuptial Agreement?
The content of a prenuptial agreement can vary depending on the preferences and needs of the couple getting married. In general, here are some of the contents of a prenuptial agreement:
Property Ownership. Prenup can regulate the separation or pooling of property between husband and wife. And also the division of property owned before the marriage and how property acquired during the marriage will be managed and divided in the event of a divorce.
Roles, Rights, and Obligations. This agreement can also contain the division of roles, rights, and obligations in the household. And also the duties and responsibilities of each spouse in meeting the needs of the family, including financial responsibilities, household management, and child care.
Child Custody Rights In case of divorce or infidelity, this agreement may contain provisions regarding child custody. This includes a determination of joint or sole custody, as well as the financial obligations that each must fulfill regarding the children.
Income Setting. This agreement can also govern each spouse’s income, including income earned during the marriage. This includes income sharing, financial management, and financial obligations that each spouse must fulfill.
Separation of Debt. In case one spouse had debts before the marriage, a prenuptial agreement can include the separation of those debts. And also, the debt remains the responsibility of the individual with the debt, rather than a joint responsibility of the couple.
What cannot be agreed under the Prenuptial Agreements?
Although the contents of a prenuptial agreement are not specifically regulated, the Civil Code regulates several things that are prohibited in a prenuptial agreement. The matters or provisions referred to are as follows.
Must not be contrary to decency and public order This is as explained in Article 139 of the Civil Code which states that the prospective husband and wife with a marriage agreement can deviate from the statutory regulations regarding joint property as long as it does not conflict with good morals, public order, and several applicable provisions.
Must not reduce husband's rights This is as explained in Article 140 of the Civil Code which states that a marriage agreement may not reduce the rights of the husband, both as a husband, as a father, as the head of the household, and other rights as regulated by law.
Must not arrange inheritance This is as explained in Article 141 of the Civil Code that the prospective husband and wife in the agreement may not give up the right to inherit their descendants nor may they regulate the inheritance.
Must not be one-sided in terms of debt This is as explained in Article 142 of the Civil Code that they (the prospective husband and wife) may not make an agreement that makes one party have a debt obligation greater than his share in the profits of the joint property.
Must not use "foreign" law as the basis for marriage law This is as explained in Article 143 of the Civil Code that they (the prospective husband and wife) may not agree in passing, that their marriage bond will be governed by laws or foreign codes.
Generally, prenuptial agreements are required and made in the following circumstances. If there is a greater amount of wealth in one of the parties or each party has its own business, the agreement is made so that the other party is not involved if the other party is bankrupt.
When to make the Prenuptial Agreement?
As we mentioned above, Article 29 of the Marriage Law states that a prenuptial agreement is to be made at the time or before the marriage takes place. Further, this agreement must also be legalized by the notary or marriage registrar at the civil registry office.
However, in its development, the Indonesian Constitutional Court through its decision no. 69 of 2015 amended this stipulation and provides an opportunity for married couples to be able to make a nuptial agreement during marriage or what is commonly known as a Postnuptial Agreement, as long as the couple is still bound in a legal marriage. This Postnuptial Agreement must also be legalized by a notary or marriage registrar at the civil registry office.
How to make and register the Prenuptial Agreement in Indonesia?
In Indonesia, making a prenuptial agreement requires certain protocols to ensure its enforceability.
Firstly, the agreement must be drafted in writing. it is also essential that they sign this document in the presence of a notary to validate it.
While notaries typically offer a standard template for prenuptial agreements, it's recommended for couples to seek legal advice or representation from a lawyer during this process to ensure the agreement is tailored to the couple's unique needs, especially when they come from different nationalities and have significant interests to protect.
Once the prenuptial agreement is notarized, it should be registered with the marriage registrar at the civil registry office where the wedding will take place.
Learn more about the requirements to get married in Indonesia, the process, and the legal implications in our article Getting Married in Indonesia.
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