18 September, 2012

 

1 Is a Will a public document in your jurisdiction?
 
In principle, matters pertaining to family law in Indonesia are treated as confidential. For example, Indonesian courts will normally hear cases on marriage and Wills in closed session. The Will does not become a publicly available document, even after the testator dies and the estate is administered.
 
2 What are the principal formal requirements for a valid Will or other testamentary disposition in your jurisdiction? Please include in your answer any special requirements relating to execution.
 
Formal requirements relating to Wills and inheritance depend on the religion and ethnicity of the deceased. In Indonesia there are three principle regimes:
 
(i) the Indonesian Civil Code (“ICC”); (II) the Islamic Law Compilation (“ILC”); and (iii) Traditional Ethnic laws Ethnic laws in Indonesia are very complex and there is no uniformity of such laws (for example, Javanese laws are different from North Sumatran and Balinese laws). Furthermore, the applicability of these ethnic laws is determined by the ethnic origin of the testator, itself a potentially complex question. For these reasons it is common for a testator to waive the applicability of his/her ethnic laws. This chapter considers only Wills governed by the ICC and the ILC. The
ICC governs the inheritance of non-Muslims and those who have waived their ethnic laws. The ILC governs the inheritance of Muslims.
 
Will Requirements
ICC Wills
Disclosed
Will
(i) The settlor must verbally state his testament before a public notary;
(ii) The statement must be witnessed by at least two people (the staff of the public
notary often fulfil the role of witness);
(iii) The Will must be notarised;
(iv) The notary must read out the testament before the settlor and witnesses; and
(v) The Will must be signed by the settlor, notary and witnesses.
Undisclosed
Will
(i) It must be written by the settlor (unless the settlor is unable to write in which
case it can be written by a person under the direction of the settlor) and signed
by the settlor;
(ii) It must be placed in a sealed envelope and the envelope is shown to the notary
and witnessed by at least four witnesses;
(iii) The settlor must provide to the notary a statement that the letter in the sealed
envelope is his/her signed Will; and
(iv) The notary must prepare a deed of deposit which states that the Will is to be
kept by the notary and which needs to be signed by the settlor, notary and
witnesses.
ILC Wills  
(i) The assets covered in the Will must be given to parties (whether individuals or institutions) other
than the statutory heirs (or descendants);
(ii) It may either be made in writing or verbally by dictation to a notary and must be witnessed by at
least two persons;
(iii) If a Will is made verbally it must be made by way of dictation to a notary, who records the same
in a note;
(iv) Pursuant to Article 195 of the ILC, the distribution of the assets must not exceed one-third of the
total assets unless agreed otherwise by all the statutory heirs because, in principle, a Will can
only govern a maximum of one third of the estate (the remaining two thirds must be left to the
forced heirs); and
(v) Both statutory heirs and testamentary beneficiaries must approve the Will orally, in writing or in
the presence of a notary and such approval must be made before two witnesses. In practice, the
requirement to approve the Will is often waived by the parties, although

 

The law is silent on whether mutual Wills are recognised in Indonesia. Many commentators believe it unlikely since it would violate the testator’s right to distribute his/her assets on death.
 
3 In what circumstances will a court in your jurisdiction regard a Will as duly executed even though it does not fulfil these formal requirements (for example, because it fulfills the requirements for the execution of a Will in another jurisdiction)?
 
Indonesian courts may consider many factors such as the nationality of the deceased, the domicile of the heirs, the place where the Will was made and any choice of law expressed by the testator (although Indonesian Wills do not typically contain a governing law clause) when assessing the validity of a Will. If, for example, the choice of law and nationality of the deceased indicate that the Will should be governed by a foreign law, the court may apply such foreign law in deciding the validity of the Will, or declare that it does not have jurisdiction to hear and decide the matter. If a court decides that it does not have jurisdiction to hear the case, it is likely that the applicant would need to go back to the court of the governing law to obtain a grant of probate.
 
4 How can a Will be amended or revoked and what is the effect of marriage and divorce in this regard?
 
Under the ICC regime, an amended Will would constitute a ‘new’ Will, which must be made pursuant to the requirements set out in section two above. Pursuant to Article 992 of the ICC, a Will can only be amended by the creation of a new Will. The ICC is silent as to whether a Will can be amended by codicil and, in practice, notaries tend to apply the law in a conservative manner and would typically avoid this approach. An ICC Will can be revoked by making a statement before a public notary that the existing Will is revoked. The revocation must be dictated to a notary, who records the revocation in a note (the original note being kept at the notary’s office). Pursuant to Article 199 of the ILC, Wills made under the ILC may be revoked if the following requirements are fulfilled: 
 
(i) The beneficiary must approve the revocation;
(ii) It is advisable that, if a new Will is made to revoke the old Will, it is in a form that has more evidential weight than the existing Will (for example, if the initial Will was made verbally, a Notarial Will may be used to revoke the original verbal testament); and
(iii) If the previous Will was made in writing, it can only be revoked by another written Will, the making of which must be witnessed by two witnesses. The new Will must be made in notarial deed form.
 
The ILC is silent on how to amend a Will. Under the ICC and ILC regimes, marriage and divorce will affect a Will.
 
5 Can an overseas Will govern movable and immovable assets in your jurisdiction?
 
Yes. Article 945 of the ICC provides that the Notarial Will of an Indonesian citizen who resides overseas will be valid if it complies with the applicable laws of the place of execution. Such a Will must be authenticated by the Indonesian consulate in the country of execution. Both the ICC and ILC are silent as to whether an overseas Will can govern movable or immovable assets in Indonesia. We take the view that they can, but note that one would have to rely solely on the discretion of the court.
 
6 Would an executor or administrator appointed under another jurisdiction be recognised in your jurisdiction as having the power to collect in assets?
 
Indonesian law is silent on whether an executor or administrator appointed in another jurisdiction may execute and/or manage inheritance in Indonesia. We have not seen any foreign executor or administrator managing inheritance in
Indonesia.
 
7 Are there forced heirship rules in your jurisdiction?
 
Under the ICC, the rights of the direct descendants and ancestors (i.e. children and parents) of the deceased are protected under the legitieme portie rule. The forced heirship rules under the ICC regime are complex. To take two straightforward examples:
 
(i) Where there is one child, the rules provide for half of the deceased’s assets to be allocated to the child.
(ii) If the deceased left two children, the children would inherit two thirds of the estate.
 
The ICC is silent as to whether a spouse is protected under the legitieme portie rule.
 
A Will governed by the ICC regime that fails to account for the forced heirship rules will be valid only to the extent that it does not violate the mandatory legitieme portie rule.
 
The ILC, on the other hand, classifies forced heirs pursuant to blood and marital relationships, i.e. father, mother, son, brother, uncle, grandfather, grandmother, sister, daughter, and widow. Two-thirds of the assets must be distributed to the said forced heirs in a proportion to be decided on a case-by-case basis. Factors to be taken into account include whether the deceased has children or a living father. All other things being equal, male heirs will receive a higher proportion of the estate than female heirs.
 
Please note that both the ICC and ILC require that a Will must not provide for an arrangement which is less beneficial to the forced heirs than the legitieme portie principle.
 
8 In what circumstances can an executor, administrator or equivalent be removed?
 
An executor (pelaksana wasiat) and/or administrator (pengurus wasiat) can be removed if they have acted dishonestly or neglected their duties. The ILC further provides that a religious court may revoke the authority of an administrator (wali) if the administrator is an alcoholic, gambler, has neglected their obligations or misused their rights and authority.
 
9 Other than the failure to observe the formal requirements, how else can a Will be challenged?
 
If a Will violates the legitieme portie rules, the Will can be challenged by the forced heirs. A Will can also be challenged on the basis of fraud, undue influence, duress, mistake or lack of capacity. A testator lacks capacity if s/he is a minor or under guardianship.
 
10 If someone dies intestate, how are the assets administered and distributed?
 
Where someone dies intestate, that person’s assets should be distributed in accordance with either the ICC or ILC forced heirship rules, depending on the religion or ethnicity of the deceased (please see section seven above). Typically it will be the heirs of the deceased who apply for letters of administration and distribute the estate of the deceased.
 
11 If a Will is valid, can someone who feels they have been inadequately provided for bring a claim?
 
There is no right to maintenance under Indonesian law and a person who was financially supported by the deceased prior to his/her death has no claim to the estate by way of maintenance. An aggrieved party may challenge the Will on the basis that it falls outside of the legitieme portie rules.
 
12 Is there inheritance tax (or any equivalent such as stamp duty) in your jurisdiction?
 
Yes, taxes will apply and the amount will be determined, in part, by the type of asset inherited.
 
13 Does your jurisdiction recognise trusts or other separation of legal and beneficial ownership?
 
The concept of a trust applies in only very limited circumstances: Indonesia recognises an institution that manages inheritance (balai harta peninggalan under the ICC or baitul mal under the ILC). If the deceased leaves no heirs, the institution can take the role of administrator or, with the assistance of the court, appoint a person to be administrator. For the purposes of section fourteen to nineteen, the term “trustee” is referred to as an “administrator”.
 
14 Is your jurisdiction a party to the Hague Convention on the Law Applicable to Trusts and on their Recognition?
 
No.
 
15 Does a professional executor or trustee (or equivalent) in your jurisdiction require a licence?
 
No, a professional executor or an administrator operating in Indonesia does not require a licence. However, both the ILC and the ICC provide that the executor must be at least 18 and 21 years old respectively, and must have the ability to administer assets. If the administrator is female, she must be married and have the prior approval of her spouse. 
 
16 What are the duties of a trustee (or equivalent) in your jurisdiction?
 
An administrator’s main duty is to manage the assets under their guardianship or power of attorney properly, with the skill and care of a prudent person and using reasonable skill and care. Given the limited concept of trusts, it is unclear
whether an administrator owes any fiduciary duties to the beneficiaries.
 
17 In what circumstances can a trustee (or equivalent) be removed?
 
An administrator can be removed if they have acted dishonestly or neglected their duties.
 
18 To what extent can a trustee limit its liability in a trust deed?
 
An administrator is only authorised to perform specific actions as outlined in the relevant power of attorney or court order. The duties which the administrator owes to the beneficiary and his liability to the same can be capped by the guardianship order or a power of attorney.
 
19 How can a trustee protect itself if it needs to bring or defend proceedings?
 
There is a very limited concept of trust in Indonesia. If an administrator is able to prove that they have performed their tasks under the relevant power of attorney or court order with due care, then the administrator will not be personally liable for the cost of bringing or defending proceedings. It is not possible for an administrator to get an indemnity for the costs of those proceedings prior to such proceedings commencing.
 
20 What regime is there in your jurisdiction if someone loses capacity e.g. Guardianship Board?

 

 

If someone loses capacity (for example, because the individual is incapable of managing his/her assets due to insanity or a minor has been placed under custody), an administrator will be appointed to administer the assets of the incapable individual.
 
  

For further information, please contact:

 
Tjahjadi Bunjamin, Partner, Hiswara Bunjamin & Tandjung
 
Santi Darmawan, Partner, Hiswara Bunjamin & Tandjung

  

Narendra Adiyasa, Hiswara Bunjamin & Tandjung
 
 

Leave a Reply

You must be logged in to post a comment.