Secure Your Bali Property & Assets: Your Last Will & Testament in Indonesia
Bali Nirmana Property is a real estate agency, and in no way intends to present itself as a definitive source for legal advice. We have taken on this topic because several of our investors have raised the issue in the last quarter, and as the laws in Indonesia evolve, we thought it best to speak with some experts and lay out some rough guidelines pointing to the right questions we all need to ask as we look to secure that for which we have worked so hard over the years.
While we do have significant experience in guiding our investors towards the best legal course of action, we are in no way offering our advice on these matters. We highly recommend that if this topic is relevant for you (and why wouldn’t it be?) that you seek out the best legal counsel that you can find.
Most of us do not want to think about it for any longer than we have to, but one day we will shake this mortal coil and head on towards whatever comes next. Hopefully, we will be well on in years and content looking back at our island life with a great smile. However, we surely ought to be prepared for the unexpected and the inevitable.
You’ve invested plenty of your time, effort and money into buying that/those beautiful villa(s) in Bali or other properties in Indonesia. Wouldn’t it be a shame if, upon your passing, the assets you hold in Indonesia end up in the hands of people you never even met? What a pity that would be! This is why you need to state your last will and testament – both at home to be sure, but also in Bali as well – to ensure that your properties fall back into the hand of people you love.
The topic of last wills is very much like so many legal issues here in Indonesia. Subjective interpretation seems to play too large a role in determining the suggested course of legal action. We checked around with several Notaries and Property Lawyers with whom we have worked over the years and each of them (thankfully) referred to the precise legislation covering the topics about which we asked.
The consensus is that as long as you make a proper Indonesian will that is formerly registered, a Hak Sewa/Leasehold property can lawfully be left to any named beneficiaries regardless of whether or not they are registered KITAS (residency visa/permit) holders. Which is to say, that anyone whom you name as your beneficiary can assume the leasehold rights you’ve enjoyed over the years while on a tourist visa or better.
For a Hak Pakai di atas Tanah Negara property ( or simply Hak Pakai), if the named beneficiary is not an Indonesian Citizen, they have 12 months to determine how to manage the asset going forward. They can sell the property to either an Indonesian or a foreigner who holds a KITAS, or they are free to obtain a KITAS for themselves and carry on the family tradition.
If the asset is held under an HGB title by a company registered in Indonesia, then the company shareholder agreement will have covered the transfer of shares upon the passing of the named shareholder.
A Notarial Deed is What You Need
The local law states that every citizen and every foreigner who is a resident in Indonesia can sign their last will and testament. You have to make a Notarial Deed and register it at the Ministry of Law and Human Rights in Indonesia.
Who Can Inherit My Bali Villa?
Can you choose anyone to inherit your villa? Stated in article 863 (Kitab Undang-Undang Hukum Persada – Civil Code of Indonesia), testators can only leave 1/3 of their total assets in Bali to someone who is not blood-related. 2/3 must go to your spouse, children or parents.
Everyone has to have their own last will. Married couples can not combine their last will and testaments.
How About Inheritance Tax?
There is no inheritance tax in Indonesia.
Mixed Marriages and Property Ownership in Indonesia
In the process of buying land in Bali and buying properties, you have already learned that in fact, foreigners are not allowed to own land or property in Indonesia in teh same way that an Indonesian citizen can – they can only lease it for an extended period of time or acquire a “freehold” property and convert the title to Hak Pakai or Hak Gunan Bangunan if they own a company. So, how does this work with mixed couples? What happens with the properties/land when the Indonesian partner passes away? Good question! Usually, a prenuptial agreement has been made acknowledging that the foreign partner is not eligible to inherit properties that are registered under a Hak Milik (Right to Own) title. The foreign partner has 1 year to either sell it or pass is onto his/her kids with Indonesian citizenship. Do note, Indonesia does not allow dual citizenship. Once the kids turned 18, they’ve got 3 years to choose their citizenship.
Did you inherit a villa? A new notary deed may have to be made for the lease under your own name.
A valid will and testament is essential if you want to be absolutely sure that your Bali properties are safe and inherited by people that you choose. A valid will and testament puts you in control of your assets and heirs, keeping your investments and properties safe and it will save you and your family a great deal of unnecessary hassle and headaches.