The term inherited assets is certainly no longer unfamiliar to all of us. This is because inherited assets are the estate of a person that is given or bequeathed to others who are entitled to such inherited assets.
However, managing inherited assets is not as easy as you might imagine. In Indonesia itself, there are several inheritance laws that underlie the distribution of inherited assets, which are certainly important for you to understand.
In this article, we will explain further about what inherited assets are, the laws of inheritance distribution, as well as tips for managing inherited assets wisely.
Key Takeaways:- Inherited assets are all assets left by the testator (the person who passed away) and bequeathed or inherited to the heirs who are entitled to receive the inheritance or appointed by the testator.
- There are three types of inherited assets that can be received by a person, namely personal assets, acquired assets, and joint assets.
- The following are 3 inheritance laws that apply in Indonesia, including customary inheritance law, Islamic inheritance law, and civil inheritance law.
Definition of Inherited Assets
Inherited assets are all assets left by the testator (the person who passed away) and bequeathed or inherited to the heirs who are entitled to receive the inheritance or appointed by the testator.
The definition of inherited assets according to the National Legal Development Agency (BPHN) of the Ministry of Law and Human Rights of the Republic of Indonesia is assets in the form of rights and obligations that can be valued in money. This definition means inherited assets refer to the estate given to heirs or related family members when a person passes away.
The distribution of inherited assets can be divided using several methods determined by the parties of heirs. This is chosen based on the form of inheritance law that has been mutually agreed upon.
Planning the distribution of inherited assets is important to be done by the parties of heirs because if it is not planned before passing away, then all assets will later be inherited automatically by law.
Types of Inherited Assets
There are 3 types of inherited assets that can be received by a person, including:
- Personal assets are assets owned by a person before marriage. For example, someone buys a car
- Acquired assets are assets that will be obtained by a person from their parents, which can be in the form of inheritance or other forms.
- Joint assets are assets owned by a person and their spouse when they are married.
3 Types of Inheritance Laws Applicable in Indonesia
As previously explained, inherited assets will be inherited by law if the distribution of inherited assets is not planned before passing away. The following are 3 inheritance laws applicable in Indonesia, including customary inheritance law, Islamic inheritance law, and civil inheritance law.
Customary Inheritance Law
Customary inheritance law is a type of inheritance law that is believed and practiced by certain tribes in Indonesia. This type of inheritance law may generally not be written, but is strictly adhered to by its people, and there will even be sanctions imposed on those who violate this law.
The type of customary inheritance law is greatly influenced by kinship relations and social structure with diverse types of inheritance. The following are systems that influence customary inheritance law.
Lineage System
This customary inheritance law system is divided into three types based on family lineage. The division of lineage systems includes the father's lineage, the mother's lineage, and the lineage of both.
Individual System
The individual system refers to the distribution of inheritance based on the portion that each individual will receive. This customary inheritance law system is widely applied by the Javanese community.
Collective System
The form of collective system inheritance is a system where each heir has the right to receive or not receive the inheritance. Usually, people use this type of inheritance form for heirloom items belonging to the community.
Majorat System
The majorat system is an inheritance distribution system given to the eldest child as the family leader. This inheritance distribution system is implemented by the people of Lampung and Bali.
Islamic Inheritance Law
Another type of inheritance law applicable in Indonesia is Islamic inheritance law. The distribution system of inherited assets according to Islamic inheritance law is based on the bilateral individual principle, which means heirs must come from the line of Father or Mother (biological).
The distribution of inheritance according to Islamic law has been regulated in Law Number 3 of 2006 concerning Religious Courts. Based on Islamic law, the procedure for distributing inherited assets is based on heirs who are entitled to receive inheritance, which is divided into 5, namely:
Daughter
If the testator only has one daughter and does not have a son, then the daughter can become an heir. With this distribution procedure, the daughter is entitled to receive half of the total assets left by the testator, namely the father.
For testators with two or more daughters, they will receive two-thirds of the total inheritance value, which will then be divided equally for the two daughters concerned.
Wife
In addition to daughters, wives can also become heirs. From the total value of inherited assets left by the testator, the wife as an heir is entitled to receive inherited assets as much as one-quarter of the total value.
This inheritance distribution rule only applies if the testator and his wife do not have children. If the testator and the heir wife have children, then the wife or widow will receive one-eighth portion of the total value of assets left behind.
Father of the Testator
According to Islamic law, the father of the testator is also an heir party who has the right to receive one-third portion of the total assets left by his child.
The father can receive money in that amount provided that the testator does not have children. However, if the testator has children, the father is only entitled to receive one-sixth portion.
Mother of the Testator
This heir can obtain her rights if the testator does not have children. Thus, the mother of the testator is entitled to receive one-third of the total inheritance.
Similar to the father of the testator, if the testator has children, then the mother is only entitled to receive one-sixth of the total assets left behind.
However, this only applies if the mother of the testator does not live together with the father of the testator or the father of the testator has passed away. If they live together, then the mother of the testator will receive one-third of the total amount of inheritance.
Son
The last party who may become an heir is the son. The son has a greater right to receive the total inherited assets compared to his sister. In fact, the amount of inheritance received by the son can reach twice the total value of inheritance received by the daughter.
The son is also entitled to receive half of the total value of his inheritance if the testator only has a single son. Then, the remainder is distributed to other parties according to applicable Islamic law.
Civil Inheritance Law
The last is the most common law in Indonesia, civil law. In civil inheritance law, it is stated that an heir or family with descendant and kinship relations can only receive inheritance written in the will. For example, children, parents, siblings, grandparents, and siblings from that lineage.
Civil inheritance law also uses the individual principle, which means each individual heir is entitled to receive inherited assets according to their respective portions. Referring to the will, the parties who become heirs are the people recorded in it.
Tips for Managing Inherited Assets Well and Effectively
Many people will be confused when receiving inherited assets or wealth in large amounts. Of course, you want to use the wealth you have to fulfill desires, for example to buy a dream car, dream house, and other personal collections.
However, it would be better for you to postpone the purchase and learn to manage inherited assets well and effectively. Below we have provided various tips for managing inherited assets:
Make a plan in managing inherited assets
The first step you should take is to make a plan before or when receiving inheritance. You can plan whether the inherited assets want to be used for investment either in the form of property, jewelry, or other assets. In fact, you can also make business plans using the inherited assets.
Communication with family
If you are confused about how to manage inherited assets well, then you should immediately ask for advice and input from the closest family. This aims to avoid wasteful spending.
Pay off debts owned
The next thing you can do is immediately pay off debts owned, both debts that are consumptive or productive. This aims to improve your quality of life and be free from debt.
Manage into an emergency fund
The tip most often used by most people is to manage inherited assets into an emergency fund. An emergency fund itself is a financial post that is important and must be owned by everyone to meet urgent needs. For example, used for living costs when affected by layoffs, medical costs when not having insurance, and so on.
Manage inherited assets into investment
Inherited assets could be in the form of land and buildings. You can make these inherited assets a long-term investment. This is certainly profitable because the selling price of land and buildings always increases over the years.
Different from inherited assets in the form of money. You can invest it into other valuable assets that are safer and have resale value compared to saving in ordinary banks. The assets referred to such as gold, mutual funds, deposits, and others. However, you can also set aside inherited assets to be allocated to other beneficial things.
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