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Herman is an entrepreneur in the garment industry who has been successful for the past 3 months. However, due to the less favourable economic condition recently, his business which he set up with his wife, took a direct hit and went bankrupt.

To make matters worse, Herman still has obligations to the bank, his employees, and the tax office. In such situation, Herman’s family’s financial condition is also disrupted because his assets and his wives are considered joint assets. As a result, Herman’s debt obligations are also his wife’s.

This type of story could have been avoided if Herman and his wife had drawn up a prenuptial agreement. Under Law Number 1 of 1974 on Marriages has been establishing provisions that separation of assets can be arranged prior to a marriage. Also, the Constitutional Court has only recently passed a decision that a nuptial agreement can be arranged after the wedding.

Decision Number 69_PUU-XIII_2015 was passed after Mrs Ike Farida, an Indonesian citizen from East Jakarta, filed a petition for material review on Article 29 paragraphs (1), (3) and (4) as well as Article 35 paragraphs (1) of Law Number 1 of 1974 on Marriages.

With such decision passed, every nuptial agreement drawn up after a husband and a wife are united in marriage, is binding as from the date on which the nuptial agreement takes effect. This agreement does not only apply to married couples entering into the nuptial agreement, but also to any third party entering into the nuptial agreement.