What happens to your Bali property when you die?

This is the question buyers put off and the one with the least forgiving consequences, because by the time it matters you are not there to fix it.

Your home country will is not enough

A will made in Australia, the UK or elsewhere is not automatically effective over Indonesian assets. Even where it is recognised in principle, the practical process — obtaining recognition, translating and legalising documents, satisfying an Indonesian notary and the land office — is slow, expensive and uncertain.

The workable answer is an Indonesian will dealing specifically with your Indonesian assets, executed before an Indonesian notary, alongside your home country will. Both documents need to be drafted so they do not conflict.

The foreign heir problem

A foreigner cannot hold Hak Milik, Indonesian freehold. That rule applies to inheritance as much as to purchase.

Where a foreigner becomes entitled to Indonesian freehold through inheritance, disposal rules apply within a defined period. If the heir does not transfer it to someone who can lawfully hold it within that window, the position deteriorates and the land can fall to the state.

This catches mixed-nationality families hardest. An Indonesian spouse holds freehold, dies, and the foreign surviving spouse or foreign-national children inherit something they cannot keep, under a clock they did not know was running, in a language they do not read.

Leasehold: the clause that decides it

For a leasehold, the question is much simpler and just as often missed.

Does the deed bind your heirs and successors?

If yes, the lease passes to your estate and your heirs hold the remaining term. If the deed is silent — and many are — the lease may simply end with the lessee, and everything you paid for disappears.

This is one line of drafting. It costs nothing to include at signing and cannot be added unilaterally afterwards. Check it on any lease you already hold, and if it is missing, approach the landowner now rather than leaving it.

The related point: the lease should also permit assignment, so heirs who do not want the property can sell the remaining term rather than being stuck with it.

Hak Pakai

Hak Pakai is a registered right and it does pass on death. The heir must be someone who can lawfully hold it, which for Hak Pakai means a foreigner with the required residency, or the right is subject to disposal rules.

An heir living in London who inherits a Hak Pakai over a Bali villa and holds no Indonesian residency has a problem with a deadline attached.

PT PMA shares

Shares in an Indonesian company pass as shares, which is more straightforward, but:

The heir becomes a shareholder in a foreign-investment company with filing obligations, LKPM reporting and tax returns, whether or not they want it.

The company's ability to hold what it holds still depends on the foreign ownership rules for its activity.

And the company keeps accruing obligations during probate, which can take a long time. A company nobody is filing for accumulates penalties throughout.

Name someone who can act. A company with no reachable director during an estate administration is a genuine problem.

What to actually do

Make an Indonesian will before an Indonesian notary, covering your Indonesian assets and consistent with your home country will.

Check your lease binds heirs and successors, and permits assignment. If it does not, negotiate it now.

If you are in a mixed marriage, get the prenuptial or postnuptial agreement in place. It is the document that keeps an Indonesian spouse's freehold clean and it is far harder to arrange after the fact.

Tell your family where the documents are. The deed, the certificate, the permits, the PBB receipts, the tax filings, the notary's name and contact details. An heir who does not know the notary or cannot find the deed faces a difficult task in a system with no register to fall back on for a leasehold.

Name someone who can act in Indonesia, and make sure they know it.

Review it when circumstances change — marriage, divorce, children, a change of residence, a new property.