The Difference Between Inheritance and Estate Assets

Inheritance (warisan) and estate assets (harta peninggalan) are two types of property most often associated with someone who has passed away.

Broadly speaking, both are assets that a deceased person transfers to others.

But what is the difference between the two, and how is the division between them carried out under the laws in force in Indonesia? For a complete explanation, read the overview below.

About Inheritance

According to Indonesian legal expert Wirjono Prodjodikoro in Hukum Warisan di Indonesia, inheritance concerns whether and how the rights and obligations relating to a person's wealth pass to other living people when that person dies (source: Hukum Online).

And according to the National Legal Development Agency of the Ministry of Law and Human Rights of the Republic of Indonesia, inheritance consists of rights and obligations that can be measured in money (source: Rumah).

In this way, you can conclude that inheritance is the rights and obligations transferred from a deceased person to other living people, and these rights and obligations must be measurable in money (rupiah).

Rules on inheritance are set out in law known as inheritance law, namely the regulations concerning a person's wealth after the testator has died or how assets pass to heirs (source: Kantor Pengacara).

Inheritance law is also included in Presidential Instruction No. 1 of 1991, which functions as the rule determining the names of heirs, the process of transfer, and the amounts to be divided.

In Indonesia, there are 3 (three) applicable legal bases for inheritance:

• Customary inheritance law, which takes the form of custom or norms in a particular region, is generally unwritten, and applies only to specific areas.
• Islamic inheritance law, applied by the Muslim community in the country. Islamic inheritance law is contained in Articles 171–214 of the Compilation of Islamic Law, which comprises 229 articles on the inheritance of property based on Islam.
• Civil inheritance law, generally applied to the inheritance of property for non-Muslim communities, referring to the Civil Code (KUH Perdata) (source: Hukum Online). Its provisions are set out in Book II of the Civil Code, Articles 830–1130.

Continued

For the transfer of inheritance to take place, 3 (three) core elements are required: the testator, the estate, and the heirs.

• Testator
  The testator is the person who passes on the inheritance, including rights and obligations – including debts and other obligations – to the heirs. To pass on an inheritance, the testator must have died.
• Estate
  The next element is the estate, which covers all of the testator's wealth from the time they were alive until they died.
• Heirs
  From both the Islamic and Civil Code perspectives, heirs refer to the persons who legally receive the inheritance based on the wishes of its owner. Furthermore, the Civil Code regulates who may become an heir.

Heirs must have a blood relationship with the testator. Further, heirs are categorized into the following groups (source: Hukum Online):

• Group I – the children or spouse who lived the longest with the testator.
• Group II – the testator's mother, father, or full siblings, who receive a share if there is no Group I.
• Group III – the testator's grandparents on the maternal or paternal side, who receive a share if there is no Group II, or if Group II sets aside the inheritance.
• Group IV – the testator's parents' blood relatives such as aunts and uncles, who receive a share if there is no Group III, or if Group III disregards the inheritance.

In addition, there is a category of people who are not fit to be heirs and therefore will not receive an inheritance under civil law. These four categories are:

1. A person who has been sentenced for killing or attempting to kill the testator.
2. A person who has been found guilty of or sentenced for slandering the testator regarding a crime punishable by 5 years' imprisonment or a heavier penalty.
3. A person who interferes with or obstructs the testator through violence or concrete acts to make, revoke, or withdraw a will.
4. A person who embezzles, destroys, or forges the testator's will.

About Estate Assets

Meanwhile, there is also what is called estate assets. As mentioned earlier, estate assets are likewise property left behind by a deceased person. But what distinguishes them from inheritance?

Referring to the Civil Code, estate assets are the property left by the testator in the form of their possessions and rights (source: Kantor Pengacara).

Referring to the article Ketentuan tentang Harta Peninggalan (Tarikah) dalam Hukum Islam, the Compilation of Islamic Law in Indonesia defines estate assets or tarikah (tirkah) as property left by the testator, whether in the form of material possessions they owned or their rights.

Such estate assets may consist of:

• Objects and attributes with monetary value, such as movable and immovable property and receivables (including mandatory fines and replacement money).
• Material rights, such as sources of drinking water, irrigation, and others.
• Non-material rights, such as the right of khiyar and the right of syuf'ah (a preferential right to buy for a member of an association, or a neighbor's right over a plot of land).
• Objects connected with the rights of other people, for example items the testator had pawned, goods the testator bought and paid for but had not yet received, the dowry of the wife that the testator had not handed over before dying, and others.

All such estate assets must first be reduced by the claims associated with the testator's estate, which consist of:

• Zakat on the estate.
• The costs of preparing the body for burial.
• Debts still to be settled with lenders.
• Bequests (wasiat).

Only after that does the property become inheritance. In this way, inheritance can also be defined as the testator's estate after the claims associated with that estate have been fulfilled.

This is also stated in the Compilation of Islamic Law in Indonesia, which defines inheritance as the original property plus the share of joint property after it has been used for the testator's various needs during illness until death, the costs of preparing the body for burial, payment of debts, and gifts to relatives.

Use of Inheritance

In principle, heirs may use the inheritance according to their needs. And the testator certainly leaves their property in the hope that their family, the people they leave behind, will not live in hardship and can fully enjoy the benefit and value of the inheritance, right?

Since the costs of preparing the body are one of the important factors determining the size of the inheritance for heirs, it will certainly be very beneficial for you if these costs can be minimized. One of them is the burial cost, which is certainly not small.

But how can this be done? Today, there is a funeral insurance product from Kamboja. With this funeral insurance, your burial costs are covered, along with other costs related to the funeral itself. In this way, you can reduce the overall funeral service costs so that your heirs can receive the optimal benefit from the estate you leave behind.

We hope this is helpful.