hibah (lifetime gift)
Also called: hibah wasiat
A voluntary transfer of assets while the giver is still alive, usually through a notarial deed.
What it means
Hibah is a transfer of assets from one party to another voluntarily without compensation, and is usually done while the giver is still alive. In the context of Indonesian families, hibah is often used to transfer ownership of a house, land, or money to a child. A testamentary hibah is a hibah that only takes effect after the giver dies, so its implementation is tied to inheritance. A valid hibah requires proof of ownership and should be documented in writing.
Why it matters for families
Hibah affects the division of family assets and can prevent disputes later if done clearly. However, a hibah that is not properly documented often gives rise to accusations of favoritism among family members. Families also need to understand that a hibah to a child has tax and administrative consequences, depending on the type of asset. Misunderstanding hibah can cause assets to change hands without records and be difficult to prove.
Example
For example, a father grants a plot of land to his child while still alive. They make a hibah deed before the authorized official and keep copies for all heirs. That way, when the father dies, the land is no longer part of the inherited assets in dispute. The exact figures and procedures need to be consulted with a notary.
Common misunderstanding
Many think a hibah is enough to be done by word of mouth in front of the family. In fact, without written documents and official recording, a hibah is difficult to prove if a dispute arises.