Managing Inherited Investments: A Guide for Heirs

Note: This article discusses Indonesian financial products and markets. The principles apply globally, though specific products, regulations, and tax treatments vary by country.

Your father just passed away. Amid the grief, you find a folder labeled “Investments” containing mutual fund slips worth Rp 150 million and stock documents worth Rp 80 million.

Questions arise:

• How do I claim them?
• Will there be large taxes?
• Should it be divided equally among siblings?
• Sell everything or continue holding?

Nobody teaches this in school. And when you search for guidance online, most articles are too technical or not relevant to Indonesia.

This topic is rarely discussed, but the reality is: every investor will eventually pass on their assets — or receive an inheritance.

• How do you claim mutual funds or stocks belonging to the deceased?
• Are inherited investments taxed?
• What documents are needed?
• How do you divide investment inheritance among heirs?

This article answers those questions. And for those of you who are still young and healthy — the final section on simple estate planning may be more important than you think.

Myth: Inherited Investments Are Heavily Taxed

Let’s start with good news that few people know.

Inheritance Is Not Subject to Income Tax

According to Article 4 Paragraph (3) letter b of the PPh Law (Undang-Undang Pajak Penghasilan — Income Tax Law), inheritance is not subject to income tax — as long as it was reported in the SPT (Annual Tax Return) of the pewaris (the deceased).

This means: You don’t pay income tax on the inheritance you receive, including inheritance in the form of stocks, mutual funds, bonds, or SBN (Government Securities).

But There Are Exceptions

1. BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan — Land and Building Acquisition Fee): If the inheritance is property, BPHTB of 5% is charged on the NJOP (Nilai Jual Objek Pajak — Property Tax Object Sale Value) above NJOPTKP (Non-Taxable Property Tax Object Sale Value). This does not apply to financial investments.

2. Tax on future income: Inherited stocks that generate dividends in the future are taxed as usual. Inherited bonds that generate coupons are also subject to interest tax. What is tax-free is receiving the inheritance, not the income generated afterward.

3. Assets not reported in SPT: If the deceased never reported their investments in their annual SPT, there are potential tax complications. This is one reason why proper SPT reporting is important — read NPWP for Investing.

Investment Inheritance Tax Summary

How to Claim Inherited Investments

The claim process differs depending on the type of investment.

Mutual Funds

Steps:

1. Contact the investment manager or platform (Bibit, Bareksa, IPOT, etc.) where the deceased had mutual funds
2. Prepare documents:
   • Death certificate (Akta kematian)
   • Family card (Kartu keluarga)
   • Heir’s ID card (KTP ahli waris)
   • Certificate of inheritance (Surat keterangan ahli waris) — from kelurahan (local administrative office)/notary
   • Power of attorney (Surat kuasa) — if there is more than one heir
3. Transfer or redemption process — usually takes 14-30 business days
4. Options: Transfer units to heir’s account, or redeem everything

Important note: Each platform has different procedures. Contact customer service first to get the specific document list.

Stocks

Steps:

1. Contact the securities company where the deceased had an account
2. Prepare documents:
   • Death certificate (Akta kematian)
   • Certificate of inheritance (Surat keterangan ahli waris) — notarized
   • Inheritance deed or court determination (Akta waris atau penetapan pengadilan) — for complex cases
   • Heir’s ID card (KTP ahli waris)
   • Heir’s NPWP (Taxpayer Identification Number)
3. Securities transfer process — stocks are transferred from the deceased’s securities sub-account to the heir’s sub-account at KSEI (Kustodian Sentral Efek Indonesia — Indonesia Central Securities Depository)
4. If the heir doesn’t have a securities account yet — must open an account first

Note: The stock transfer process is more complex and can take 1-3 months. Using a notary’s services is highly recommended.

SBN (Surat Berharga Negara — Government Securities)

Steps:

1. Contact the bank/platform where the deceased purchased the SBN
2. Similar process to mutual funds — death documents + heir documents
3. SBN can be transferred to the heir’s account or redeemed (if already in the redemption period)

For a complete guide on SBN, read SBN Retail: Complete Guide.

Deposits and Savings

Banks will freeze the deceased’s account until heirs present complete documents. The redemption process is usually faster (7-14 business days) because banks have standard procedures.

Inheritance Division: Two Legal Systems

Indonesia has two inheritance legal systems that apply:

1. Islamic Inheritance Law (Faraidh)

Applies to Muslims. Division is determined in detail based on family relationships:

• Husband/wife: Receives a fixed portion (1/4 or 1/8)
• Sons: Receive 2 portions
• Daughters: Receive 1 portion
• Parents: Receive a fixed portion (1/6)

Faraidh division can be calculated through the Pengadilan Agama (Religious Court).

2. Civil Inheritance Law (KUH Perdata — Civil Code)

Applies to non-Muslims or if chosen by the family. Division based on heir groups:

• Group I: Husband/wife and children — divided equally
• Group II: Parents and siblings
• Group III: Grandparents
• Group IV: Distant relatives

Testament (Surat Wasiat)

The deceased can make a notarial testament to determine specific distribution. But there are limits: the legitieme portie (forced portion) of certain heirs is still protected by law.

Recommendation: For complex investment inheritance, consulting with a notary is highly recommended. Notary fees are far cheaper than family disputes.

Simple Estate Planning: Start Now

This section is for all investors — not just the elderly. Accidents and disasters don’t choose age.

Step 1: Create an Investment Asset List

Write all your investments in a document stored safely:

Store in a place accessible to family — physical safe, or encrypted file with password known by spouse/heirs.

Step 2: Inform Your Family

This is the step most often skipped. Many investors’ assets “disappear” because family didn’t know the investments existed.

What family needs to know:

• Which platforms you invest on
• How to contact customer service of those platforms
• That they need a death certificate and certificate of inheritance

You don’t have to tell them the exact amount — just the existence and location.

Step 3: Consider Beneficiary Designation

Some platforms and investment products allow you to designate a beneficiary (heir) directly within the account. This speeds up the claim process because no court determination is needed.

Check if your platform provides this feature.

Step 4: Create an Investment Policy Statement

An Investment Policy Statement (IPS) is not just for your own investment planning — this document also helps heirs understand the strategy and reasoning behind your portfolio.

If you pass away and heirs don’t understand investing, the IPS can be a guide: should everything be sold, continued, or moved to more conservative products.

Step 5: Review Periodically

Review your asset list at least once a year — when rebalancing your portfolio is a good time. Make sure information is still accurate and family still knows how to access it.

If You Receive an Inheritance: What Should You Do?

Receiving an investment inheritance can be confusing, especially if you’re not experienced in investing. Here’s a step-by-step guide:

1. Don’t Rush

Investment inheritance is not urgent. Mutual funds, stocks, and SBN won’t disappear. Take time to understand what you’ve received.

2. Inventory All Assets

Contact all platforms that the deceased may have used. Also check the deceased’s email for notifications from investment platforms.

3. Understand What You Have

Before selling or transferring anything:

• What type of investment is it? (Mutual fund? Stock? SBN?)
• What is the current value?
• Is anything approaching maturity?
• Are there fees or taxes if redeemed now?

4. Make Decisions Based on Your Situation

Investment inheritance is not “free money” to be squandered, but it’s also not “sacred heirloom” that cannot be touched. Make decisions based on your financial situation:

• Don’t have an emergency fund yet? Redeem some for emergency fund
• Have high-interest debt? Consider paying off debt first
• Finances already stable? Maintain the investment or adjust to your own asset allocation

5. Consult If Needed

For large inheritances (>Rp 500 million) or complex family situations, consult with:

• Notary — for legal matters and division
• Tax consultant — to ensure proper SPT reporting
• Financial planner — for inheritance management strategy

Conclusion

Investment inheritance is an uncomfortable but important topic. 30 minutes of planning today can save your family months of confusion and potential disputes.

What to remember:

1. Investment inheritance is NOT subject to income tax in Indonesia — this is good news that few know
2. The claim process requires documents — death certificate, certificate of inheritance, and ID card
3. Each platform has different procedures — contact customer service first
4. Create an asset list and inform your family — don’t let your investments “disappear”
5. If receiving inheritance, don’t rush — understand first, then decide

Investing isn’t just about returns and compound interest. Investing is also about leaving something meaningful — and ensuring the people you love can receive it without difficulty.

References

1. Undang-Undang Nomor 7 Tahun 1983 tentang Pajak Penghasilan (Law Number 7 of 1983 on Income Tax), as last amended by UU HPP No. 7/2021. Article 4 Paragraph (3) letter b.
2. Kitab Undang-Undang Hukum Perdata (KUH Perdata — Civil Code), Book II on Inheritance.
3. Kompilasi Hukum Islam (Compilation of Islamic Law), Book II on Inheritance Law.
4. KSEI (Kustodian Sentral Efek Indonesia — Indonesia Central Securities Depository). “Securities Transfer Procedure Due to Inheritance.” ksei.co.id
5. Direktorat Jenderal Pajak (Directorate General of Taxes). “Tax Treatment of Inheritance.” pajak.go.id

Disclaimer: This article is for educational purposes only, not legal or investment advice. For specific cases, consult with a notary or tax consultant.

Related Articles

• How to Invest for Your Child’s Education
• Retirement Savings Guide
• Employer Pension Fund (DPLK)
• Investment Policy Statement
• Investment Tax: Complete Guide