Debts, Funeral Costs, and Wills: What Is Paid Before the Inheritance Is Divided

Why Inherited Property Is Not Immediately Divided

Many families only realize one thing after a parent passes away: the property left behind does not automatically become entirely the property of the heirs. There are other rights attached to that property that must be settled first.

Al-Qur'an An-Nisa 4:11 closes the verse on the division of inheritance with the affirmation that those shares are received after the will is fulfilled and the deceased's debts are paid. So the order has been clear from the start: settle the deceased's obligations first, then divide the inheritance among those entitled to it.

The logic is simple. An inheritance is property that changes ownership. If that property is still bound by debt or a will, then what passes to the heirs is the remainder that is truly free, not the gross figure stated in the bank account or certificate.

Four Obligations of Heirs According to KHI

In Indonesia, the Compilation of Islamic Law (KHI) Book II regulates the order of obligations of heirs toward the deceased (see Article 175). The order is:

1. Manage and complete the funeral of the deceased until finished.
2. Settle the deceased's debts, including medical and care costs during the illness and tax obligations.
3. Fulfill the deceased's will.
4. Divide the remaining inherited property among the heirs.

This order is important because it determines the answer to a frequently asked question: if the money is only enough for one thing, which comes first? The answer follows the order from top to bottom. Funeral costs first, then debts, then the will.

In practice, funeral costs are usually small and reasonable — not an excessive feast. The measure is propriety, not family prestige.

Compiling a List of Debts Honestly and Neatly

Before calculating anyone's share, compile a complete list of the deceased's obligations. What needs to be on the list includes:

• Hospital costs, medicine, and care leading up to death.
• Remaining bank, cooperative, or vehicle leasing loans.
• Debts to relatives or neighbors, even without a written agreement.
• Land and building tax and other unpaid tax obligations.
• Zakat or nazar that has become an obligation and has not been fulfilled.
• Wages or employee rights that have not been paid, if the deceased had a business or employees.

For debts without written evidence, the family's honesty and the testimony of trusted people are key. It is best for this discussion to be held together, not by one person alone, so as not to raise suspicion later.

It should also be remembered that the majority of scholars are of the opinion that heirs are not obliged to bear the deceased's debts beyond the value of the estate. However, if all the property is used up for debts, there is nothing left to divide. Therefore, cases with large debts should be consulted first.

Wills: May Not Exceed One-Third

After the debts are settled, only then is the will fulfilled. KHI limits the size of a will to a maximum of one-third of the inheritance (see Article 194 KHI), unless all heirs agree to more than that after they have reached adulthood and are aware.

There are two things that are often overlooked. First, a will to a person who is actually an heir is basically invalid, unless the other heirs agree to it. Second, KHI recognizes a mandatory will (wasiat wajibah) for adopted children and adoptive parents, the amount of which also does not exceed one-third of the property (Article 209 KHI).

Because the discussion of wills touches on differences of opinion among scholars and depends on the wording of the will document, if such a document exists, seek the view of the Religious Court or a ustadz you trust before the property is divided.

Simple Calculation Example

Pak Hadi passed away. He left a wife (Sari), a son (Rian), and a daughter (Dewi). His estate is Rp600,000,000. What must be settled first:

• Funeral costs: Rp10,000,000
• Hospital and cooperative debts: Rp30,000,000
• Will to an orphanage: Rp20,000,000 (still below one-third)

Net property: Rp600,000,000 − Rp60,000,000 = Rp540,000,000.

Because there are children, the wife receives 1/8: Rp67,500,000. The remainder of Rp472,500,000 is divided between the son and daughter in a 2:1 ratio — Rian Rp315,000,000 and Dewi Rp157,500,000.

Note: the figure of Rp600,000,000 is never divided directly. What is divided is the remainder after the obligations are settled. If there was previously joint property (gono-gini), the share of the surviving spouse is separated first before the steps above are calculated.

Practical Steps Before Dividing

1. Record all property in the deceased's name: savings, land, vehicles, shares, receivables.
2. Collect evidence of debts and bills, then compile an ordered list along with their amounts.
3. Settle the funeral costs and debts, keep the proof of payment.
4. Check whether there is a will document; make sure its value does not exceed one-third.
5. Only then calculate each heir's share from the net property, and put the agreement in writing.
6. If there are large debts, a complicated will, or a dispute between family members, consult the Religious Court, a notary/PPAT, or an ustadz.

To make the fifth step easier, IndoWaris can help draw the family tree and calculate each heir's share from the net property you have determined, so that the figures discussed in the family are no longer estimates.

This article is general information, not a fatwa and not legal advice. Every family has different circumstances, and the final decision should be made together with the heirs and competent parties.