As if expat life were not fraught enough with challenges and complications, families of those who invest in properties here face further complications in the sad event that the property owner passes away without a Will.
What are the most common inheritance concerns of clients who own property here and what are the solutions?
The most common concerns are from expatriates who have bought property here either in their sole name or jointly with their spouse, and are confused as to which inheritance laws apply to their assets upon their demise. They usually assume that the laws of their home country automatically prevail over local UAE laws. As a general rule, inheritance issues in such cases are dealt with in accordance with Sharia. Succession under Sharia principally operates by a system of forced heirship. For non-Muslims, they now have the option of registering a Will with the DIFC and Wills Probate Registry (DIFC WPR) which will provide certainty in passing their Dubai estate to their chosen heirs or they can transfer unencumbered real estate into an offshore company. The solutions offered depend on each individual case; hence, legal advice should be sought from the outset.
Why is it important for expats living in the UAE to have a Will, and what are the consequences of not having a Will
in place?
For expats living in the UAE, there is a very simple reason to make a Will as generally, the UAE Courts will adhere to Sharia Law where there is no Will in place in the UAE. This means that if you die without a Will here, the local courts will examine your estate and distribute it according to Sharia law. All personal assets of the deceased, including bank accounts, will be frozen until liabilities have been discharged. A surviving wife who has children qualifies for one eighth of her deceased husband’s estate, and a surviving husband who has children qualifies for one quarter of his deceased wife’s estate. The remainder of the estate will be distributed among other family members, depending on who survives the deceased at the date of death. Without a Will or succession planning in place, this distribution will be applied automatically. Even shared assets will be frozen until the issue of inheritance is determined by the local courts. There is also no automatic transfer of shares where businesses are concerned. Administering an estate in the absence of a Will is often lengthy, costly and complex, not to mention the prolonged disputes with heirs.
Recently I have heard about the new DIFC Wills and Probate Registry. How does the formation of the registry help expatriates with assets in Dubai?
The new DIFC Wills and Probate Registry provides a mechanism for non-Muslims with assets in Dubai only to pass on their assets according to their wishes. The rules provide non-Muslims, resident and/or non-resident in Dubai with the option and right to choose the way in which their assets are distributed; they will have the freedom to distribute their assets as they wish. As a “common law” jurisdiction, the use of the DIFC WPR procedure provides certainty and offers a speedy administrative process of a deceased non-Muslim’s estate in Dubai. This is further reinforced by the cooperation process agreed between the DIFC Dispute Resolution Authority and the Dubai Land Department, which will facilitate the smooth transfer of property during the stage of succession. In turn, this will boost confidence, capital investment and economic growth.
Nita Maru is a British qualified solicitor and Managing Partner of TWS Legal Consultants. Call 04-4484284, visit www.twslegal.ae or email info@twslegal.ae.