New Law for Wills Provides Substantial Benefits To Non-Muslim Expats (and even some benefits to Muslims)
A ground-breaking set of new personal laws will come into force in the UAE in February 2023. Amongst them, is the shift to flexible regime for non-Muslim foreigners in Dubai and the UAE to implement the regime set out in the new Decree Law or their home country’s laws. This will bring considerable comfort to those with assets in the country and families, who might have previously been subject to the prevailing Sharia Law rules on inheritance and matters of child custody.
Wills Must Be Registered
It is imperative that Wills are registered with the relevant authority. In Dubai, there are currently two main options: the Notary Public – Dubai Courts and the DIFC Wills Register.
Dubai Courts
The main advantage of using the Dubai Courts is that the Will is enforceable in all Emirates. The document shall, however, need to be translated to Arabic.
DIFC Wills Register
Wills registered in DIFC can be written and registered in English, however, they will only be valid in the Emirates of Dubai and Ras Al Khaimah.
With the advent of this new decree, it remains to be seen whether the Dubai authorities will create a new register that may provide greater access, with a combination of Wills written in English and a Register that does not have the arguably prohibitive costs of DIFC.
Intestacy has huge implications
If an expat dies without having a registered will, the current position is that the courts will either apply Sharia Law or (on application) the law of the person’s home country. However, to use the home country laws, one must go through considerable expense in proving the home country’s law to the Dubai court, by way of attested copy of the law, as well as providing an Arabic translation of the said provisions.
The simple act of some planning and the registration of a will can, therefore, have huge benefits in providing clarity for the financial and personal (child custody) situation of your loved ones, at a time when they need it most.
Why is a Will Necessary?
In addition, to all the usual financial matters that make a Will necessary, there are a number of matters that cannot or cannot easily be resolved even by attempting to apply one’s home country law:
Real Estate
The default position for real estate is that it will be distribute by Sharia Law, unless a Will is in place that names a beneficiary for that particular property.
Child Custody and the Guardian of Minors
A will ensures that a child, under the age of 21, is cared for by someone you trust. It is not automatic, under Sharia Law, that guardianship of children is given to a surviving spouse (particularly in the case of a deceased husband). This can create serious stress and complications, when they are least tolerable. Having a Will in place will provide certainty in these difficult circumstances.
Joint Bank Accounts
Where there is no registered Will in place, even joint bank accounts, and the funds held therein, shall become inaccessible. The accounts will remain frozen until distributed by the courts by the principle of Sharia Law. This highlights the necessity of any foreign national to have a Will in place so that funds are not tied up for extended periods, with your family being denied access to them.
Limited Benefits for Muslims
Even under Sharia Law, it is permissible for Muslims to gift up to 1/3 (one-third) of their Estate, as per a written will. If a Muslim testator wishes to bequeath more than 1/3 of the Estate in a manner that differs to Sharia Law, it would require the written consent of all legal heirs.
Consider Using a Trust Structure for Your Inheritance Planning
At Aventure Law, we specialise in the use of Wills, and also Trusts, for your succession and estate planning. If you would like to use traditional written Wills, then we would be happy to assist you. Please also do not hesitate to ask us for information on how using a Trust could assist you and your family in planning matters of inheritance, as well as providing tax efficiency and privacy for your business and personal assets.
Aventure Law provides a full suite of personal law services. Please get in touch to discuss any matters pertaining to Wills and Estates. We are also Trust Law experts and can guide you and your family on the benefits of using a trust structure to secure your assets and your loved ones’ financial futures.
For further information, please contact Imran Lalani (imran.lalani@aventurelaw.com) or Akshata Mandevia (akshata.mandevia@aventurelaw.com)
