How inheritance laws affect expats in the UAE

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inheritance-uaeI came across an article the other day in the National about Wills and inheritance laws in the UAE. Since I speak to a lot of business owners about this issue, I decided to create this post supporting the article on the ‘The National newspaper’.

What is Inheritance Planning?

Inheritance Planning is a term used for planning for what you leave behind, after you leave, for your heavenly abode. When a person passes away without a “Will” / “Wasiyat”, or dies “intestate” as legally mentioned, the property of the deceased is distributed according to the law of the land on personal affairs.

In other words, if you do not have a “Will”, you do not have anything to base on as to how your estate is distributed. An “Estate” applies not just to your real estate, but anything of value like money, bank accounts, cars, furniture, books, bonds, investments, jewelry, family inheritances, etc.

[quote]Your “Last Will & Testament” is a document that details exactly what you would like to do with your estate in the event of your death.[/quote]

The document can cover all aspects of your life, from physical assets such as property, investments or cash to your last wishes.

5 factors that affect expats in the UAE

  1. When an expatriate dies in the United Arab Emirates (UAE), banks are instructed by the courts to freeze all transactions on the accounts of the deceased, including joint accounts. Even assets shared between a husband and wife will be frozen until the inheritance is sorted out.
  2. Shari’ah law gives preference to settling the liabilities of the deceased prior to distribution of assets, so unfreezing the account & assets can only be carried out by the order of a Shari’ah Court if it has an attested “Will”. This process aims to safeguard any payments that need to be made after an expatriate dies, such as outstanding loans and debt payments.
  3. In the absence of a “Will”, UAE being a Muslim country, Shari’ah Law automatically applies to both Muslim and non Muslim estate holders when they pass away in the UAE. The estate will be divided as per the Shari’ah Table.
  4. If you are a young parent, a “Will” importantly covers the appointment of guardians or custodians for the purposes of having someone look after your minor children until they grow up.
  5. In the absence of a “Will”, the court may have to decide on the guardianship for your children which may not be of your choice or wish. They may be put under the custody of a public welfare system for a long period of time till a guardian can be finalised by court in due course of time.

But, despite the fact that UAE courts only accept transactions related to marriage, divorce and other issues only from Muslims of any nationality, they also accept “Wills” from expatriates of any religion or any nationality as people belonging to other religions also reside in UAE.

Business owners have it worse. SME owners and owners of large conglomerates have much more to lose since running a business requires a large base of assets to be built locally and internationally. The absence of proper inheritance planning can bring a family used to a millionaire’s lifestyle down to their knees in a matter of days.

As an expatriate, whether you are employed or a business owner, please take some time off to focus on your own inheritance planning and save your family from the financial grief that is sure to follow should something happen to you in the UAE.

What you can do

Step 1 – Meet a certified financial planner to take stock of all your assets and liabilities in the UAE and abroad.

Step 2 – Meet a Wills and inheritance planning specialist to have a will drawn up to cover the distribution of your assets as per your wishes.

Step 3 – Take steps to protect your family against any liabilities you may have through proper insurance.

Need some help? Click on the image below to ask a question or contact us.

Ask Amit

About the author

Amit is an Independent Financial Advisor, based in Dubai since 1997. He is part of the prestigious ‘Million Dollar Round Table’ (MDRT), which is an elite club of the best financial advisors worldwide.

He has authored the ‘6-Step Financial Success Guide’, and the book ‘Creating, Preserving, Distributing Wealth’.

He helps business owners and professionals ‘Create A Second Income’ through investments.

Amit Mitbawkar

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