The United Arab Emirates (UAE) has become a popular destination for expatriates seeking new opportunities and a vibrant lifestyle. However, when it comes to matters of succession and inheritance, ex-pats residing in the UAE need to be aware of the unique legal framework in place.
Sharia law
The UAE follows Sharia law, which governs personal matters, including the distribution of assets after a person’s death.
In this blog, we will delve into the intricacies of UAE succession law and provide ex-pats with a comprehensive guide to understanding their rights and obligations in this regard.
- Understanding Sharia Law in the UAE
Sharia law is the basis of the legal system in the UAE. It draws its principles from Islamic teachings and covers various aspects of life, including matters related to marriage, divorce, and inheritance. Under Sharia law, the distribution of assets after death follows a prescribed set of rules. These rules may differ from the customary practices in other countries, making it essential for ex-pats to familiarize themselves with UAE succession laws.
- Applicability of Sharia Law to Expats
Contrary to popular belief, Sharia law applies to both Muslim and non-Muslim expatriates residing in the UAE. When a non-Muslim expat passes away, the UAE courts will typically apply Sharia law to determine the distribution of assets, unless the individual has a legally recognized will in place.
- Importance of Having a Will
Given the potential complications of Sharia law’s application to expatriates, it is highly recommended for individuals to create a will that specifies their wishes regarding asset distribution after their demise. By drafting a will, expats can ensure that their assets are distributed according to their preferences, rather than being subjected to default Sharia provisions.
A will can provide clarity and certainty in estate planning, making it an essential document for ex-pats.
- Registering a Will
In order for a will to be valid and enforceable in the UAE, it must be registered with the Dubai Courts or the DIFC Wills & Probate Registry, depending on the jurisdiction of residence. Registering a will ensures that it is legally recognized and can be executed as per the expatriate’s wishes. Professional legal advice should be sought during the will creation and registration process to ensure compliance with local regulations.
It is possible to use a home country’s will through the local courts. But this is not advisable. The court of First Instance will reject this and the executors would need to appeal the decision through the Court of Appeal, requesting that the rules of the home country, for example, the UK are adhered to instead. A home country will cannot be used in any circumstances to distribute real estate in the UAE. So if you own property in the UAE a registered UAE Will is even more important.
The law was changed slightly earlier in the year (2023). Under the new rules of succession for non-Muslims 50% of the assets go to the spouse. Previously this was 1/8. The other 50% is distributed between the children. This in itself can cause IHT problems if domiciled in the UK. As gifts to spouses where husband and wife are both UK domiciled are IHT free, but gifts to children are only IHT free up to the Nil Rate Band of GBP 325,000. A will stipulating your wishes for estate distribution would negate this.
- Guardianship of Minor Children
In the event of a parent’s death, the issue of guardianship for minor children becomes crucial. Expats should clearly designate their chosen guardian(s) for their children in their will. Sharia law will be applied to determine guardianship if it is not addressed in the will. By stating their preference explicitly, ex-pat parents can avoid potential disputes or uncertainties concerning the care and custody of their children. It is also recommended that people appoint temporary guardians. As the permanent guardians may well not be UAE residents.
- Succession Planning for Business Owners
For ex-pat business owners in the UAE, succession planning is of utmost importance to ensure the smooth transition of their businesses upon their passing. Business owners should consider factors such as appointing successors, clarifying roles and responsibilities, and addressing ownership transfer in their wills or by establishing a proper legal framework such as a trust or company structure.
- What does it cost?
A full will that covers everything, including guardianship. is c1AED 5,000 for a couple or c AED 10,000 for an individual. This can become cheaper if you only want to cover a single area, typically to say, only cover a bank account. Once your will is registered, amendments are cheap. For probate there is a flat fee of AED 5,000. The process is measured in weeks, rather than months or potentially years as opposed to trying to use a home country will through the Dubai courts.
Understanding UAE succession law is crucial for ex-pats residing in the country. While Sharia law forms the basis for asset distribution, expatriates can exercise their autonomy and safeguard their interests by creating a will that aligns with their preferences.
Disclaimer: This blog is intended to provide general information and should not be considered legal advice. It is advisable to consult with a legal and or financial professional specializing in UAE succession law to address specific circumstances and receive personalized guidance.
By seeking professional legal advice and ensuring the proper registration of their wills, ex-pats can navigate the complexities of succession law and ensure the protection of their assets and the well-being of their loved ones.
Find out how we can help you
If you would like to understand more about this topic get in touch
Related posts
Published On: July 19, 2024|2.5 min read|Understanding the Stamp Duty Surcharge for Expats: A Comprehensive Guide
Stamp Duty Land Tax (SDLT) is a critical consideration for anyone buying property in the UK, and for expats, there are additional factors to be aware of. In recent years, the UK government introduced a stamp duty surcharge specifically targeting non-resident buyers. This blog will explore what the surcharge is, who it affects, and how expats can navigate these changes.
Read more
Published On: July 12, 2024|1.9 min read|Labour Wins the 2024 UK General Election: What It Means for Your Money
The market response to Labour winning the election was pretty calm, with minimal financial market ripples. The lack of movement was unsurprising given the overall result had already been priced in.
Read more
Published On: July 10, 2024|3.2 min read|The Merits of Accessing Your Pension Commencement Lump Sum in Stages
As you approach retirement, one of the significant decisions you'll face is how to access your pension commencement lump sum (PCLS). While it might be tempting to take the entire amount in one go, there are several benefits to accessing your PCLS in stages.
Read more
