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UAE Succession Law : FAQs on Wills and More!

Published on : September 2014
Author(s):Rini Agrawal

WHERE THERE’S A WILL, THERE’S A WAY: FAQs ON SUCCESSION LAW

“We should not forget that it will be just as important to our descendants to be prosperous in their time as it is to us to be prosperous in our time.”

          Theodore Roosevelt

 

The Islamic laws of inheritance can be legitimately accommodated and practically implemented within many existing western legislation systems by way of a valid will. In fact, for those Muslims living in the West, a will becomes a necessity to prevent intestate succession law of the land being applied to their estate after they die. The will should comply with the regulations and laws of the land so that it can be enforced and executed after a person’s death without any unnecessary legal problems. It is important to note that if the will is desired to be made (in the case of expatriates) according to the local laws of UAE, then it should be drafted in accordance to Sharia law and should not be contradictory to any of the principles of Sharia.

Inheritance Planning is a term used for planning the distribution of your worldly possessions after you leave this life behind.. When a person passes away without leaving a will or dies “intestate” as legally mentioned, the property of the deceased is allocated and 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 a documented account regulating the distribution of your estate. 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. Your “Last Will & Testament” is a document that details precisely what you would like to do with your estate in the event of your death. The Will-document can cover all aspects of your life, from physical assets such as property, investments or cash to your last wishes.

Q.1   Why make a will? What are the necessity and expected risks if there is no will?

A will is always important to secure the rights to the property by the owner for his/her kith or kins in the event of death. It determines the subsequent owner of your assets and after you – the specified person will take care or become an owner of your assets in the event of your death. It is important to write a will and eliminate all risks of a future dispute, or there may be a possibility that the property may confiscate by the government in case of no will. 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. However Sharia law gives preference to settling the liabilities of the deceased before distribution of assets, so unfreezing the account & assets can only be carried out by order of a Sharia 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. It is pertinent to note in the absence of a will, UAE being a Muslim country, there is a possibility that the property may not go to the person you wished.  The Sharia Law automatically applies to both Muslim and non-Muslim estate holders when they pass away in the UAE.

Q.2  will the inheritance and intestacy laws of my home country (in the case of expats)prevail over the UAE’s local processes, which follow the principles of Sharia?

In case a person of any religion dies intestate, the courts may adhere to Sharia laws regarding inheritance of assets and custody of children. Inheritance matters in the UAE are government principally by two Federal Laws: The Personal Affairs Law of No.28 of 2005  allows non-Muslim expats living in the UAE to opt to use the law of their countries to distribute their assets are in the UAE. This is irrespective of the fact whether or not the non-Muslim expatriate has a legally recognized Will in his/her home country. In other words, the descendants can apply for probate in the countries of origin upon the demise of a family member, which will allow them to distribute the UAE assets in the manner that the deceased person would have wished.

Q.3 Is U.A.E law applicable only to UAE nationals, or to all Muslims, or even to all expatriates irrespective of nationality and religion? 

In the absence of a will, UAE being a Muslim country, the Sharia Law automatically applies to both Muslim and non-Muslim estate holders when they pass away in the UAE. 

Q.4  I am doing business in a partnership in Dubai. I own most of the business save for the amount which must be owned by a local partner as per the provisions of the applicable lawThe distribution of profits is provided for in a side agreement. I pay the local partner an annual/lump sum fee  – is he a sleeping partner?  If I die, who will be entitled to all my assets and profit sharing in the company?

Business owners have it worse. SME owners and owners of large conglomerates have much more to lose since running a business requires a  substantial 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 to its knees in a matter of days. The distribution of assets and profit shares in any business following the demise of a member may well be provided for in side agreement, but the fact remains that the death of a partner is likely to raise questions and potentially dispute with regards to business funds. As an expatriate, whether you are employed or a business owner, please take some time off to focus on your inheritance planning and save your family from the financial grief that is sure to follow should something happen to you in the UAE.

Q.5  What type of Will shall I draft and does it need to be notarized and legalized?

The Personal Status Law does not contemplate that a will citing foreign law or provisions contrary to Sharia could be issued.  Reference is made to Article 1 (2) and Article 424. Therefore there is no such thing as a UAE will.  A will should be drafted by the law of the country of expatriate by the experts, having regard to the gifting problems, tax, and other issues. If the jurisdiction of choice requires the will to be notarized or legalized, then it is recommended that the author of Will upholds this provision in the UAE. 

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