Exercise a little will power in the UAE
Nobody lives forever, we all know that. Maybe that’s why so many of us leave a personal and financial mess behind us, by failing to write a will.
Even those who do draw up this vital document can still let it go out of date.
If you’re an expat working in the UAE, you really need to keep on top of this. If you have assets locally, as well as in your home country, your situation is doubly complex.
Without a will, you have no say in how your assets are divided after your death, says Keren Bobker, an independent financial adviser with Holborn Assets in Dubai and The National’s On Your Side columnist. “You can leave a huge financial headache if you don’t take a little time to organise matters,” she adds.
A will describes how you want your estate to be distributed, appoints an executor to carry out your directions, names guardians for any children, and may also set up trusts.
This doesn’t just mean real estate, but anything of value, such as cash, cars, furniture, books, investments, jewellery and any previous family inheritances.
If those assets are in the UAE, you should consider preparing a will locally, says Nita Maru, solicitor and managing partner of TWS Legal Consultants.
“Unlike many other countries, the UAE does not practice ‘right of survivorship’, where your property passes onto the surviving joint owner upon death of the other. The final decision is down to the local courts,” she explains.
For those that die intestate, without a will, your personal assets in the UAE, including jointly-held assets such as bank accounts, may be frozen until all your debts and liabilities have been discharged and the issue of inheritance has been determined.
“This could take months and surviving family members are often left without access to money during this period,” Ms Maru explains, adding that a will ensures your wealth goes to the right people. “The Dubai government’s official website states that ‘UAE courts will adhere to Sharia law in any situation where there is no will in place’. This means if you die without a will, the local courts may examine your estate and distribute it according to Sharia law.”
As a result your assets may not be given away in the manner you wish. Under Sharia law, for example, a wife who has children will qualify for only one-eighth of her dead husband’s estate, Ms Maru says.
Yet this will not apply to any assets held in your home country, which will usually be divided among your family. Only assets held in the UAE may be subject to Sharia, but with a watertight will, you can ensure they are distributed according to your wishes, Ms Bobker says.
“Most expats hold the majority of their assets outside of the GCC, so in most countries the home country law will apply,” she adds. “There are also steps women can take so that few assets here are kept in the husband’s name to minimise potential problems.”
Those with assets in both the UAE and overseas may need two separate wills says Ms Maru, covering each jurisdiction where your assets are based, written by local probate lawyers.
Writing a will is particularly important if you have children, says Amit Mitbawkar, a senior wealth manager with Acuma Independent Financial Advice in Dubai.
“In the absence of a will, the courts may have to decide on the guardianship for your children, which may not be in line with your wishes. In an extreme case, they could even be put under the custody of the public welfare system until the courts finalise a guardian, which can take time. Your will should therefore appoint guardians or custodians until your children reach adulthood.”
Business owners also have to take particular care, Mr Mitbawkar adds: “Running a business requires a large base of local and international assets. Without proper inheritance planning, a family used to a millionaire’s lifestyle can suddenly find themselves short of money. So you need to take inheritance tax advice from a certified financial planner.”
Given the complexities, and the money at stake, specialist advice is key. Just don’t let money-hungry lawyers panic you into thinking you need more services than you really do.
Ms Bobker says unless you own a property, business or have significant assets overseas, you typically do not need to write a second will in accordance with Sharia law. “This can be a costly process, and you have to factor in court-approved translation and notarisation costs. Sadly, I have heard of people being overcharged for these services.”
You may struggle to accept your own mortality, but a solicitor or tax planner won’t have any problem with the concept of writing a will.
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