Will registration at DIFC relieves anxiety for expats with assets
Charlotte Sherwin and her husband Tom are currently in the process of getting their will notarised at the Dubai International Financial Centre (DIFC Courts).
The Dubai residents have drawn up the document to ensure that if Mr Sherwin, a commercial director in the oil industry, were to pass away first, his wife would maintain guardianship of their two teenage children and receive their assets in Dubai, and vice versa.
“We are long-term expats, and it would be very scary if something happened, because we have a lot of money invested in a house, a boat, and cars,” says Ms Sherwin, 49, a PR executive from the UK who lives in Green Community West.
The couple will join the more than 2,000 UAE residents who have already registered wills at the DIFC Wills and Probate Registry (DIFC WPR), since the initiative was first set up almost two years ago in May 2015. It is designed to help ensure non-Muslims with assets in Dubai can bypass Sharia law and instead abide by internationally recognised common law.
“We have already registered over 2,100 wills,” says Sean Hird, the director at DIFC Wills & Probate Registry, adding that the registry offers a “secure gateway for families, business and homeowners to plan ahead while they can”.
Next week the registry is expected to launch an online property will after it noticed an increase in demand for wills governing real estate. Mr Hird says it will be “a digital platform where users can protect their assets through a few simple clicks” adding that it is designed for “rapidity” and will take “ the headache out of securing English language, common law legal protection for real estate assets in Dubai – and soon Ras Al Khaimah.”
But despite the presence of the Dubai registry and talk of an expatriate-only court in Abu Dhabi, many expats are unclear whether getting a will registered is necessary – particularly if they only have a few assets.
James Spence, the assistant vice president of Globaleye says having a will is like climbing with a rope. “If you fall, it may or it may not save you, there’s no guarantee – however, it is far better to go climbing with a rope,” he says.
“From a financial advisory point of view, it is far better to have a will written where you come from, governing your assets in your home country.
“You also have to be aware that writing a last will and testament here can often void your will back in your home country.”
Devanand Mahadeva, a lawyer with Goodwins law firm in Abu Dhabi, says while the DIFC WPR is “good” for those based in Dubai, it “does not become holistic with regards to people who want to deal with their inheritance to cover the movable and immovable assets elsewhere in the UAE or other parts of the world.
“Furthermore, the execution of the probated document has to be done through the regular courts in Dubai. Another deterrent being the cost of registration at the DIFC WPR which is considered high by people who have a simple inheritable estate like end of service benefits, small deposits or movable assets.”
However, if you have a property or business in Dubai, Cynthia Trench, a principal of Trench & Associates says a DIFC-registered will is “the only valid option” for non-Muslim expatriates as it offers “peace of mind” that their chosen beneficiaries will receive their estate.
This peace of mind is key in a community where many are unclear how their assets would be handled if they died.
If a non-Muslim and their spouse dies without leaving a will in place, any assets they owned in the UAE, and the guardianship of their children, is often dealt with according to the local Sharia law, says Nita Maru, a managing partner at TWS Legal Consultants. The grieving spouse can then face a lengthy legal process, and the decision the court comes to might leave a female spouse feeling short-changed.
“The Sharia system is based on a fixed share allocation system for the disbursement of assets,” says Ms Maru. “A surviving wife who has children qualifies for an eighth of her husband’s estate, and a surviving husband who has children qualifies for one quarter of his wife’s estate. The remainder of the estate is distributed among other family members, depending on who is alive at the date of death.”
But although a DIFC-registered will is currently the closest thing to a guarantee that a Dubai-based non-Muslim’s assets go to chosen loved ones, other options are still available on the market, which are catching expats out unawares.
The Sherwins say they wasted Dh6,000 on a will lodged with Dubai Notary, which they subsequently discovered might not hold up in court. This they said was drafted by a non-legal consulting company referred to them by their house insurance provider.
“I was asked to read and sign each page, and then the back of this document was stamped, stating that it had been filed with Dubai Courts,” explains Ms Sherwin. “I thought ‘this is great, and I’ve got a sticker to prove it’. But a couple of friends kept telling us it wasn’t going to work.”
Ms Sherwin says she then panicked and transferred significant funds offshore. “I felt we were very vulnerable that our money might be frozen. Before DIFC-registered wills became known, people were just grasping at straws to try to protect themselves in some way.”
Ms Trench says over a dozen of her clients have been mis-sold wills by unlicensed providers and have come to her following the death of a loved one. “There are many families affected due to the unclear rules and the Sharia Court’s refusal to accept ‘home’ wills, or any wills for that matter, which are contrary to Sharia. There are still a huge number of unlicensed will writers out there. I hope that further legislation will soon come into effect that will set firm guidelines to protect the public against these unscrupulous unlicensed providers.”
While those without property may think registering their will is unnecessary, the service offered by the DIFC WPR also covers bank accounts, shares in a business, vehicles, end of service benefits or other employee benefits and personal chattels, such as jewellery.
However, the service does not come cheap.
It costs Dh10,000 to register a single will at the DIFC WPR and Dh15,000 for a mirror will for couples. Plus there are lawyer fees ranging from Dh2,800 to Dh3,700. The legal process usually takes about six months and later amendments to the will cost Dh550, and can be done without needing a lawyer.
Ms Trench says it is also very useful in terms of the appointment of interim and permanent guardians. For that purpose, the Dh5,000 “Guardianship Only” will, is designed for those with children residing in Dubai but without assets held here, who still want reassurance that their children will be looked after by a person of their own choosing when they die.
Digital entrepreneur Manisha Dutta and her husband don’t own property in Dubai, but they do have cars, bank accounts, and shares. The couple is about to draw up a DIFC-registered will to cover those assets, as well as guardianship of their son and daughter.
“We want to be very careful with the Sharia law that our children don’t end up going to my husband’s parents,” says Ms Dutta, from India. “In our case this is not a very comfortable option, because our in-laws don’t live in Dubai and they’re always travelling. I would like to have my sister as the guardian.”
So what happens if you die without a DIFC-registered will in place?
The Personal Status Courts of First Instance in the UAE will stick to Sharia law precepts, regardless of whether the deceased is a Muslim or not, says Ms Maru. Under Sharia law, children are given over to a male relative of the husband’s family, rather than their mother. “While a surviving wife may be appointed as a custodian of any children of the marriage, she may not automatically be appointed as the legal guardian,” she says.
Meanwhile, personal assets including bank accounts are frozen until inheritance is determined, and family members are often left without access to money during this period.
Plus the court procedure can be lengthy and expensive, as Dubai resident Delphine, who asked for her name to be changed, has learnt. The death of the Briton’s husband from cancer three years ago was a shock. Although the couple had a will in their home country, covering their assets there, the money, cars and two houses they owned in Dubai were subject to local Sharia law. “We didn’t put a will in place here,” says Dephine, who has two sons ages 15 and 16.
After her husband’s death, she says she emptied most of their accounts, “with a minimum amount left in”, before they were frozen 10 days later. “I prolonged submitting his death certificate for as long as possible, because I knew I wanted to do a few things first,” she admits.
For the next two years, while the court decided her cases, Delphine had no access to the accounts or assets that the couple had jointly held in Dubai. “I was fortunate that I still had my own bank account and car – without those things, I would have had big problems,” says Delphine. The Dubai Courts awarded the majority of the money and assets to her sons, then to her father in law, and one-sixth went to her.
“My father-in-law signed his portion over to me, and was happy to do that, which was a tremendous relief,” she explains. “I know of stories where it hasn’t been amicable between families and has taken seven years to clear through the courts.”
The guardianship of Delphine’s children was awarded to her father-in-law, but Delphine worked amicably with him to get this ruling changed, bringing him over to Dubai three times at various stages from the UK to address the courts. “I also needed to provide a witness, who preferably had to be a male Muslim,” she says. “I got somebody from my husband’s company to do that for me.”
While the courts have ordered for her son’s money to be released to them when they’re 21, Delphine says she is able to access the internet bank account in which the funds are held.
In the end, the two-year process set her back Dh12,000, and involved four separate court cases costing Dh3,000 each. Delphine brought her expenses down by representing herself without a lawyer. “The legal process is do-able, but it depends on the relationship you have with male family members,” she says. “I felt the courts had our best interests at heart. It is frustrating and, of course, as a mum and a wife, you feel the money should all go to you. But in the end, things worked out the way that I wanted.”
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Updated: March 3, 2017 04:00 AM