Ludmila Yamalova: Welcome and welcome back. This is Ludmila with Lawgical with LYLAW. By way of recap, in the previous segment we covered the topic of obtaining a U.A.E. residence visa on the basis of property ownership. In this segment, we will cover the topic of estate planning and inheritance in the U.A.E., in particular for non-Muslims.
To start with, the issue of inheritance or estate planning is not a simple one, in particular in this country. This is for a number of reasons. If a deceased does not leave a will behind, there is no quick way for the local authorities to identify who the heirs are, what the assets are, and how those assets are to be distributed amongst the heirs. Yet, the authorities must protect the interests of the heirs, although they have to do so before they identify who the heirs are. To do this, the authorities normally freeze the assets of the deceased until they have identified who the heirs are and how those assets are to be distributed. This means that often the assets remain frozen until the authorities obtain relevant information about the deceased and the estate.
In practical terms, this may take months, if not longer. This is because the heirs will have to come forward to the authorities and present relevant documents from abroad which will have to be legalized, establishing their rights to the estate of the deceased and establishing what the assets are, and how the deceased might have wanted for those assets to be distributed. Furthermore, if the deceased did not have a will in the country of origin, the heirs will further have to prove to the court how the estate would have been divided amongst the heirs as per the jurisdiction of the country of the deceased. Therefore, it is extremely important for non-Muslim expats living in the U.A.E. to have a will.
A will provides a roadmap for the authorities to identify who the heirs are and how to distribute the testator’s assets. Another reason why it is important for an expat to leave a will in the U.A.E. is for the reason of conflict of law. This is so because in the U.A.E. there are two laws that conflict with one another. On the one hand, the federal law allows for non-Muslim expats to choose the laws of their jurisdiction for the distribution of their estate. On the other hand, there is another law that provides that all assets related to real estate, in other words properties, must be distributed as per sharia. This presents a conflict because if the estate includes any real estate assets, those assets will have to be taken out of the estate distribution, either as per the law or as per the will, and those assets will have to be distributed as per sharia.
In order to remove this uncertainty based on the conflict of law, a few years ago the Dubai government introduced a new system for non-Muslim expats to benefit from. The new system is set up at the Dubai International Financial Centre, otherwise known as the DIFC, and is subject to the DIFC Court’s jurisdiction. The system is called the DIFC Wills Service Centre. In short, it allows non-Muslim expats to write a will providing for the disposition of their assets. The will can be very specific, outlining specific heirs and specific assets with copies of proof of ownership of those assets. Furthermore, the will can also include provisions for guardianship of minor children based in the U.A.E. Also, the will is drafted in the English language which is of tremendous benefit to non-Arabic speaking expats.
According to the laws governing the DIFC Wills Centre, there is a specific provision allowing for expats to include real estate property in their wills. There is also an agreement signed between the local courts and the DIFC Court ensuring that the decree of distribution as per the DIFC Wills Centre will be honored in local courts. The DIFC wills must be drafted by certified DIFC wills draftsmen.
Since the system was introduced, the DIFC Wills Service Centre has introduced several templates of the will. There are specific templates related to, for example, properties. Another template relates to companies. Yet another template relates to financial assets, and yet, another template relates to guardianship. It is, however, more advisable to opt for a full will. A full will includes disposition of all types of assets, moveable and immoveable, currently held or acquired later, as well as provisions for the guardianship of minor children.
The DIFC Wills Centre is one example of ensuring that one’s wills of disposing of their assets are certain and definitive. A few years later, the Dubai government introduced another system allowing expats to register their wills aside from the DIFC Wills Centre. This system is hosted by the Dubai courts and is registered through the Dubai notary. According to this system, expats can also include real estate assets into the will. However, there is no provision for guardianship. Furthermore, this will must be drafted in Arabic.
One other element to highlight about the DIFC Wills Service Centre is related to property based in other emirates. The DIFC Wills Centre signed an agreement with Ras Al Khaimah allowing for the wills to also include disposition of real estate property and assets located in the emirate of Ras Al Khaimah. Therefore, the DIFC wills can include assets based in both Dubai and Ras Al Khaimah. In 2017, the Abu Dhabi government filed suit and introduced a system allowing non-Muslim expats to register wills with the Abu Dhabi Judicial Department. According to this system, expats holding assets, not only in Abu Dhabi but in other emirates, may be able to include those assets into the will registered with Abu Dhabi courts, including their real estate assets.
In summary, there are three ways to provide for estate planning in the U.A.E. for non-Muslim expats.
(1) Through the DIFC Wills Service Centre. This system allows expats to include real estate assets based in both Dubai and Ras Al Khaimah.
(2) Through the Dubai courts.
(3) Through the Abu Dhabi courts.
This concludes this segment on inheritance and estate planning for non-Muslims in the U.A.E. Thank you for listening. Tune in next week when we tackle the issue of divorce and marriage in the U.A.E.
Hanan: Hello. This is Hanan Arab. Thank you for listening to our Managing Partner, Ludmila Yamalova from HPL Yamalova & Plewka DMCC. If you have any further questions or would like any specific clarifications, feel free to contact us at info@Lylawyers.com. You can also find other ways of contacting us on our website, www.Lylawyers.com. That’s all for now. See you next week.
