Protecting your Assets in Dubai through DIFC Wills

Dubai, with its business friendly atmosphere, enviable infrastructure and sky-high ambition, has become a fascinating jurisdiction for people from across the globe. More than 180 nationalities have made Dubai their home. Many of them have done well for themselves and own a variety of assets. However, shockingly, very few of them think about an important question – what will happen to my hard-earned assets in the event of my death?

Unfortunate Reality

In the unfortunate event of an expatriate’s death, the authorities will freeze all his assets – meaning that his legal heirs will not be permitted to deal with his assets in any manner. They will not be able to sell his property, access his bank account, or receive his end of service benefits. The guardianship of his minor children will vest with his father. His wife will not be able to take their children out of the country since she is not the legal guardian, as per Sharia Law.

The authorities will release the assets only upon receipt of the Sharia court’s order identifying the legal heirs and apportioning the assets. This is a costly and time consuming process, which will require the legal heirs to obtain necessary documents from the deceased’s home country proving their relationship. More importantly, the whole process including determination of legal heirs and distribution of assets will be done in accordance with the Sharia. Consequently, the list of legal heirs may include persons other than the deceased’s wife and children, and the assets may not be distributed among the legal heirs the way the deceased intended to! Generally, under Sharia, the wife is entitled to only one eighth (1/8th) of the assets. The court will distribute his whole assets among his wife and children only if the other legal heirs provide a waiver in this regard. All these documents would have to be notarized and legalized up to the UAE embassy of your country. They are also required to be translated into Arabic and attested by the relevant local authorities.

Current Scenario

As of now, there is a certain confusion relating to inheritance, in particular, inheritance of immovable property. This lacuna has been causing severe concern for the expatriate community, who were not sure of the extent of protection offered by the existing mechanism. Considering that investments in the real estate sector in Dubai alone witness multi-billion dollars each year, it was obvious that Dubai would take the lead.

DIFC Wills – First of its kind in the Middle East

As in many other matters, Dubai has become the first jurisdiction in the Middle East to permit non-Muslim expatriates to register Wills as per internationally recognized common law principles. The Dubai government created the Wills & Probate Registry, under the Dubai International Financial Centre’s (DIFC) Dispute Resolution Authority. This innovative mechanism was already tested with great success by certain other business friendly jurisdictions like Malaysia, Singapore and Hong Kong.

Who can register DIFC Wills?

The Wills & Probate Registry Rules permit all non-Muslim expatriates with assets in Dubai to register Wills. The Will can include all type of assets including, apartments, villas, shares, stocks, vehicles, jewelries, bank accounts, end of service benefits and insurance policies.

In order to register the Will, it is not required that the testator is a resident of Dubai, however, the assets must be in Dubai. The Rules do not permit the Will to include assets in other emirates or out of the UAE. However, there are certain limited ways for expatriates to protect their investments out of Dubai, through the DIFC Will.

Advantages of DIFC Will

Among others, the DIFC Wills offer the below advantages:

  • Non-application of Sharia Law
  • Right to choose your beneficiaries
  • Guardianship Will for minor children.

Registration and Confidentiality

The Will registration process is simple and efficient. To ensure strict confidentiality, only the testator, his lawyer and the authorized officer of the Registry are permitted to witness the registration. An electronic copy of the Will is kept with the Registry until the 120th birthday of the testator. The testator is permitted to modify his Will at a nominal cost, or cancel his Will any time during his lifetime free of cost.

Author: Faizal Latheef

Faizal is renowned for his expertise in corporate and commercial law. He represents and advises clients on a wide variety of matters including Foreign Investments, Joint Ventures, Mergers and Acquisitions, Corporate Restructuring, Distribution & Franchising, Anti-Corruption & Compliance, Cross-Border Transactions, Employment and Wills.