Dubai Property Law: The will of fortune

Last Will and TestamentExpat residents dine at a restaurant at Dubai Marina. Experts say expatriates who own property in Dubai need to execute a will l Image Credit: Supplied

Inheritance is a tricky issue for expatriates who own property in the UAE. From the outset, it is important to know that assets will not be automatically passed on to one’s dependents in the event of death. In fact, the entire process could be a lot more complicated.

Preparing a duly attested will is one way of protecting one’s assets and investments in the UAE, experts tell Property Weekly.

“People assume that in the event of an unforeseen circumstance where a person dies in the UAE, the inheritance laws of their home country is the same the property law here and that automatically apply for all assets and bank accounts they have here,” says Mohammad Marria, Senior Estate Planner at Just Wills, a Dubai-based firm specializing in writing wills. “This is not the case. If there is no legally attested will granting beneficiaries all rights to the deceased’s property investments, then by default the Islamic law of inheritance will apply to both Muslim and non-Muslim estate holders in the UAE.

“A will, on the other hand, protects the rights of the investor to pass on inheritance to the rightful beneficiary nominated in the will.”

When an expatriate dies in the UAE, banks immediately freeze the deceased’s account, including joint accounts. This is done so payments can be made to outstanding debts such as mortgages and loans.

Take the case of an Indian expatriate who had intended to make a will when he turned 50. However, he died before realising his plans.

“My husband succumbed to a heart attack four years ago,” says the man’s widow. “I had no clue about the laws and the legal system in the UAE. I had a joint account with my husband, which was immediately frozen after his death. Since he did not have a will, Sharia became applicable for all inheritance matters. I first hired a lawyer just to understand Sharia. Then I ran from pillar to post getting all the paperwork in order to activate my bank account.

“All in all, it took me almost two years to get everything in my name. It was quite an ordeal — an experience I don’t hope any woman has to go through. Without a will, a woman can be very insecure and can find herself at the mercy of others.”

So what does Sharia say about inheritance?

Under the law, the father and mother of the deceased each takes one-sixth of all assets, while the wife only gets one-eighth. The rest is divided between the children, with two shares going to the son and one share to the daughter. If the deceased only has a daughter, she inherits the rest of the share.

“I always recommend property investors in the UAE to buy assets in joint names. This way, by default, both individuals will have a 50 per cent share of the property,” says Marria. “While joint bank accounts are frozen in order to pay off any debts, joint property investments actually protect a couple’s share of investment in the property they own in the UAE.”

Another point for consideration is for both spouses to take out life insurance.

“In the case of a mortgage, banks in the UAE mandatorily take out a life insurance in the mortgagor’s name. Banks, however, nominate themselves as beneficiaries so that in case of death, the insurance pays off any pending mortgage,” says Marria. “We, however, recommend that both spouses take out life insurance, as in the case of death, the remaining spouse will likely face a number of incidental expenses.”

It is important to follow proper procedures when executing a will as it can be rejected by a court if there are ambiguities.

“Having a will saves a lot of hassle as it clearly identifies the beneficiaries of the asset holder,” says Devanand Mahadeva, Director at Lasting Legacy. “Every will made by a UAE expatriate resident needs to be notarized by their respective embassy or consulate or at the Dubai Notary Public, and later attested by the Ministry of Justice and Ministry of Foreign Affairs. If a will is done professionally, there is no reason for it to be rejected by the courts.

“In my personal experience, we have seen a wife get all her rightful dues within 16 days from the death of her spouse. However, in another case where there was no will, it took almost nine years for a woman to get the rights to her husband’s assets.”

Marria says: “Money wakes up the devil in every person and families can start fighting if there is no will in place. The wife of one Indian expatriate who worked for 30 years in a company saw her brother-in-law take the lion’s share of her husband’s assets and bank accounts, simply because there was no will.

“Every working woman should also get a visa under her employer’s sponsorship and not be dependent on her husband. Companies too must mandatorily have a nominee form for their employee so the family of the deceased is protected.”

A will does have its limitations. One of the conditions when executing a will is that an asset should have no liabilities when it is passed on to the beneficiary. Such was the case of a British expatriate, a mother of two children living in Dubai. She has been struggling to get her rights to the investments of her deceased husband. Despite having a duly attested will in place, she is yet to get her rightful dues under Dubai property law.

“My husband took out life insurance on a property mortgage so that in the event of anything happening to him, the mortgage would be paid off,” she tells Property Weekly. “But this has not happened. I currently live in the property, maintain it, pay all my community charges and utility bills. But I am yet to get the house in my name.

“The process of getting rights to assets after the death of a spouse can be time-consuming in the UAE. It takes time, money and a lot of running around. Fortunately, I am under my own sponsorship and have a bank account in my name, which keeps me independent.”

Source: Anjana Kumar, Special to Property Weekly

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