If there’s a will, there’s a way

Dying intestate or without a will can have serious implications on your real estate investmentsEdward Mainwaring-Burton

Two things in life are certain. One is taxes. The other, we don’t like to think about. Eventually, we all have to face the inevitability of our own mortality. Call it taking a dirt nap, pushing up daisies, checking out, kicking the bucket or any other frivolous euphemism to deflect from the gravity of the situation but for heaven’s sake (pun intended) don’t avoid the fact that one day it will happen to all of us.

Yes. That’s the most macabre opening paragraph I have ever written but it serves a purpose. Many people spend a great deal of time and effort saving and investing to provide for themselves and their family; careful management of your assets and forward planning for children’s education, retirement, healthcare and insurance is essential to building financial security. However, what if your carefully managed life comes to an abrupt end? Research shows that in the developed world, more than half of adults do not have a will.

Hard-earned possessions

Dying intestate (without a will, testament or statement of wishes) can be a big problem,  especially if you live or have assets held outside your domicile or country of origin. Probate, legal wrangling and all the issues surrounding dividing your hard-earned possessions between family, creditors, lawyers and tax authorities can take years. Financial costs and potential family confrontation could tear your family and your estate to pieces. On top of the distress of losing a loved one, those you care about may be left with the awful prospect of fighting tooth and nail to have access to the penny jar that you filled for them. In some societies and jurisdictions, including here in the Middle East, decisions will be made for you as to who receives your home, money and even care and custody of your children!

Take a moment to think about that. Who looks after your children if something happens to you? Who owns the house that your spouse shares with you? Who has to pay the loan on the car you drive? Who can access your bank account? Someone who doesn’t know you, has never met your family and friends and may not have a sense of urgency to answer these questions could ultimately making the decision.

Sharia law

If you have no appropriate will under local law at time of death, it is said that you have died intestate. In the UAE, this means that sharia law will be applied to your assets, investments, debts and legal wards. Yes. That means that not just your bank account but also your children will be allocated to your relatives by a court. Until the court has decided on this allocation, all assets will be frozen. Let’s just break that down. Any outstanding debts (including mortgage) could be immediately inherited by your spouse or next of kin, your spouse might still have custody of the children but might not be their legal guardian, your bank accounts, investments, telephones and credit cards could be blocked (often within hours of death) and your family’s visas would be revoked (allowing only 30 days to apply for a new individual visa or leave the country). A horrifying prospect for someone suffering the grief of a bereavement.

Real estate ownership

Real estate that you own and have not included in your will could either be assigned to a court-appointed blood relative of yours or ownership could be divided between several members of your family. The roof over your family’s head could very easily become a trap from a financial and legal perspective.

If an expat husband dies without a will, there is the distressing possibility that his wife would find herself living in a house that she does not own, but for which she owes a large amount of money to a lender. She will have no access to local bank accounts and will be
required to leave the country within one month. She will not be able to take the children with her unless she has the expressed written permission of the husband’s senior male relative.

If I suggested to you that you allow a court somewhere in the world to choose which of your friends or relatives could change the PIN number on your credit card today, to select someone in your family to drive your car and to make another person in your life the legal guardian of your children without ever necessarily meeting you or them, I sincerely doubt you would take me up on the offer. If you have assets, investments or property in jurisdictions around the world or you, like me, live in a country other than where you are from and you have not written a will that is recognised locally, this is what you are potentially agreeing to.

One short conversation with your lawyer, financial advisor or accountant could go a long way to protecting your loved ones.

Be prepared

Of course, as with most legal procedures, there has to be a caveat. Even if you have a locally-drafted will, translated and attested in every country where you might have lived, invested or saved a penny, it does not give a 100 per cent guarantee that there will be no argument or dispute or that your wishes will be followed. However, wearing a seatbelt in a car does not guarantee 100 per cent protection in an accident. You wear your seatbelt not because you expect to crash, but in case you do. You fasten the seatbelt before you start driving, not halfway to your destination. In the same way, preparing for the worst should be the first step in your financial plan, not an afterthought.

: Property WeeklyPW

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