Property inheritance matters in UAE

Property inheritanceNita Maru

How so? Funeral and repatriation arrangements will most probably have to be done by strangers; not unless your family is also here.

If you own property in the UAE, your heirs will have to face a complicated and lengthy legal process to be able to possess inheritance you would have wanted them to have. However, this problem can be avoided if you ensure you leave a proper will in place.

Nita Maru of TWS Legal Consultants tells us more about inheritance matters in the UAE.

UAE inheritance system compared with those of other countries
In the UAE, inheritance for Muslim nationals is guided by Sharia laws, while the law of the deceased’s home country can be applied for non-Muslim expatriates.

However, there are many uncertainties regarding real estate inheritance issues. Unlike other jurisdictions, the UAE does not practice ‘right of survivorship’ (property passing on to surviving joint owner upon death of the other, as would be the case in Commonwealth jurisdictions), and the local courts will need to make the final decisions.

Matters of inheritance coming before the Dubai courts are heard by one or more judges. Juries are not used.

Furthermore, unlike in some Western jurisdictions, there is no system of precedent in Dubai or the UAE. Judgments of some higher courts are published, not because they are binding on lower courts, to provide useful evidence of future judicial interpretation and practice.

Concerns of clients who want to arrange for property bequests
The most common concerns are from expatriates that have bought property here either in their sole name or jointly with their spouse. They are confused as to which inheritance laws apply to their assets upon their demise, and usually assume that the laws of their native country automatically prevail over local Sharia laws.

Inheritance laws in Dubai are not as straightforward nor the same as those back in the Western countries. If an expatriate owns property in Dubai and passes away, the laws of their home country may not apply to their assets held within the UAE, especially those that are fixed and immovable.

Matters of inheritance in the UAE are governed by Federal Law No. 5 of 1985 regarding the law of Civil Transactions in the UAE (the “Civil Code”), and by Federal Law No. 28 of 2005 regarding the UAE Personal Affairs Law (the “Personal Affairs Law”).

As a general rule, inheritance issues for Muslims are dealt with in accordance with Sharia, whereas for non-Muslims, the law of the deceased’s home country can apply. Succession under Sharia law principally operates by a system of forced heirship or reserved shares.

Whereas the Civil Code states, in one part, that the law of the home country applies to matters of inheritance, in another part it states that where a will made by a non-Muslim involves the disposal of real estate in the UAE, then UAE law applies. This is consistent with the fact that in general, in the UAE, the law of the state where property is located applies to real property rights. This conflict has caused confusion amongst non-Muslims as to the inheritance of their property upon their demise.

To clarify the position The Personal Status Law 2005, was passed to add clarity to the terms of the Civil Code. Legal opinion in the UAE remains divided on whether this conflict is real or not.

Matters that require clarity
The lack of clarity affects all non-Muslims, especially those who own real estate in the UAE and maintain banking and other assets.

One can opt to rely on a will, but in many cases the better approach is a more evolved approach, involving offshore succession planning solutions and trusts. This ensures that Shariah Law does not apply to your estate and lengthy probate proceedings are avoided.

Seek the counsel of specialized lawyers who will work with you to ensure your personal assets, shares in a business and investments can be structured effectively for the long-term benefit of you and your family.

Ensure you are ready for all legalities
While the current legislation requires clarity, one thing remains clear, as an investor or property owner, one must always, ALWAYS take care of the legalities surrounding your assets and not leave your heirs befuddled when you go.

Expatriates that own assets in the UAE are often unaware of the pressing need to obtain legal advice regarding succession planning; not doing so means they run the risk of the deceased’s spouse and next of kin facing hardships with assets being frozen and bank accounts being blocked for a considerable length of time.




Source: Nita Maru, Solicitor and Managing Partner, TWS Legal Consultants

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