Where there’s a will there’s a way to protect your family

If you have assets, and more importantly, if you have children, then you need a will. This is a subject that many people are reluctant to address but there are many misconceptions and an all too common reluctance to talk about the relevant issues. In this article I want to set out a few facts and answer the most popular questions that I am asked.

Who needs a will?

In short, just about everyone. If you have assets you will want to specify you will receive them after your death. By leaving a will that clearly states who should get your property and money when you die, you can prevent unnecessary distress at an already difficult time for your family or friends. Assets can also be distributed faster.

If you have children it is important to have a will so that in the terrible event of both parents dying you get to specify who would bring them up. If you do not specify guardians then the decision will rest with a judge and they will choose whom they deem to be suitable which could well be family members who do not share your views.

What happens if you die without one?

will 2Without a will you have no say in what happens and anything you own will be distributed in accordance with the law of the land where they are located or your home country laws, and this may not be what you want, especially as a spouse will not be a sole beneficiary.

If you die intestate, the legal term used when someone dies without a will, it not only complicates matters but it can also take much longer for the estate to be settled, that is, for the assets to be distributed. If you have a spouse or children who need money to live on this can be a real problem.

Will the UAE authorities take my children?

I have seen this rather scaremongering claim many times but it is simply not true. The UAE Government does not want to take the children of expats and the only time a child may be taken into care is if both parents die, or are incapacitated, and there are no instructions as to who should look after them in the short term, nor any family members in the vicinity who can step in.

Do I need a UAE will when I am living here?

This depends on your personal circumstances. For many expats who have limited assets in the UAE and do not own property here drawing up a second local will is often unnecessary. If you choose not to make a local will then Sharia law will be applied to assets held in the UAE, but not those offshore or in a home country. (Unless of course, you are from a country that follows Sharia law.)

If you do not write a will then your UAE assets will be distributed in accordance with local law. If these are minimal you may not require a local will and a home country will could be more important. It is always best to discuss what is right for you.

What about the new DIFC option?

The DIFC (Dubai International Financial Centre) Probate Registry was set up in 2015 and is a method of registering wills that means that Sharia law will not apply. This route is available to non-Muslims only and essentially means that the individual has free will over the distribution of their UAE assets and Sharia law will not be applied.

This is a useful option for anyone who own property in Dubai as it is the only way to ensure that the property will be passed wholly to your spouse, or to your preferred beneficiaries. It is not cheap with the registration fees being AED 10,000 for a single person, or AED 15,000 for a married couple, on top of the cost of writing an appropriate will, but that is still a small sum in comparison to a property worth several million Dirhams.

 What is the temporary guardianship about?

family-baby-ssIf you have children under the age of majority, your wills should specify your chosen permanent guardians in the event of the death of both parents. In many cases the permanent guardians will be resident in a home country so this is a document that is arranged as an adjunct to a main will and states who you wish to look after your children before the permanent guardians arrive in the UAE, and also allows them to take a day or so to get organised before jumping on a plane. It means that the children can stay with people they know, in a familiar place, thus lessening the shock and loss at a traumatic time.

This is not mandatory but is a ‘belt and braces’ approach and I believe it to be a good idea for younger children particularly. If arranged at the same time as the main wills there is no cost for arranging this Letter of Wishes for an Interim Guardian.

We’re Muslim so what are our options?

A Muslim cannot contract around Sharia law in respect of their assets in the GCC and the options are somewhat limited, but they do exist. Generally an individual has free choice regarding one third of their assets but there may be the ability to make gifts in accordance with the Hiba guidelines.

It is also possible for Muslims to specify guardians for minor children if both parents agree. Under UAE law if one parent dies the surviving natural parent will have care of the child, unless a court rules to the contrary which is not common. If both parents die, Sharia provisions come into effect which generally favour the paternal half of the family unless the parents have jointly agreed who will be responsible for the care prior to death.

It is important to get advice from a lawyer who is an expert in this area. It is worth pointing out that contrary to what you may have seen written elsewhere there is no such thing as a Sharia compliant will for non-Muslims.

 How long does a will last?

wedding-rings-smallA will can last indefinitely but in practice they will need to be rewritten later in life as circumstances change. In most countries a will is invalidated by marriage. This means that unless a new one is written the laws of intestacy will apply. This is not the case upon divorce with an ex-partner often retaining a claim unless a new will is made.

It is usual to write new wills after the birth of a first child (which can include provision for any future children) and at retirement, but requirement depends on your situation.

How do I go about getting a will?

Wills should only be written by expert lawyers. I work with a locally based legal practice who write the wills for my clients but I have streamlined the process and reduced the fees. The procedure is that you meet with me to clarify your particular circumstances, to obtain answers to questions, and to decide what type of will you need. I will go through the implications of Sharia law and run through what else you can do to protect your family.

Once you have decided to go ahead, you have to complete a questionnaire and then the lawyers can start preparing your wills but you do not have to have additional meetings with them as we will oversee the process. Note that there is no charge for the initial meeting to discuss options and requirements.

What else do I need to consider?

life policy cash moneyThe majority of expats would prefer that Sharia law did not apply to their assets and want to make financial provision for their spouse and children. As bank accounts in the UAE are frozen in the event of the death of any account-holder steps should be taken to ensure that the remaining spouse is not without access to money.

I recommend separate bank accounts and keeping the majority of money offshore. Life policies should be in place and set up correctly which often means putting them in trust to avoid inheritance tax and ensure a faster payout of proceeds.

More information can be found in these articles:

The benefits of offshore banking for expats

Protecting what matters most – your-family

What will it cost?                                                                                                                                                                                                                                                                                                       The costs will vary depending on a number of factors including nationality, religion, where assets are held, complexity of situation and other requirements. For UK and Commonwealth citizens who require relatively straightforward wills written in accordance with home country rules the fees start at AED 3,000. This is for both single people and couples with almost identical requirements. If arranging a UAE will this includes a Letter of Wishes at no extra cost if arranged at the same time.

If you have an existing will that reflects your current wishes and simply require a Letter of Wishes as a standalone document, or to stand alongside a home country will this will usually cost AED 1,500-1,750.

How do I get started?

The first step is to arrange a meeting with me and we can take it from there. No pressure, no obligation just professional and ethical advice tailored to your specific circumstances. During the meeting I will also explain the implications of Sharia will in respect of bank accounts and other assets.

To arrange a meeting to discuss arranging a will, or for advice on any other personal financial planning issue, please email me at keren@holbornassets.com

Podcast of the radio show that included this topic: Dubai Today on Dubai Eye 10/10/16 Wills + changes to UK State pensions

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About financialuae

A qualified and experienced Independent Financial Adviser based in Dubai, UAE. Professional and ethical. Freelance writer on personal financial issues & the On Your Side column in The National. Regular radio guest. Senior Partner at Holborn Assets LLC, Dubai, UAE.
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4 Responses to Where there’s a will there’s a way to protect your family

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