Whilst most people are aware that Sharia law is the legal framework used in the GCC countries, not all expats have realised that this can affect them and their money.

• Did you know that on death your bank accounts and assets in the UAE will be frozen?
• Did you realise that your spouse, or other family members, may not get access for many months? Or that they may only get a small percentage?
• Are you aware that your assets may not automatically go to your spouse?

November 2020. Some information in this article has been superceded by new legislation so please see this article for the lastest details regarding the laws on death while in the UAE:

New personal laws in the UAE but what do they really mean for you?

Should anyone die whilst resident in the UAE, Sharia Law will be applied to any assets that are held in the UAE. This applies no matter the nationality, or religion, of the individual.

Any bank accounts in the name of the deceased will be frozen, including those in joint names. And if you think your bank is slow to action, be warned that this happens fast. This is one of the main reasons that I recommend that husbands and wives need to have their own bank account, ideally with separate banks. Bear in mind that you don’t need to have a salary to have a UAE bank account.

In addition to bank accounts being frozen, vehicles can be impounded, as can other assets, and there can be problems with continuing to run a business. Although there will usually be no issue with family remaining in a UAE property, it cannot be sold until there is a court ruling regarding the estate, and it is also subject to Sharia distribution.

In due course assets would be distributed by the courts in accordance with Sharia Law and this could take weeks, or even months, although there is no fixed timescale. I have even heard of cases where accounts have been frozen for well over a year before being reopened. As dependents’ visas could be cancelled after 30 days, the intended beneficiaries many not even be in the country to deal with these matters.

The exact distribution of UAE assets depends on your family set up but this chart gives a good indication of how assets can be distributed under Sharia Law. Obviously this will vary depending on your family set up.

If you are happy with this then all is fine, but many expats would like it to be different. Do bear in mind that where you are sure that family members will pass assets on to a spouse in due course, you cannot guarantee this, and there can also be home country tax liabilities to consider.

What steps can you take?

If you do not want Sharia law to apply to your assets there are a few steps you can take.

Firstly, keep the bulk of your savings and assets outside the UAE. You don’t have to send money back to a home country or lose out on currency exchange rates which is why having an offshore bank account is a good tool for most expats. You don’t have to have huge amounts of cash to open one and it is simpler than you might think.

See this link for more information about the benefits and how to open an account:

The benefits of offshore banking for expats

Another option is to write a will that specifies your wishes on death but this can be done a number of ways, with varying costs and guarantees. Note that any wills written for your home country are not recognised in the UAE.

See this link for an overview on writing wills for UAE residents and also for writing home country wills which are often required, especially if you have children.

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

There is not a one-size-fits-all solution for the best way to do this so expert advice is required. Whilst the DIFC Wills Centre is, in my opinion, the most secure option it is only available to non-Muslims. It is also quite expensive but still a relatively small sum in relation to the value of a property.

Any assets held outside of the GCC countries are not affected, unless of course they are held in another country that applies Sharia law. They could however, be subject to other rules or restrictions regarding access following death, although in most cases a joint account holder will have full access. The rules regarding inheritance, and related taxes, varies by country. If you are British, be aware that your estate is subject to inheritance tax on death, no matter where assets are located or where you have been residing.

Estate planning is another large topic but one I can advise on in many cases.

What else should we consider?

In addition to writing a suitable will, if you are a two car household, you may want to have one in each name.

If your employer provides life cover, ensure that you have nominated a beneficiary and find out if this is paid in the UAE, or elsewhere.

If you decide that you don’t require a will for the UAE but you have minor children, you should consider arranging temporary guardianship for them. (See link regarding wills for details.)

Protecting your family matters and you should have life cover in place, set up properly, to ensure that they will be okay financially should the worst happen. Forward planning is essential to ensure that your family is not left financially, as well as emotionally, bereft in the event of your death.

Is your family financially protected if you die? Six common errors

If I can assist you with any personal financial planning issues, please contact me at keren@holbornassets.com 

I write articles such as this one as part of the holistic personal financial planning service and that I provide to expats, and the general consumer, financial and legal information that I provide in The National newspaper, on radio and on the Facebook group British Expats Dubai.  You will find many other useful articles on this website.