This article is designed to give you an overview of the sensible and practical steps that you should take to protect yourself and your family while resident in the UAE. I have written about each of these topics before, on this website, in the press, talked about it on radio and in presentations but it is so important that everyone understands what they should do to plan – just in case – and this article brings these topics together.
Sometimes in life the worse does happen, people die, and it is essential to be prepared, even more so when living in the UAE.
In 15 years in the UAE I have been involved in a number of cases where a client has died and it is a particularly stressful experience due to local complications. Planning ahead and doing all you can so that you or your family are not left without access to money matters a great deal. This is not about being maudlin, but about the right things to do.
UAE’s personal status laws
There was a big, positive change to these in laws that concern how we live, marriage, divorce, inheritance and more, in November 2020. You can find a comprehensive overview in this article:
This was truly a positive move and a huge improvement but the laws that relate to assets and what happens on death are still significantly different to those in our home countries.
What happens to bank accounts in the event of death in the UAE?
When a UAE resident dies, their bank accounts are frozen and this happens very quickly indeed. Far quicker than you might expect and it will remain frozen until the court decides what should happen to the cash in them.
If you have a joint bank account with your spouse you will not have access to the account. One change in the personal status law changes is that a joint account holder can apply for access to up to 50% of the balance but must do so within 10 days, ideally sooner.
I have heard people say that is their spouse dies, they’ll just transfer all the money out but it’s not so simple. Firstly, account freezing can happen in an hour. Secondly, you may well be upset and not thinking straight or able to access the account. Thirdly, you could have been in accident together and not be physically able to do anything.
Bear in mind that taking money from an account in the sole name of your spouse, even if you know the access details, is technically illegal and can lead to other problems.
It is important that all adults have their own bank account in the UAE. You do not need to have a regular income to have a basic bank account and it does not matter what type of residency visa you have either. Keep the money that you have here divided between you for maximum access.
I recommend that husbands and wives have accounts with different banks so there is no risk of them being linked. I know of cases where an account was opened for a non-working wife but the bank had them marked as linked so when his account was frozen, hers was too!
Most banks can open non-salary accounts, although few advertise this and some have high minimum balances. Simple options are the basic digital accounts offered by Mashreq (Neo) and Emirates NBD (LIV). Debit cards are available too.
Over and above the money you need for day to day, or month to month, it is better to keep surplus cash and your emergency fund outside of the UAE.
And if your bank says they don’t freeze accounts, they are breaking the law and cannot guarantee you access.
Wills and what to do
While the changes in the personal status laws mean that home country inheritance laws can be recognised here, its not quite as simple as it sounds. Your home country wills are not recognised in the UAE so standard inheritance provisions from your home country will apply, which may not be quite what you want. Certainly, if your home country has a system of forced heirship (common across Europe) you may want something different.
This article covers all you need to know about wills, who needs them, the types that are available, guardianship and how to get them written.
Having wills matters and they need to be written properly. The right one depends on your situation and I can give you advice on what you need. In some cases, you need a home country will and also a UAE one.
Wills are not just about money and assets and one of the main reasons for writing them is for the benefit of your children. Guardianship is a major issue and if you do not have a will that specifies permanent guardians in the event of the death of both parents, the decision will be made by a court and may not be what you would have wanted.
Temporary guardianship is also something to consider when you have minor children, as your permanent guardians are likely to be in another country. In normal circumstances it can take someone a few days to get here to start picking up the pieces, but that is further complicated by travel issues during the current Covid19 pandemic with restrictions and quarantine periods.
DIY wills are a bad idea and a false economy. Protecting your family is too important not to do it properly and I have an arrangement with a legal practice that is very cost effective. The intention is to keep the fees down as much as possible and the process as simple as it can be. In the vast majority of cases everything can be done online, without any physical meetings but you still get my advice as to what is best in your particular situation.
I am not a lawyer but I am very conversant with these requirements and UAE law, and even give presentations to commercial legal practices about Sharia law and wills.
Where should we keep the money outside of the UAE?
You can send money to bank account in a home country but the issue here is one of exchange rates. If you need to bring it back to the UAE, to pay your rent for example, you may lose on the rate of exchange. Additionally, your intention may be not to return home so you may not want your cash there.
The logical option for most people is to have an offshore bank account. If you have an account denominated in US Dollars you have no real currency risk as the UAE Dirham is pegged to the US Dollar.
You don’t have to have large amounts of money to open an offshore account and I can help you open an account with a minimum balance of just $7,000 (AED 25,707) and you get a few months to build up to the minimum amount.
The offshore account can be in joint names, Sharia law will not apply, and you can even have a debit card if required. Currency options are US Dollars, Sterling, Euros and Australian Dollars. I am authorised to certify documents for applications I process and there is no charge for that.
More info here: The benefits of offshore banking for expats
What else should we do?
Keep a list of all your assets, bank accounts, investments, life policies, shares and so on, in one place and make sure your nearest and dearest know where to find it. Update this following any changes. Perhaps email copies to family so it is always available.
If you have financial dependents, a spouse, children, you should have life cover in place for their benefit. It is hard enough to lose your partner but a bad situation will be even worse if they are left without financial support.
The pay-out from a life policy is there to make life easier, to take away financial worries, to allow those left behind to rebuild their lives, to give choices. We hope the premiums are a waste of money but if you die, it will be the best money ever spent.
And here: Family matters. Some things never change
A simple term assurance policy doesn’t need to be expensive and even if money is a little tight right now, some cover is far better than nothing.
How do I start getting these things in place?
The first step is that we have a chat. We need to establish what you need, what you want, what is best in your personal circumstances. Following that I make recommendations, in writing, and we work to set up everything that is required.
Real financial planning is what I do and protecting families is the most important part. Taking the right financial steps is an act of love, an act of kindness, and having dealt with bereaved families for many years, I know what a difference it can make. It really matters.
To arrange a discussion on any aspect of your personal financial planning, please email me at firstname.lastname@example.org
I write articles such as this one as part of the holistic personal financial planning service that I provide to expats, and the general consumer, financial and legal information that I provide in The National newspaper, and on the Facebook group British Expats Dubai.
Please take a look at the other useful articles on this website.