Preparing for the worst
As an expat, it’s important to have a plan in place for your demise
If your family is left behind grieving, stranded and strapped for cash, it won’t be because you did something wrong. It will be because you did nothing.
As an expat living in the UAE you can be forgiven for thinking about the here and now and not contemplating what might happen if you pass away. But it is more important to protect what you have - and your family - by deciding now what to do when faced with death and consider succession planning.
Nita Maru looks at what you can do to plan for the unthinkable:
Personal Planning The Government of Dubai’s official website emphasises that “The UAE Courts will adhere to Sharia law in any situation where there is no will in place”.
This means that if you pass away in the UAE without having planned your family’s future, local authorities will examine your estate and distribute it according to Sharia law, which may differ greatly from what you intend. With regards to real estate inheritance issues under Sharia Law, the UAE does not practise ‘right of survivorship’ (where property passes automatically to a surviving joint owner upon death of the other).
Meanwhile, personal assets, including bank accounts, will be frozen until liabilities have been discharged. Shared assets will also be frozen until the issues of inheritance are determined, and family members are often left without access to money during this period.
Dying intestate (without a will) could also leave debts unpaid until the estate is finally dealt with by the courts, and your family’s ongoing financial requirements are met.
Preserving your business
As a business owner, a significant portion of your wealth - and your family’s main source of future income - will be tied up in your business. The success of your estate planning is dependent upon this business being transferred smoothly, or sold to a third party
for a fair price. Either way, it takes considerable planning and preparation, and should be ranked high on your priority list.
If you do not have a proper business succession in place, you simply cannot be sure what will happen after your death: whether your family will be provided for, who will look after your business.
All businesses - whether sole proprietor firms, partnerships, limited liability companies or free zone corporations - should plan for the transfer, succession and/or sale when faced with the death of an owner.
Safeguarding your family
If you are parents, a will can be used to specify who must look after your young children after your deaths. The absence of a will may persuade authorities to intervene in guardianship matters, especially when both parents die simultaneously, and there is a possibility that their care may be entrusted to those you may not want.
If you are married, it is wrong to assume that your spouse will get/inherit everything you own. Sharia Law is based on a fixed share allocation system for the disbursement of assets, and a wife is entitled to receive only one-eighth of her deceased husband’s total estate if they have children.
DIFC Wills and Probate Registry
The new regime from the DIFC: The ‘DIFC Wills and Probate Registry’ (the Registry) provides certainty for non-Muslim expatriates to pass on their Dubai estate in the event of death to their chosen beneficiaries. It also allows non-Muslims to prepare wills to cover the issue of guardianship.
In order to register a will at the registry, the testator must be of non-Muslim faith, over 21 years of age, have minors living with them in Dubai (if a guardianship provision within the will is required) and/or have assets in Dubai.
Expatriates that are contemplating preparing a DIFC will or those that have existing wills may wish to seek professional legal advice from licensed and registered law firms in Dubai regarding the opportunity the Registry avails.
It is imperative that expats explore the necessary steps they need to take to ensure that their families are protected and are prepared financially for the unexpected.
You should be prepared today for all that may and can happen tomorrow.