HomeGULF NEWS LATESTHow the new UAE law changes will affect expat parents

How the new UAE law changes will affect expat parents

A number of changes to the UAE penal and civil codes, announced on 8 November 2020, look likely to affect expat parents living in the UAE by amending various aspects of the law that apply to families.

“At the outset, we note that amongst the widespread coverage of the changes in the UAE’s laws, the official text of the changes has not been made available at the time of writing,” says Michael Kortbawi, partner at BSA Ahmad Bin Hezeem & Associates LLP. “Nonetheless, these changes usher in a broadening of personal freedoms and equal protections, clearly showing that the UAE is taking concrete steps to establish itself the destination of choice for expatriates.”

Introduced as a positive step to align the country’s legal foundation with its commitment to tolerance, as well as to boost its status as an attractive destination for expats to live and work, we spoke to UAE lawyers about what these changes mean for UAE expat parents…

What do the changes to laws on inheritance mean for expat parents in the UAE?

“Until now, in some cases, if an expatriate died without a Will, the family of a deceased person would find that the deceased’s assets were divided as per Sharia law – which expats were not used to or did not usually favour,” says Michael Kortbawi, partner at BSA Ahmad Bin Hezeem & Associates LLP.

“Previously, if a non-Muslim expat failed to specifically petition to the court to apply their home country’s law to their will upon their death, the UAE courts would apply Sharia law by default.” This would involve some mandatory rules of division of your estate between certain members of your family, which may not always be aligned with your wishes or what you would expect.

However, the new changes stipulate that, if you have not made a Will at the time of death, the inheritance would be dealt with according to the law of your country of nationality.

“With the announced changes, we expect the citizenship of the deceased to dictate how assets will be divided unless there is a written Will (which may itself provide how to distribute assets and which law governs its execution),” says Kortbawi. “Therefore, we expect citizenship, more than religion, to play a part in inheritance.”

“An exception however remains with respect to UAE real estate,” points out Ruksana Ellahi, senior associate at Al Tamimi & Company, “which shall continue to be subject to UAE laws, unless a Will has been registered in the UAE.”

What happens if the parent who passes away without a Will has dual nationality?

“The detailed amendments have not yet been released therefore it is still not confirmed,” says Ruksana Ellahi. “However, if there was a conflict in respect of the laws of the two countries, then there is a possibility that the UAE law and principles of Sharia would apply.”

Do these changes mean it is less important for expat parents in the UAE to make a Will?

Although it may seem that there is now less of a need to arrange a Will for expats living in the UAE, there are some key reasons why you may still want to:

1) You may not agree with the intestacy laws of your country of citizenship

“Inheritance generally take effect in one of two ways: (1) as per the terms in a valid Will; or (2) in the absence of a valid Will, as per intestacy laws [laws relating to the estate of a person without a Will],” says Kortbawi.

“Previously, if a non-Muslim person died in the UAE, the estate could be divided according to Sharia law. Now, with the announced changes, when such a person dies without a Will, the assets can be divided among his or her heirs according to the intestacy laws of the deceased’s country of citizenship.

“Intestacy laws change from one jurisdiction to another, and even in a person’s home jurisdiction, intestacy law may not align with what the deceased would have wanted. Therefore, it is advisable to have a Will to allow the assets of the deceased to pass as the deceased person intended.”

2) Making a Will makes things easier for your loved ones

Ruksana Ellahi from Al Tamimi & Company says: “Many non-Muslim expatriates living in the UAE are unaware that in the absence of a registered Will, recognised by the UAE legal system, the process of transferring their assets after death can be time consuming, costly and fraught with legal complexity.

“As a practical matter, access to the assets of the deceased individual is restricted. Assets cannot be transferred or be dealt with in any manner without direction from the local Court. In some circumstances, this can give rise to delays and financial complications at a critical time.”

3) It’s still crucial to arrange guardianship of your child

The importance of arranging guardianship for your child has also not been affected by the announced legal amendments so far. “Serious complications can occur when infant children are left behind and no guardianship arrangement recognised in this country has been put in place,” says Ellahi of Al Tamimi & Company. “In default, Sharia inheritance rules would apply to assets and it would be at the discretion of a local judge to choose the child’s guardian.

“Under UAE law, the father is the guardian of the child or children. In the event that the father passes away, the closest male relative on the father’s side of the family is appointed as guardian of any minor children. The mother of the children would retain custody, therefore the children may stay in her physical residence, subject to conditions such as her not remarrying. If a woman passes away in the UAE, then the father would remain the guardian and custodian of any minor children.

“The amendments did not specifically mention provisions for guardianship of minors or the issues surrounding guardianship and therefore it would still be advisable for parents to consider executing a Will and include guardians for their children.”

Will Sharia still be applied in the case of expats who are Muslim if they do not make a Will?

“If a Muslim dies in the UAE without a Will, Islamic Sharia principles as per the Personal Status Law will still apply to Muslims expats in the UAE,” says Ruksana Ellahi of Al Tamimi & Company. “The new amendments to the Federal Laws on inheritance will only apply to non-Muslim expats. However, we still need to review the official published amendments to be sure of the applicability of the new laws.”

What are the options for getting a Will for expat parents now and the approximate costs?

“Although the exact cost varies, until now it usually involved drafting costs (if being drafted by a professional service), translation costs (if registering the will at the local courts) and registration costs,” says Kortbawi. “Registering a will with the DIFC could cost anywhere from Dh5,000 – Dh15,000. Although registering a Will at the Dubai courts is generally less expensive, the text of the changes remains to be seen, which might allow for Will practices from home jurisdictions to be recognised in the UAE.”

Ruksana Ellahi of Al Tamimi & Company expands: “There are a number of options available to allow a non-Muslim to register a Will in the UAE. Wills can be registered with the Dubai International Financial Centre (DIFC), at the Abu Dhabi Judicial Department (ADJD) or at Dubai Courts.

DIFC

The DIFC Wills Service Centre released new rules to allow non-Muslims to include all of their worldwide assets in a DIFC Will. The DIFC Wills Service Centre allows eligible non-Muslim individuals to formally register their English language Will according to the principles of testamentary freedom. This allows individuals to choose to dispose of their UAE or worldwide based assets upon their death as they see fit. The fees for registering a single Will in DIFC amounts to Dh10,000 + VAT.

Abu Dhabi

The Abu Dhabi Judicial Department (“ADJD”) has rules relating to succession and inheritance matters for Non-Muslims holding assets in the UAE. The new Office allows non-Muslims with assets in Abu Dhabi and other Emirates to have the option to distribute their estates as they so choose. It also offers flexible legal options, where previously there was inflexibility, to assist non-Muslim families in the event of death. The fees for registering a single Will in ADJD amount to Dh950 plus legal stamping fees, since the Will in ADJD needs to be in bilingual format.

Dubai

The Dubai Local Courts allow non-Muslims to notarise a bilingual Will before a Notary Public.

Does the change to the law alter the situation with regards to custody of children in the case of a parental divorce?

“Previously, if a Muslim couple divorced in the UAE, Sharia law applied to the divorce, division of assets, alimony, and custody,” says Michael Kortbawi, partner at BSA Ahmad Bin Hezeem & Associates LLP. “For non-Muslim expatriates that divorced in the UAE, either Sharia law or the law of the home country applied instead (as per their choice), and in cases of differing nationalities, the law of the husband’s nationality would apply. Ultimately, UAE law would apply for any aspects that remained unaddressed by the foreign law.

“Noting that the actual text of the changes has not been made available, we expect that there will be a change in relation to children and custody in some cases. We expect that Sharia is less likely to apply as the divorce will proceed as per the laws of the country where the marriage took place, regardless of the individual’s nationality or religion. Therefore, in relation to children and custody, the law of the place of marriage will be relevant.”

Do the law changes impact expat parents in any other ways?

Michael Kortbawi, partner at BSA Ahmad Bin Hezeem & Associates LLP, says: “The recent changes cover multiple areas including cohabitation, consensual sex, alcohol consumption, and divorce. We expect that the changes could allow unmarried parents to legally share a home in the UAE and to engage in consensual sex. In the event of a divorce, the laws of the country where the marriage took place may apply.

“These changes are intended to enhance the well-being of all UAE residents. Expat parents will certainly benefit from these developments.”

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