How Does An Australian Expat Establish A Will In The UAE?
How Does An Australian Expat Establish A Will In The UAE? – As we detailed in some of our recent blog posts on how to structure yourself financially as an Australian expat in the UAE, if you pass away in the UAE, there is no right of survivor-ship meaning UAE based assets are not passed to the surviving spouse.
Instead, the assets of a deceased person will be distributed as per sharia law which heavily favours male relatives, meaning that if you are an expat male and you pass away, most of your assets will NOT go to your surviving spouse. Additionally, your local bank account here will be frozen on death until probate occurs by the local court.
How would my UAE assets be distributed upon death?
The distribution of assets based on Sharia law where there is a absence of a will would look something like this.
Which Will is most appropriate for my situation and what are the costs?
In late 2017, the Abu Dhabi Judiciary Department (ADJD) created a facility for Non-Muslim residents of the UAE to register a Will, enabling their assets to be distributed as per the law of their home countries.
An ADJD Will covers all assets in the UAE with the notable exception of property in the emirates of Dubai and Ras Al Khaimah. For people with property in these emirates, a Dubai International Financial Centre (DIFC) Will is required. To register a full DIFC Will with the DIFC will cost aed10,000 for a single Will or aed15,000 for a Mirror Will (Husband and Wife), in addition to the cost of drafting a Will (approx. aed3,000 plus VAT).
For people who don’t have property in either of these emirates, the most cost effective option will most likely be the ADJD Will, which is priced as following:
- Registration: aed950 or aed1,900 for mirror
- Translation: aed850 for single Will or aed950 for mirror
- Drafting: aed3,000 plus 5%VAT approx (depending which firm used)
- Total = aed4,950 for a single Will, aed5,050 for Mirror
What assets does an ADJD Will cover?
- Your EOSB (end of service gratuity payment)
- Workman Compensation (12 month’s pay if death is related to occupation)
- Death in service benefits including company insurance schemes
- Your personal effects such as furniture, car, boat etc
- Local property (excluding property in Dubai or RAK)
- Local bank accounts
- Locally held shares or bonds
Could I not just shift my assets offshore?
Simply opening an offshore bank account or moving surplus funds back to an Australian bank account will somewhat mitigate sharia law, however residency and taxation must also be taken into consideration. Issues typically arise when you send regular surplus funds back to Australia and leave these amounts sitting in a bank account.
This behavior may present an opportunity for the regulators to question your behaviors (one of the tests for non-residency) and in turn your residency status.
Whilst this may seem to alleviate the issue of sharia law, there are a number of financial assets that cannot be moved as listed earlier such as your End of Service Benefit (EOSB), Death in service benefits, personal effects and Workmen Compensation.
Upon adding these assets up the sum can be quite substantial, meaning a Will should seriously be considered.
What about Guardianship of my Children?
Along with the distribution of assets, sharia law will also pass judgment over who receives the children in the event of your death. Contrary to what you might believe, this is not always the mother of the children.
It’s important to note that if both parents should pass away, the children of those parents will not necessarily be awarded to their family or relations and could very well become a ward of the state if a testament is not in place.
Most Will Writing companies in the UAE automatically include a Guardianship document in their Wills for no extra cost, allowing you to appoint both Temporary and Permanent Guardians in the event of death to both parents.
If you choose not to take out a Will in the UAE and have children here that are not yet of age, it is critical to at least create a Guardianship document.
General advice warning. The information on this site is of a general nature. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions.