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Better to make a will to avoid legal hassles

Movable properties inheritance follows home country law unlike immovable ones.

Gulf News

Matters of the afterlife are not a favourite topic for many people, except probably for those in the death care business. But it's a serious issue that you should consider, especially if you are planning to invest or already have acquired assets in a foreign country.

The general understanding is that whatever a person owns at the time of his passing, whether it is real property, money, gold, stocks, bonds or clothes, will be distributed among his heirs. To ensure their assets are allocated as intended, and to ward off disputes among family members later on, some people draft their wills.

In many countries around the world, however, the principle of forced heirship applies, thereby negating the need to have a will written. This system allows surviving family members to pursue their rights to the estate in accordance with the law - no matter who the deceased person had appointed as beneficiaries, according to Steve Gregory, director of technical services at Holborn Assets.

But forced heirship is not strictly observed in all countries.

In the UAE, there are conflicting legal opinions as to how certain assets of expatriates should be dealt with. Questions are raised whether the intestacy (inheritance) laws of the expat's home country should prevail over the UAE's local processes, which follow the principles of Sharia.

There also seems to be a lack of consensus whether UAE law should be strictly followed only by UAE nationals, or by all Muslims, irrespective of nationality. To help steer clear of legal issues, it is advisable to make a will, otherwise the road to estate disbursement will likely be lengthier and costlier.

"The interpretation of inheritance laws and how they should be applied by the UAE courts has been a matter of debate among lawyers for some time," says Yvonne Tsui, principal director of Expat Wills, a specialist wills-writing firm in the UAE.

"It should be appreciated that UAE court decisions are not based on any system of binding precedent, this is very different from many common law jurisdictions such as England and India. Therefore, the precise interpretation of laws relating to inheritance is often an individual judge's view and his definition of the UAE Civil Code and statutory provisions at that time," Tsui adds.

Gregory puts it more simply: The UAE favours forced heirship for Muslims, whereby the distribution of movable and immovable assets is based on Sharia, which favours the male line. The same also applies to anyone - Muslim or not - who has not left a valid will.

"Under UAE law, a Muslim will must comply with Muslim inheritance rules. Hereby, an older male from the family, [son or grandfather or uncle, or the husband of an older daughter if need be], will inherit the bulk of the estate with instructions to ensure the financial security of the mother and children. Smaller shares in the estate may be left to the mother and children, if the testator wishes," he says.

Still, other legal sources lean towards the view that Sharia applies to inheritance issues for Muslim UAE nationals and for expats, the law of the deceased's home country will apply. But whether or not this rule applies to an expat's real estate is subject to different interpretations.

Lawyers say inheritance matters are governed principally by two federal rules in the UAE: the Civil Code and the Personal Affairs Law.

"Sharia will always be applied in two situations. First, inheritance issues for Muslims, both UAE nationals and expatriates, who die in the UAE will be dealt with in accordance with Sharia. Second, inheritance issues for immovable assets located in the UAE will be determined under Sharia," says lawyer Rasha Al Saeed of Baker Botts, an international law firm with offices in the UAE.

As to what specific provision applies to which assets in the UAE, the lawyer draws a distinction between movable and immovable properties.

"The UAE Civil Code provides that the law of the home country of an expatriate will apply to determine how the movable assets [cash, investments, cars, personal items, etc] in an estate should be distributed. However, note that the heirs may choose to apply Sharia," Al Saeed points out.

She says immovable assets (real property) in the country are governed by Article 17 (5) of the Code, which states that "the law of the UAE shall apply to wills made by aliens disposing of their real property located in the state [UAE].

"Therefore, the interest of the heirs of the deceased in real property located in the UAE and owned by the deceased will be determined under the laws of the UAE, ie., in accordance with Sharia. The laws of the home country of the deceased will not be applied."

So, whether or not there is a will and whether that will is governed by law of another jurisdiction, Al Saeed opines, the UAE-based immovable property of an expatriate will be governed by Sharia.

Have you made a will? What problems did you face? What steps have you taken to ensure your family does not suffer due to such issues?