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Expats in the UAE: protect your family with the new succession laws for non-Muslims
Expats often relocate to the United Arab Emirates (UAE) thinking that it will only be temporary. However, many end up living there much longer than originally planned. It is therefore important to understand the laws that apply in the event of death - and even more so since a new law for non-Muslims came into force on 1 February, 2023. This newly introduced law applies to the entire non-Muslim population residing in the United Arab Emirates, whether they are Emirati nationals or expats.
Prior to moving abroad, an essential first step is to prepare a will, specifically with regard to any real estate properties located outside of the UAE. However, such arrangements alone are not always enough. Once you become a resident in the Emirates, we strongly recommend that you organise your estate planning locally. This will ensure that your assets are distributed according to your wishes and not according to applicable laws in the absence of a will.
A new family law for non-Muslims
The UAE has introduced a new federal law on the personal status of non-Muslims, which came into force on 1 February. It covers key family topics such as marriage, divorce, child custody and succession law.
These recent legislative changes mean that succession matters for non-Muslims are now regulated differently than for Muslims, who remain subject to Shariah law.
Focusing on succession changes for non-Muslims
With the introduction of the new law, in the absence of a will, Shariah law will no longer apply by default in non-Muslim inheritance cases.
In the absence of a will:
If a person passes away without leaving a will, their estate will be distributed as follows:
- In the event of a surviving spouse and children: half of the estate will go to the surviving spouse and the other half will be equally divided among the children, without distinction between genders.
- In the absence of children: half of the estate will go to the surviving spouse and the other half will be divided equally between the parents of the deceased.
- In the event of a surviving spouse and one surviving parent: half of the estate will go to the spouse and the other half will be divided in two equal parts:
- One half will go to the surviving parent.
- The other half will be divided equally among the siblings of the deceased.
- In the event of only one surviving parent and the absence of children, a spouse or siblings of the deceased: the entire estate will go to the surviving parent.
- In the absence of a spouse, children and parents: the entire estate will be equally divided among the siblings of the deceased.
It should be noted, however, that the new law does not seem to cover all possible scenarios. For instance, the law overlooks the possibility that a person could be survived by descendants but not a spouse. According to local legal practitioners, in such a situation, the children would equally share the entire inheritance, without distinction between genders.
Furthermore, if a child dies before the deceased, it is not clear whether the former’s children (the deceased’s grandchildren) will receive their inheritance.
With a will: no forced heirship
The new law gives non-Muslims the option to prepare a will that allows them to leave their estate to whomever they wish, without being restricted by forced heirship rules.
Read also: Succession planning in the Middle East | Lombard Odier
Options available for registering a will
Writing and filing a will is not a trivial process. In fact, the UAE enforces strict regulations, and if these are not respected, the will may be declared null and void. It is therefore essential that you seek the advice of local specialists and certified will drafters.
There are several different authorities and options available for registering a will in the UAE. They can be registered with the Dubai International Financial Centre ("DIFC"), the Abu Dhabi Judicial Department ("ADJD") or with the Dubai Court.
Regarding the DIFC courts, it is important to note that any lawyer advising on the drafting and registration of wills must be registered with the DIFC Wills Service. The list of registered lawyers is available at the DIFC Wills Draftsmen Register.
What about Muslim residents?
This new decree-law does not apply to Muslims (citizens of the Emirates or foreigners), whose estate will continue to be settled in accordance with Shariah law.
However, there are certain Shariah-compliant estate planning solutions that can be implemented in a proactive manner, such as inter vivos donations.
Read also: How can a trust be Shariah-compliant? | Lombard Odier
In conclusion: think about the future of your family
This new decree-law is now in force throughout the Emirates with the primary goal of accommodating its growing population of non-Muslim expats. It is inspired in particular by the traditional British common law concepts and in accordance with the principle of gender equality.
Preparing a will remains a useful precaution that can simplify any succession process and allows for greater flexibility in the choice of beneficiaries.
Finally, we wish to highlight that in certain situations, such as when none of the heirs reside in the UAE, the enforcement of a will can become a complicated affair. In such situations, it is best to appoint an inheritance lawyer who will take the necessary steps in the relevant courts on behalf of the deceased and the heirs. It is also essential to obtain proper legal advice to ensure the validity and compliance of any will under UAE law, particularly in the early stages of drafting.
Disclaimer: Lombard Odier does not provide tax advice. Therefore, you must verify the above and all other information provided in the marketing communication or otherwise review it with your external tax advisors.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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