DIFC Wills: Protect Your Assets in Dubai
Prior to the launch of Dubai International Financial Centre (“DIFC”) Wills and Probate Registry, Dubai Courts would normally apply Sharia law to non-Muslims for the question of how to distribute their assets in Dubai in the event of their deaths.
The DIFC Wills and Probate Registry (“WPR”) is an administrative body that collaborates with the DIFC Courts in the production of grants and court orders for the distribution of assets and as well as guardianship. DIFC is constantly working towards broadening the applications of its regulations and laws nationwide, however the application of the WPR is limited. Only non-Muslims are able to register their wills with the DIFC Wills and Probate Service and only the assets situated in the Emirate of Dubai can be included in such wills.
While wills are a useful way to ensure that your assets are distributed the way you want it to be, they not only need to be in compliance with the DIFC Rules (including the Wills and Probate Registry Rules) but also they cannot be in contradiction with the UAE laws and regulations. Therefore, it is important to have someone with extensive experience and knowledge on how to draft wills that comply with the rules of DIFC and the UAE as a whole.
To register a will, WPR charges certain fees. For a single will, it charges a fee of AED 10,000 on the execution and witnessing of the will before a registry officer at the registry. If you and your spouse are simultaneously executing (registering) two mirror wills*, WPR charges a fee of AED 15,000 on execution of both wills before a registry officer. If you are only registering guardianship wills, WPR charges a fee of AED 5,000 on the execution and witnessing of a single guardianship will before a registry officer and AED 7,500 on the execution and witnessing of two mirror guardianship wills.
While the costs of having a professional draft your will can be more than doing your own will, it is extremely important (both to you and your family) to have wills that are error-free, unambiguous and in compliance with the laws. If you make mistakes in your will, you are not going to be around to explain yourself or to make corrections when the time comes to administer your will. Therefore, it is important to get professional help to write your will.
* Mirror wills are designed for couples (usually a wife and husband) that are nearly identical and which both leave assets to the same beneficiary or beneficiaries.
Impact of the new DIFC Wills and Probate Registry on Expats
On May 4, 2015, the Dubai International Financial Centre (“DIFC”) launched the DIFC Wills and Probate Registry (“Registry”). Following this Registry, DIFC became the first and only, at this time, jurisdiction in the MENA region where non-Muslim foreign nationals with assets in the Emirate of Dubai are able to register their wills under common law principles, whereby a testator has freedom to dispose of their estate, rather than being subject to any specific legal rules regarding distribution or a forced heirship regime such as Sharia inheritance law. The complex battle between applying Sharia law and the law of the foreign deceased, coupled with costly and time consuming Dubai Courts process in relation to inheritance and succession matters, had created legal and practical uncertainties for non-Muslim individuals regarding acquiring and maintaining assets in Dubai. To avoid expensive and lengthy court procedures regarding inheritance matters, and for other benefits, many foreign nationals transferred their real property assets into offshore setups (currently only possible within the Jebel Ali Free Zone Authority (“JAFZA”). The benefits of setting up an offshore company still continue to attract many foreign nationals, especially for structuring multiple assets. However, there can be situations in which an expat’s assets are not protected as the expat’s wishes after he or she is gone. In other words, foreign nationals with assets outside of Dubai are still at risk of being subject to Sharia law. The UAE does not recognize the right of survivorship and thus, even though the ownership of a property continues by way of shares in the property of the offshore company, the shares cannot pass down to the heirs of the deceased shareholder, hence the need for a proper will. In addition, there are certain costs associated with registering and maintaining an offshore company which may be justified in different situations, such as protecting multiple assets. The new DIFC Wills and Probate Rules complement the already established rules and mechanisms in the UAE, for the purposes of safeguarding your assets. The Registry now gives peace of mind for non-Muslim expats who own property in Dubai to protect their families and to assure that Sharia law would not govern the wills if something goes wrong. The Registry entitles these individuals to safeguard their assets in Dubai and have them distributed as their wishes should they die. It is important to note that the laws under the Registry apply only to non-Muslims who own property in the Emirate of Dubai. These individuals can also appoint a guardian, in their wills, for their minor children living in Dubai. The Registry will work with the DIFC Courts for the production of grants and court orders for the distribution of assets. As the grant is issued by the DIFC Court, it will be directly enforceable in Dubai without the need to go through the Dubai Courts.
How to Register Your Will
- Prepare a will by a qualified lawyer or qualified will writing services in Dubai. The Registry may invalidate a home-drafted will. Please note that the cost of making a will in Dubai varies depending on several factors such as the number of years of experience of the lawyer, the complexity of the testator’s assets, etc.
- Should you appoint a guardian in your will, make sure he or she has signed a correct declaration.
- Make an appointment with the Registry.
- Bring a witness and sign the will at the Registry in front of a Registry Officer.
Contact +971-44473557 or info@azhari-law.com for further assistance.