Wills for Non-Muslims
In a move to provide legal certainty to non-Muslim investors in Dubai, and in the spirit of the United Arab Emirate’s (UAE) openness to people from different cultural and religious backgrounds, the Dubai International Financial City (DIFC) launched its Wills and Probate Registry (the Registry) on 4 May 2015, further contributing to the attractiveness of Dubai’s investment climate.
This gives non-Muslims with assets in the Emirate of Dubai the right to choose the way in which these are distributed upon their decease. It provides for testamentary freedom based on common law principles and it is the first of its kind in the MENA region. It is open to non-Muslims, residents and non-residents, as long as they have assets in Dubai and are older than 21 years of age.
When a UAE resident dies, all of his assets within the UAE will be frozen. These will only be made available to heirs upon presenting a “succession certificate”. The distribution of UAE assets from an estate upon death up until now was covered by the UAE Civil Transaction Code (CTC) and the UAE Personal Status Law which state that the principles of Sharia law shall be applied in the interpretation of its provisions. However the CTC leaves ambiguity as to whether assets held in the UAE by non-Muslims, such as real estate, shares, bank accounts, are subject to Sharia law. This results in the Court of First Instance virtually always applying Sharia law, also to UAE assets held by non-Muslims. This can be contested at the Court of Appeal, but this process is costly and lengthy (from 12 months up to several years). The Court of Appeal often does reverse the ruling made at the Court of First Instance on the grounds that a non-Muslim can choose to have the succession law of the country of his domicile applied (CTC ARTICLE 17(i)). If that succession law allows for testamentary freedom, such as in the UK, then you would have it, but if not then you are bound to follow the forced heirship provisions of your country of domicile. In such cases it is important that any will is drafted and properly executed in accordance with the laws in the testator’s country of domicile. So-called “UAE wills” that are being promoted are useless. So up until now there were two options for the non-Muslim with UAE assets: to choose Sharia law to be applied or the law of his/her country of domicile. That was the situation so far. Now non-Muslims with assets in the Emirate of Dubai have a third option that is to register their will with the Registry in DIFC, providing full testamentary freedom in regard of their Dubai assets. The Wills and Probate Registry is an ancillary body of DIFC’s Dispute Resolution Authority established by Resolution No. 4 of 2014 issued by the President of DIFC. The Dispute Resolution Authority has published its rules in Order I of 2015 in Respect of the DIFC Wills and Probate Registry Rules. The rules have been largely based on the UK’s Estates Act and Probates Rules, as well as that of other common law jurisdictions such as Malaysia and Singapore.
The stated aim of the Registry is to provide a simple legal framework for the functioning of the DIFC Wills and Probate Registry and for the probate process to enable inheritance and succession issues to be resolved with a minimum of hassle and cost.
A common concern among parents residing in Dubai with minors is that guardianship issues will be resolved as per Sharia law. Non-Muslims can now address guardianship in their DIFC will provided the testator has minor children living with him in Dubai. Note that the appointment of any guardian in a DIFC will must not be contrary to public order and in accordance with the civil law e.g. a man cannot become the guardian of a minor female; unless they are blood relatives.
Non-Muslim UAE residents often perceive one of the main obstacles to holding assets in the UAE to be the application of the forced heirship provisions under Sharia law upon their decease or that of their loved ones. This has now been addressed in Dubai. The DIFC Wills and Probate Registry, as a first in the Middle East, introduces testamentary freedom and legal certainty in succession issues relating to assets located in Dubai. Combined with the advantages of a simple legal framework, the ability to hold all proceedings in English, and the efficiency of the DIFC Courts makes Dubai even more attractive for both investors and residents. This new legal framework can do nothing but enhance the success story that Dubai already is.