Why Is It Important for Non-Muslim Expats to Have a WILL in the UAE?

Tim Elliot: Welcome to Lawgical Lite, the quickie, bite-sized podcast from the legal firm, Yamalova & Plewka here in Dubai. I am Tim Elliot. I am here once again in the Jumeirah Lakes Towers district with Ludmila Yamalova, the Managing Partner. How good it is to see you.

Ludmila Yamalova: Indeed. Great to see you as well. Thanks for being back.

Tim Elliot: Today’s question is this:

Question from B.: Hello. This is B. I am from America. I just moved here recently with my husband from the US. We have been here for around two years. I have a couple of children. We just bought a property here recently. I have been hearing about all of these WILL options for non-Muslim expats here, but I am not really sure which WILL would be the right option for me. I am not even sure if I should have a WILL. We do have WILLS in the US, so I do not know if having WILLS here would be beneficial at all.

I have also heard that they are very expensive, so I would just like to know what my options are. Is it necessary for me to have a WILL here? What would happen if I do not have one in terms of my children, our property, and any investments that we decide to make later on?

So that is what we are going to be talking about today, Ludmila, why it is so important to have a WILL here in the UAE if you are a non-Muslim expatriate. Let us jump straight in. It is a question that is hard to ask of yourself, to sit and actually write a WILL, to think about writing a WILL, but at some stage, we all have to do it. As always, we are at the beginning. Let us start at the beginning. When do you start?

Ludmila Yamalova: Well, let us start even earlier than that. Why should a non-Muslim expat even have a WILL in the UAE, and if he or she does not have one, what are the repercussions? The short answer to that is that in the absence of a WILL, Sharia law will apply. The default law is Sharia. All those who are not Muslims, the application of Sharia law, which is based on Islam, perhaps is not the natural law that they would otherwise want to apply to the disposition of their estate.

In short, some of the more notable examples of the application of Sharia law is for example, once a person dies and if the person still has living father, then the father inherits a portion, the mother inherits a portion, and if he or she had male children then they will receive two thirds of what the female will receive, and if there are no male offspring, then the brother will inherit, and so and so forth. It is a fairly complicated structure and much depends on the family construct at that point in time. It is not even possible to predict as to what will happen when a person dies.

For someone who is coming from a non-Islamic background, the application of such law is rather foreign. Yet, so many of non-Muslim expats who do come into the UAE do not really think about what will happen in the unfortunate event of death. But it is important to understand that whatever happens, the default law in the event of death will be Sharia. Therefore, all those who perhaps want a different law to apply to their estate should definitely consider drafting a will.

Tim Elliot: Okay. That is the first thing to consider. Understand that you are subject to Islamic law, Sharia law. You have decided that you are going to register a WILL. You have decided that you are going to write the WILL. What is the step once you have written the will? Where do you register it?

Ludmila Yamalova: There are a few options but before I dive into those options, one important issue to highlight in response to the listener’s question and that is, a will that is registered outside of the UAE is much different concept of being applicable in the UAE than a WILL that is registered within the UAE. We often get a question, as the listener asked, of coming to the UAE and they presume that wills that are registered in their home countries will automatically apply to their estates here, and that is not the case.

It is not utterly impossible to enforce a foreign WILL, but in short, enforcement of a foreign will amounts to, in simple terms, enforcement of a foreign judgment. That is, first you would have to enforce the will, let us say in this case, in the U.S. and then would have to convert it ultimately into a court judgment and then bring it into the UAE and enforce it as a foreign judgment. It is a rather complicated, lengthy, and expensive process to follow.

Therefore, it is much more advisable to have a local WILL. Now, if you did want to consider doing a local WILL, which once again I highly encourage for all those non-Muslim expats living here, then there are a few options. Most importantly, the elements which are considered important to include in the WILL are those related to immovable assets or real estate property, and for example, guardianship, if you have minor children, doing a will in the UAE may be particularly important.

This is also important to highlight because for a lot of expats who have perhaps come to the UAE not so long ago, and we hear this quite often, they don’t naturally believe that drafting a WILL is in their interest because perhaps they have not yet amassed enough wealth to warrant a WILL in their own minds. They are here. They are earning. They are more or less supporting themselves with their earnings. They do not have much savings, so, therefore, they do not consider it is important to have a WILL.

That may be so, however, if they do have minor children, in the UAE it is important that at the very least you have a WILL to provide for the guardianship and custody of those children. It is not perhaps so much about the commercial parts of your wealth or the estate, but rather your children. That is really the more important element to consider, and with that in mind, this is the element that is important as well in deciding where to register a will should you decide to do so and whenever you are ready to do so.

Just to summarize, the will should include at least three components.

One is (1) all of the assets that are called movable assets and now we’re talking about money, perhaps some cars, objects, art, furniture, and other movable types of assets. Then you have (2) immovable assets, i.e., real estate property, and then you have (3) children.

Those are the three types of assets, if you want to call them that, that are important to consider including in the will and they also, depending on whether you have those types of assets, you will decide which particular place to register a WILL is most appropriate for you. There are a few options. One option and this is the one that we recommend, and that is to register a will in the centre that is called the DIFC Wills and Probate Centre.

The DIFC stands for Dubai International Financial Centre Wills Centre. This is an interesting construct that is unique to the UAE and that is because it is based on common law. While the rest of the UAE is actually a civil law jurisdiction, but the DIFC is its own independent free zone and is based on common law. Therefore, the DIFC Wills Centre is also rooted in common law and the laws that apply to the inheritance and WILLS, in particular, are those that are common law based on English law.

The option to register a WILL in this particular centre is based on specific law that was issued a few years ago that clearly allows for the centre to accept WILLS that will include immovable property, and that is real estate, and also provide for guardianship and custody issues for children. Any WILLS that are registered in the DIFC do expressly allow for the inclusion of all three types of assets: (1) Immovable, (2) movable, and (3) guardianship and custody.

That being said, the DIFC WILLS are fairly expensive. Just the DIFC costs to register a WILL are 10,000 dirhams, which is about $3,000. It is not insignificant for many. If you have parents, for example, and that is a couple, then presumably they would want to have mirror WILLS. In the case of mirror WILLS, it is almost 16,000 dirhams to register a mirror WILL. If you have a family and you want to have two people to register WILLS, it can be fairly significant. This is one of the issues that many have with the DIFC Will Centre.

Now, why the DIFC Will Centre, for now, is still a preferred choice is because it is a fairly well-tested system. We are talking in relative terms because in general registering WILLS or non-Muslim expats is a new development. Therefore, there is not much precedent yet that exists in showing exactly how these WILLS are enforced in practice, but the DIFC Will Centre is perhaps the most developed and therefore most tested, so there are a number of precedents that have clearly shown successful enforcement of these WILLS through the local systems.

That is the DIFC Will Centre. By the way, in the DIFC you can include assets from all over the U.A.E. and more so as recently, you can include your global assets.

Tim Elliot: So foreign property..etc.?

Ludmila Yamalova: Exactly. This is a fairly new development as well. Originally, when the DIFC Will Centre was formed you could only include assets that were based in Dubai. Then they expanded into RAK, the Ras Al Khaimah emirate, but as of now, it includes all of the UAE and furthermore any assets that you may want to include outside of the UAE. That is the DIFC Will Centre.

Then there is another option for Dubai residents who live here. They want to consider registering a WILL through the Dubai courts. A number of people have been doing this. In the past, there was a lot of confusion about what it meant to have a WILL registered before Dubai Courts. Many thought that if you registered before the courts, therefore, that WILL is now valid. However, that is not the case. Just having a notary of Dubai courts attest your WILL only confirms that you have now had the WILL registered. But, it does not attest to the validity of the WILL.

In most cases when the heirs or the beneficiaries would take the WILL for enforcement, the courts would be default apply Sharia law, not the law for example that would have been stated in that WILL. Therefore, because of this conflict or confusion, if you will, there was an amendment in the law in 2017 that introduced for Dubai Courts the option of specifically registering wills for non-Muslim expats.

However, that law does not provide for the express right for anyone to include guardianship or custody, for example, of the children. Nor does it mention anything about the immovable property. So, therefore, as of now, when you go to the Dubai Courts, they will tell you it is possible to include both guardianship and custody and even real estate assets, however, the law itself does not provide for that.

Therefore, there is still a big question mark about the validity or the enforceability of those wills in Dubai courts once the time comes. In other words, yes, you may have a WILL before Dubai courts that will include guardianship and custody, movable, and immovable property, but when the time comes to take it to the court for enforcement, because of the way the law is drafted, chances are that the courts would still apply Sharia as the default law.

That being said, Dubai court laws are much more affordable financially, and it is a price of about 2,000 dirhams for registering a WILL. It’s a big difference between the DIFC which is 10,000 dirhams. This is 2,000 dirhams. Obviously, from a commercial standpoint, it seems a lot more appealing for people to go to the Dubai Courts and register one before Dubai Courts than the DIFC. However, it is important to highlight the limitations of doing so before the Dubai courts because of (1) the limitations in the law and (2) also the WILLS need to be drafted in Arabic.

There is an option to equally do it or translate it into English as well, but there will always be a requirement of doing it in Arabic. If Arabic is not your native language, obviously, it is a little more complicated to do it in both languages. That is the Dubai courts. That is the second option.

The third option is in Abu Dhabi. Now, Abu Dhabi recently also issued a law that clearly allows for Abu Dhabi Courts to register wills for non-Muslim expats that specifically mention in the law and allows expats to include rights of guardianship and custody and also real estate assets. In a way, Abu Dhabi courts have mirrored perhaps or have tried to mirror the options that are available through the DIFC Will Centre. The cost is a lot more affordable. It's 950 dirhams.

Tim Elliot: Which is $250 or $300.

Ludmila Yamalova: Exactly. It is 10% of what the DIFC charges. But, this system still has not been tested. That would be the risk. Even though you can include the rights of custody and guardianship and real estate and even global assets, you will have to do this WILL in Abu Dhabi in both languages, so it has to also be in Arabic. Then the enforcement itself, it just remains to be seen how enforceable these wills are once they are taken to court, which is the necessary process here by the way.

It is not that you just have a WILL and you take that WILL to the respective authorities or entities and have them act on that. Any kind of enforcement of a WILL, be it through the DIFC, the Dubai Courts, or Abu Dhabi Courts, requires an extra step of taking that will to the courts for enforcement, so you always ultimately need a court order that will (1) confirm the will and (2) look in the way and shape official enough for other authorities, banks, for example, the land department, RTA, or whatever other authorities to act on it. Without it, the will itself will not work.

This is why the enforcement part of the will is so incredibly important. Just to sum it up, there are, in relevant terms, three options to register a WILL, and this only applies for non-Muslim expats: (1) Before the DIFC, (2) before Dubai courts, and (3) before Abu Dhabi courts. The prices are quite different. In the DIFC, it’s 10,000 dirhams per will. In Dubai courts, its 2,000 dirhams plus. In Abu Dhabi, it is about 1000 dirhams. But the limitations are quite significant.

For now, only the DIFC Will Centre has proven to be reliable in terms of including the rights of guardianship and custody and real estate assets into it for purposes of enforcement. The other two options are still in testing mode.

Tim Elliot: Okay. The overriding and important point to make is that if you have moved here from abroad and you are not Muslim, you do need to have a WILL in place. However, things change as you move through life. Depending on the WILL you have, you are going to want to add perhaps immovable assets. You buy another house. You buy some commercial office space. Whatever it is that you want to add, how easy is it to amend a WILL here in the Emirates?

Ludmila Yamalova: A great question. In the DIFC, it is quite easy. I will separate the types of amendments. There are two types or two ways in which you can update your WILL. (1) One refers more to just updating the assets that you may have, and (2) the other one is actually amending the terms of the WILL. The first one regarding updating let us say I bought another house since the time I registered the WILL. I do not need to amend my WILL. I just need to update the records that I have an additional asset. That is very easy to do. As far as the DIFC is concerned, you just send a copy of your title deed to the DIFC Will Centre and they will update the record.

Tim Elliot: And that is added to a portfolio record.

Ludmila Yamalova: Correct.

Tim Elliot: Is there a cost to that?

Ludmila Yamalova: No. There is no cost to that. If you actually want to amend the will, for example, you had another child or you have now been divorced and you want to change the WILL, that would be an amendment to the WILL. Amending the WILL cost 500 dirhams as far as the DIFC is concerned.

Now, what’s important to highlight in all three of the options for the purposes of updating your estate, is that it’s actually not necessary to notify any of the centres because in all three centres there is an option of including, and it’s in the DIFC, for example, the standard option, and the other two types of WILLS should also have this as the standard language, and that is what’s called the residuary estate. That is a catch-all clause.

Here in the WILL I’ve listed out all the specific assets that I want to be included in my estate divided up as per the details mentioned here, but I also have a clause in there that any other assets I may acquire by the time of death, for example, or any assets that might have been changed since then are also part of my estate. Therefore, it is not necessary to include that you have an additional house, for example, or an additional bank account. By this catch-all clause, all of those other assets that exist at the time of death will be included in the WILL.

The benefit in updating the WILL is leaving a clear road map for your heirs as to what you have, because let’s face it, we’re talking about expats and a lot of expats who live here, their families live outside, and so it’s difficult for them to know exactly what’s going on here. It is more about leaving a very clear checklist of all the things that you have here so it is easier for your family or beneficiaries to identify. However, really in any one of those centres, it is not necessary to do so because by default all other assets will be included unless you provided for language to the contrary.

Tim Elliot: How publicly accessible is a WILL? How can my beneficiaries or my family get a hold of a WILL should they need to?

Ludmila Yamalova: That is a great question. In none of these centres the register of those who have registered their WILLS is publicly available. These records are not publicly available. For many people, that is a good thing because they do not necessarily want their WILLS to be available to the general audience. However, for families, it is important first of all for the testator, and that is the person who is leaving the WILL, to actually give copies to all those who are involved.

For example, either who will be executors or who will be beneficiaries, it is good for them to have copies of the wills. But in the event that is not done, then it’s easy for the family to reach out, for example, to the DIFC Will Centre and in that way, if they are beneficiaries or executors as mentioned in the WILL it will be very easy for them to get a copy of that WILL.

Tim Elliot: When you create a WILL here in the UAE, are there differences between types of WILLS? For example, is there a WILL that you could just apply to the guardianship of children? Another one for properties? Or similar?

Ludmila Yamalova: It is a fairly flexible system. You can have as limited or as broad of a WILL as you want it to be. In the DIFC there is one WILL that is just limited only to guardianship, so if you want to have a more abridged or more limited WILL related only to your children, there’s an option to do so. Also, if you want to have a WILL that only addresses your real estate properties, it is possible to have just a property WILL, or if you have companies and you only want to include in that will only your companies, that is also possible.

In fact, the DIFC has provided these templates for these more limited in scope WILLS and that is if you want to only deal with disposition of your companies, then the DIFC has a template available to the public which you basically can use without having to even have a lawyer involved, and the same thing for guardianship and properties.

In other centres, again, they are fairly flexible. They leave it to you to decide as to how narrow or broad you want it to be. It is possible to just limit it to guardianship but I caution the enforceability of any WILLS that are registered before a Dubai notary or Dubai Courts that are limited to guardianship and custody because at enforcement there may be issues with regard to that because of the way the law is drafted.

Tim Elliot: So to sum up just very briefly, if you have children or you have assets of some description here in the UAE, you need a WILL.

Ludmila Yamalova: Absolutely. I highly recommend it.

Tim Elliot: That is another Lawgical Lite. A question that comes up time after time after time, just why WILLS are so, so, so important here in the UAE as a non-Muslim.

If there is a legal question that you would like answered, we would be happy to try. We would love to hear from you. You can find us online. Legal answer podcast, like this one Lawgical Lite. There is something new every week.

This article is a transcription of the Lawgical with LYLAW podcast episode published on 12 November 2019.

Written by:

Ludmila Yamalova | HPL Yamalova & Plewka DMCC