As if expat life were not fraught enough with challenges and complications, families of those who invest in properties here face further complications in the sad event that the property owner passes away intestate. Nita Maru of TWS Legal Consultants shares some legal advice regarding the above.
How different is the UAE inheritance system to that of some Western countries?
In the UAE, inheritance for Muslim nationals is guided by Sharia laws, while the law of the deceased’s home country can be applied for non-Muslim expatriates. However, there are many uncertainties regarding real estate inheritance issues. Unlike other jurisdictions, the UAE does not practice ‘right of survivorship’ (property passing on to surviving joint owner upon death of the other, as would be the case in Commonwealth jurisdictions), and the local courts will need to make the final decisions. Matters of inheritance coming before the Dubai courts are heard by one or more judges. Juries are not used. Furthermore, unlike in some Western jurisdictions, there is no system of precedent in Dubai or the UAE.
What are the most common inheritance concerns of expatriates who own property here?
The most common concerns are from expatriates that have bought property here either in their sole name or jointly with their spouse. They are confused as to which inheritance laws apply to their assets upon their demise, and usually assume that the laws of their native country automatically prevail over local Sharia laws. Inheritance laws in Dubai are not as straightforward nor the same as those back in some Western countries. If an expatriate owns property in Dubai and passes away, the laws of their home country may not apply to their assets held within the UAE, especially those that are fixed and immovable. Matters of inheritance in the UAE are governed by Federal Law No. 5 of 1985 regarding the law of Civil Transactions in the UAE (the “Civil Code”), and by Federal Law No. 28 of 2005 regarding the UAE Personal Affairs Law (the “Personal Affairs Law”). As a general rule, inheritance issues for Muslims are dealt with in accordance with Sharia, whereas for non-Muslims, the law of the deceased’s home country can apply. Succession under Sharia law principally operates by a system of forced heir ship or reserved shares. Whereas the Civil Code states, in one part, that the law of the home country applies to matters of inheritance, in another part it states, that where a will made by a non- Muslim involves the disposal of real estate in the UAE, then UAE law applies. This is consistent with the fact that in general, in the UAE, the law of the state where property is located applies to real property rights. This conflict has caused confusion amongst non-Muslims as to the inheritance of their property upon their demise. To clarify the position The Personal Status Law 2005, was passed to add clarity to the terms of the Civil Code. Legal opinion in the UAE remains divided on whether this conflict is real or not. Consequently, expats are becoming more receptive to the idea of owning unencumbered freehold property in an offshore company which is not subject to Sharia law for the distribution of assets after death, because, technically, a company cannot die, even when an individual does.