In a landmark move, the Dubai International Financial Centre (‘DIFC’) has set the ball rolling for the introduction of new rules relating to succession and inheritance matters of non-Muslims owning assets in the Emirate.

On November 16th 2014, the Dubai International Financial Centre’s Dispute Resolution Authority launched a month-long consultation with the public UAE legal community on a new English language DIFC Wills and Probate Registry expected to take effect in early 2015. Once implemented, these much anticipated rules and procedures will provide certainty to non-Muslims in passing their assets in Dubai to their chosen heirs, avoiding the need for their executor and or heirs to be involved in complicated, costly and uncertain proceedings often encountered in the Dubai Courts.

Resolution Number (4) of 2014 has been signed by HH Sheikh Maktoum AlMaktoum, President of the DIFC, providing for the legal basis required for the establishment of the DIFC Wills and Probate Registry (for non-Muslims).

With its impending launch, the DIFC will become the first jurisdiction in the region where a non-Muslim individual can register a will under the internationally-recognised Common Law principles. Currently, the distribution of assets of a deceased is guided by UAE federal laws such as the Personal Status Law, Civil Transactions Code and by public order.

The Background to the Rules
Currently the dilemma of the contradictory legislation where inheritance matters are concerned coupled with the legal uncertainty of expatriate wills and the courts discretion in applying Sharia Law(when they consider it appropriate) will welcome such a move. In order to avoid lengthy and costly probate battles at the Dubai Court, the risk of estates being contested and the conflicting inheritance laws, many expatriates transfer their assets into offshore structures. Such a shift is common where property is purchased as there is no right of survivorship concept in the UAE (that is property passing onto the surviving joint owner upon the death of the other owner) and this is a serious concern for many investors.Guardianship issues for those parents that have minor children residing in Dubai isalso a common fear.The fixed distribution of assets as per UAE law and the freezing of bank accounts, for example tend to make expatriates uncomfortable in retaining funds leading to them to transferring funds offshore and out of this jurisdiction. This naturally affects the economic growth and further investment in Dubai and the surrounding Emirates.

Highlights of the DIFC Will and Probate Rules
• The DIFC Wills and Probate Registry will mark the introduction of a new set of rules relating to succession and inheritance matters for non-Muslims with assets in Dubai
• The DIFC Wills and Probate Registry will provide a mechanism for non-Muslims with assets in Dubai only to pass on their estates according to their wishes
• The rules governing the Wills and Probate Registry will complement existing UAE laws on inheritance for non-Muslims, and provide non-Muslims with the option and right to choose the way in which their estates are distributed
• The DIFC Wills and Probate Registry will be within the DIFC jurisdiction and will work with the DIFC Courtsfor 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
• The DIFC will be the first jurisdiction in the MENA region, where non-Muslims will have an option of registering a will under internationally-recognised common law principles.

The current thought is that the Registry would register the wills of non-Muslims and, upon receipt of evidence of death, issue the necessary Court orders to allow for the distribution of the deceased’s Dubai based assets (as well as Court orders relating to Guardianship) in accordance with the registered will. Also, as a “common law” jurisdiction, the use of the DIFC procedure would allow for testamentary freedom for dispositions for non-Muslim expatriates and a speedy and orderly administrative process of a deceased non-Muslim’s estate in Dubai. Once the Registry is in place, precedents would organically evolve, providing a greater degree of certainty in the handling of such inheritance cases in the future.

It is hoped that the Registry will be functional and officially open its doors by early 2015. Those that wish to prepare a DIFC will or looking to review their existing will in light of these developments, should seek the advice of a lawyer registered with the Government of Dubai Legal Affairs Department.