What will you leave for your greeving family
Under Sharia, a wife will get one-eighth of the husband's estate if the latter dies without leaving a conventional will.
Many expatriates have deepened their roots in the UAE with the introduction of freehold properties. But what happens when one passes away without leaving a will as to who will inherit the property or how it should be divided? While Sharia provides the answers, legal experts say it's most wise to make a will.
British expat John Stuart, 44, owned and ran his own company in Dubai. He had a very good salary, his own villa, stocks, life insurance and a retirement plan.
But when he died of a heart attack, his assets were frozen because he had left no will. His wife and children were virtually penniless while the authorities decided how his assets should be split under Sharia.
But even if you don't own a property, you have perhaps more disposable income here than back in your home countries. If you sum that up, go around your house, you look at your car, jewellery, and such like, it really comes to fairly significant figures. Carol ALderson, Lawyer, Al Midfa & Associates.
In the end, rather than inheriting his entire estate as would happen under the law of his native land, his wife got just one eighth of his estate.
The European couple may be fictional, but their circumstances reflect the necessity for executing wills among the growing number of expatriates planting their roots in Dubai, an estate manager said.
A death can cause other complications, too.
When an Emirati man with personal assets worth Dh18 million died in August 2007, it took three months and several meetings among the 21 beneficiaries before a court settled the inheritance case.
"The majority of my clients own property in Dubai. Most are Europeans, some are Indians and Americans," said Mohammad Marria, estate manager of Just Wills.
Since the UAE introduced freehold property ownership, more people are preparing wills to avoid the complications involved in dividing estates among relatives in case of death.
"Ordinarily, the most significant asset you can own is a property," said Carol Alderson of law firm Al Midfa & Associates during a radio talk show on Tuesday.
"But even if you don't own a property, you have perhaps more disposable income here than back in your home countries. If you sum that up, go around your house, you look at your car, jewellery, and such like, it really comes to fairly significant figures."
"If you're working for somebody, you may have an end-of-service gratuity which becomes part of your estate. There might be a holiday entitlement you haven't taken during the course of that year. Under the labour regulations, you are entitled to a ticket home. If you wanted to be buried in your home country, it helps."
Will attestation
Several law firms like Al Midfa and Just Wills help residents prepare wills for a fee - ranging from Dh900 to Dh2, 000.
Dubai Courts accept wills provided they are attested by the diplomatic mission of the deceased.
In the absence of a will, Sharia automatically apply to both Muslim and non-Muslim estate holders when they pass away.
An intestate - someone who dies without a will - resident is covered by the UAE Private Matters Law, based on Sharia, which governs the division of a person's estate following his death.
"Under Sharia, the wife of the deceased receives one-eighth of the total sum. The parents receive one-sixth. For every share received by the daughters, the sons receive twice as much," said Judge Ali Al Dhabahi, Sharia Court Judge and Head of the Legacy Advancement Committee at Dubai Courts.
The process of dividing assets takes two to eight weeks. The division is based on certain pre-defined principles, explained Ali Al Dhabahi.
However, the beneficiaries can opt to use the inheritance laws of their home country. To apply foreign laws, individuals have to provide an attested detailed copy of the law certified by the local consulate or embassy. All of which is a very lengthy process and the best way out is to make a will, says Alderson.
Minors' share
The UAE legal system recognises individuals over the age of 21 years as adults. Otherwise, the court appoints guardians to their share of the estate.
This appointment of a guardian comes after consultation between the judge and the beneficiary. The inheritance received by the minors is kept at the court's treasury until they reach the legal age.
The guardian still does not have access to the inheritance directly and any withdrawal of money or disbursement of assets is supervised by the courts.
In case an expatriate beneficiary is a minor, the courts provide controlled options for the families which decide to return to their home countries.
Ali Al Dhabahi explained a trust fund must be set up in the home country for the minor beneficiary before the courts allow funds to be transferred. The home country's laws then are applied to manage the trust.
People with assets in other emirates or other countries can apply for inheritance division to be done either in Dubai or where the assets are located.
Al Dhabahi said if a person is a resident in the emirate, working here or owns a property here, he may apply for the procedures to be done in Dubai.
In the case of overseas assets, the UAE courts would have jurisdiction over the distribution of these assets through coordination with the legal authorities of the other country via the Ministry of Foreign Affairs.
Sharia and Conventional Wills
Residents can register Sharia or conventional wills in Dubai. Marria of Just Wills, an Awqaf-certified wills executor in Dubai, said Sharia wills oblige every Muslim to have one as dictated by the Prophet Mohammad's (PBUH) Hadith.
Marria said Sharia wills follow predefined dispositions of the estate. Sharia also allows up to one-third of the total estate to be given as a gift to a charity. A Sharia will also clearly states the executor of the will and guardian of minors or dependents.
But despite the clarity of Sharia wills, Marria said a majority in Dubai favour conventional wills.
"In the past nine months, I have produced six Sharia wills, against seven to eight conventional wills per week," said Marria.
"People opt for the conventional wills due to their lack of knowledge about the Sharia," he added.
Cost
The cost of preparing a will in Dubai can vary between Dh2,000 and Dh3,000. The costs of the transactions at the Dubai Courts add up to Dh220 for the estate division - this includes conflict resolution by court-appointed mediators, experts and judges.
Where there is no will
Here are steps in dividing an estate under Sharia, according to Judge Ali Al Dhabahi, Sharia Court Judge and Head of the Legacy Advancement Committee at Dubai Courts.
1. Registration of inheritance notice. The notice includes the assets of the deceased, and names of the beneficiaries.
2. To register the notice, documents needed include the death certificate, passport copies of the next-of-kin and beneficiaries, a notarised document stating the parents' names and identifications and the presence of two witnesses. The court accepts inheritance notice only from the next-of-kin or whoever holds a power of attorney. Power of attorney notices provided by the deceased prior to his demise become invalid upon death.
3. The only acceptable power of attorney notice would be the one from the legally appointed heirs.
4. The inheritance notice is needed to open a legacy file, where the courts address all the related institutions like the banks and property departments, and transfers all movable assets to the courts' treasury before the execution of the division.
5. The court clears debts accumulated by the deceased before dividing the estate.
Unfreezing accounts
Jasem Al Sharouqi, personal banking officer at Abu Dhabi Islamic Bank, said a deceased client's accounts are kept active until a notice is received from the Ministry of Health (in the case of natural death), or the Ministry of Interior (in the case of death under suspicious circumstances) and the courts' in addition to a death certificate.
Then the deceased's accounts are frozen until further notice is received from the courts. The accounts can only be opened by a court order allowing the heirs to withdraw money or a representative with a power of attorney from the heirs after the deceased person's debts are paid.
In the case of joint accounts, the court contacts the involved parties and reviews the percentage of shares of the deceased before unfreezing the account.
If the person has a partnership in a company the account remains closed and inaccessible by any partner until the deceased is severed from the trade licence and any partnership contract.
Online resources
Al Dhabahi said plans are afoot to roll out an online registration system to create more efficient transactions at the courts with regards to inheritance and estate disbursements.
Publish date: 03/05/08 15:41
Source: www.xpress4me.com