Succession planning and safeguarding your assets – part 1

The UAE law of inheritance is based on the principles of Sharia Law, which differs greatly to the laws that many of us expatriates are used to and to the way in which our total assets are normally distributed upon death away from the UAE. 


In a Muslim country like the UAE, all courts adhere to Sharia - the primary source of Islamic law. Legal systems in the Gulf are usually quite complicated and those unfamiliar with their workings can find this difficult to understand & accept.

So what happens when a non-Muslim expatriate dies out here in the UAE?

According to the UAE Civil Code, Federal Law No.2 of 1987 (Article 17/1) stipulates that inheritance shall be subject to the law of the deceased at the time of death. This law was promulgated to stem confusion surrounding inheritance issues for expatriates. Therefore the law of the domicile country of the deceased would apply.

Your “Last Will & Testament” is a document that details exactly what you would like to happen to your estate in the event of your death. The professionally drafted document can cover all aspects of your life, from physical assets such as property, investments or cash, to who you would like to look after your children until they are of an age that they can look after themselves. It is worth noting that if you marry, you will have to start again, as marriage automatically revokes a will; however, possibly just as important, a divorce does not.

Your Dubai freehold property is still governed by the inheritance laws of sharia and would not be distributed as per your wishes or your Will. The UAE treats movable assets (such as cash, investments, cars, etc) differently to immovable assets (property) for inheritance purposes. Only moveable assets as safeguarded when making a Will. 

The laws relating to foreign owners of property in the UAE and inheritance still need to be examined closely and the process is ongoing. But as the situation stands, UAE law (sharia) shall apply to immoveable property (real estate) in the UAE held by foreigners.

When purchasing real estate in the UAE, it is always advisable to try to do so through a foreign company that may be jointly owned by you, your spouse and/or your children.

When an expatriate dies in the UAE, their visas are cancelled and banks are instructed by the courts to freeze all transactions on the accounts of the deceased, including joint accounts. The bank is obliged to freeze the account from such notification until the successors of the deceased are nominated as per Article 379 (4) of the Commercial Transactions Law, UAE Federal Law No. 18 of 1993. Unfreezing of the account can only be carried out by order of the Sharia Courts. This process aims to safeguard any payments that need to be made after an expatriate has died, such as outstanding loans and any debt payments and can take as much as 6-9 months to clear up.

With Visas cancelled (and 30 days grace to make visa re-arrangements), and bank accounts frozen, does one even have time to grieve over the loss of their loved one? Many of us do not understand the possible implications of death in the UAE and the financial implications that entail.

Simple financial planning can help overcome such obstacles and help create a safety net. It’s not just about safeguarding your assets by making a Will but also the welfare of your family & young children who are dependent on you even when you are not around.

Ravi Shah
Head - Life and Pensions
Earnest Insurance Brokers