Understanding Dubai’s Inheritance Laws
Dubai’s inheritance laws could be quite perplexing for a vast majority of expats living in the emirate. It is, however, essential that the expats understand Dubai’s inheritance laws if they intend to buy a property in Dubai. This will save a lot of hassle to the family, in the event of an accidental death of the registered owner.
Dubai’s inheritance laws are much different from those that are practised in many western and commonwealth countries. In matters of property and other disputes, Dubai is guided by Islamic Sharia Laws. But for non-Muslim expats, the law of their native countries can be applied, although that is not the first refuge of the authorities.
The Importance of Having a Will
The importance of having a will cannot be overstated. Having a will ensures that your property will be distributed as per your wishes. It ensures that your minor children shall be left with proper guardians. However, even having a will doesn’t provide an exemption from liabilities. The personal and joint assets of the deceased are frozen until the local courts are sure that all liabilities have been taken care of and the issue of inheritance is settled.
In the absence of a will, local laws are applied. Therefore, it is essential that you have a proper will and a succession plan in place.
Laws that Govern Inheritance
Matters of inheritance in Dubai are determined by two different laws – UAE Federal Law No. 5 of 1985 or the UAE Civil Code and UAE Federal Law No. 28 of 2005 of the UAE Personal Affairs Law, generally referred to as UAE Personal Status Law.
In one part of the civil code, its is stated that matters of inheritance for a foreign national will be dealt according to the laws of his / her native country. However, if it involves disposal of immovable properties, UAE laws will take precedence.
The UAE Personal Status Law was intended to bring clarity to the Civil Code. There is a provision in this law whereby foreigners may opt out of local laws by requesting the court for the application of their home country laws while disbursing their assets. This law, however, does not explicitly amend the Civil Code’s position on immovable properties. This further complicates the matter.
Impact of Dubai’s Inheritance Laws on the Real Estate Sector and Alternative Solutions
The real estate sector have borne the brunt of the uncertainty prevailing over the inheritance laws. Owing to the uncertainties caused by the inheritance laws, many investors have often taken to buying properties through foreign companies, which are owned by them and their family members.
Recent Measures by DIFC to Address the Issue
To get around the problem posed by the inheritance laws, Dubai International Financial Centre (DIFC) has come up with a solution – The Wills and Probate Registry (The Registry).
The Registry is a first-of-a-kind service that allows non-Muslims to make and register wills under internationally recognised Common Law principles. This will enable the non-Muslims to pass on their assets as per their wishes. With the new legal solution, Dubai will reinforce its status as an investment destination.
The DIFC Wills and Probate Registry (WPR) is an administrative body and does not have judicial functions. It works with the DIFC Courts to tackle the issue of asset distribution and guardianship. But the scope of WPR is limited to Dubai. Beyond the emirate’s borders, it will have no function. Only Dubai specific properties can be referred to in the wills registered with WPR.
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Take Legal Advice
Dubai is a wonderful place with some of the most exciting investment options. But as the UAE inheritance laws differ from the laws that are being practised in other countries, it is advisable that buyers take legal help. Professional guidance will go a long way in ensuring mental peace and happiness.
If you are looking to buy property in Dubai or wish to take advantage of its bustling investment scene, contact Aurum Real Estate today. We shall guide and counsel you at each step of your purchase.