Most expatriates I meet have not got a Will. Will writing is often associated with the sick or old. So it is not surprising very few expatriates have a Will. Wills in Dubai are rare.
Those that do have one usually have not looked at it since it was written. Many are out of date, don’t take account of current legislation or fail to reflect their current wishes and circumstances.
The majority of the people I speak to are women concerned about their treatment in the event of their husband’s death. This is because they are aware that their status is different in Dubai than back home. They are also the ones with the most to potentially lose should the worst happen. Under local law, a wife may inherit only a small fraction of her late husband’s estate.
A valid Will is essential for non-Muslim expatriates resident in Dubai. It provides protection for your family and control over your assets. It is also an important estate planning and tax reduction document.
British expats do not pay income or capital gains tax when they are resident in UAE. However, when they die their worldwide assets will be assessed for UK Inheritance Tax. This is the fastest-growing tax in the UK. It is charged at a rate of 40% after allowances and exemptions.
Inheritance Tax is not just for the super-rich (who can largely avoid it) but one that has the greatest effect on those who earned their money. For example, a single man with an estate of £1 million may pay around £200,000 of this to the UK government on death. I am sure most of us could think of more worthwhile beneficiaries than that.
Non-Muslim expats have a number of options available. There is a suite of Wills available via Dubai International Financial Centre (DIFC) or a Will written under the law of your home country.
Each option has advantages and disadvantages. For example, the most widely known aspect of the DIFC option is the registration cost. However, this remains the most legally robust way to pass on real estate owned in Dubai and Ras Al Khaimah. Most expatriates have assets in their home country which would probably not be covered under a DIFC Will and so a further solution would be required.
In many ways, DIFC Wills are a form of insurance. They provide peace of mind whilst expats live in Dubai or own Dubai based assets. Once the assets have been sold or the children left home the DIFC Will has served its purpose.
Wills written under the law of your home country are often used for moveable assets such as bank accounts and other financial assets. But legal processes will need to be observed wherever the assets are held.
With over 200 jurisdictions around the world, legislation is constantly changing. As expats, we often hold assets in multiple jurisdictions. It is important to make sure your Will remains up to date with these changes to avoid the Will being invalid or failing to deliver the desired results. Regular reviews are essential.
On 30th June 2019 DIFC Wills Service announced they would accept Wills for assets outside of Dubai and Ras Al Khaimah. However, they would not say whether their Wills would be effective in other jurisdictions. Therefore most will writers I have spoken to will continue to offer a multiple Will solution where appropriate.
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