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Prior to the introduction of the freehold property law in Dubai, the issue of inheritance was a little simpler. Allowing foreign ownership of Dubai property has created something of a grey area in the event of death and the subsequent inheritance of the deceased's property.
I am often asked for my understanding of this situation, and on occasion receive requests for advice from people who want to know how best to protect their assets. I have to say I am by no means an expert in the legal field and as there is no clear law in place on this subject, I answer with caution.
As I understand it, the legal basis for the law of inheritance in the UAE is found in Sharia, the primary source of Islamic law. Without a law in place, uncertainty surrounds whether Sharia would apply to property owned by non-Muslims.
Generally speaking, regardless of the deceased's nationality or the laws regarding inheritance in their home country, when it comes to inheritance of a foreigner's Dubai property, Sharia does currently prevail.
Discretion
However, what I would also say is that because there is so much confusion and uncertainty surrounding this issue, and without a law in place, there may be cases where the court uses its discretion in deciding which law applies. Even if that doesn't mean the law of the home country is applied, it may mean that the wishes laid out in the deceased's will are considered and, in part at least, carried forward.
I also understand that a new law is currently under development that will determine inheritance for non-Muslims. The implementation of such a law would no doubt be welcomed by many expatriate residents here who may have concerns about investing in property. The law should hopefully allay fears over how assets are distributed upon death and will help owners provide for their loved ones in all eventualities.
In the meantime, there are alternative solutions for current property owners and measures that can be taken to ensure assets are distributed as intended. One of the most effective ways of achieving this is to place your assets in an offshore company. Although this may sound a little complicated, it is actually a relatively easy process.
There are many places that allow you to set up offshore companies, from the Cayman Islands to the Isle of Man, to Cyprus, and many other locations in between. Each country has its own guidelines and procedures, so where you choose can have an impact on the ease and efficiency in setting the company up, but in principle, it isn't that difficult. By doing this, you can ensure that the inheritance is governed by the law of the country in which the company is based and your assets can be automatically transferred to other owners of your company.
I think that the one thing this subject really brings home is the importance of having a will in place. The will should also determine domicile, based on factors such as where you were born, what passport you hold and where you eventually plan to settle.
Finally, I would advise anyone who is perhaps concerned about inheritance to seek legal advice. Get an expert opinion on how best to safeguard your assets.
The writer is managing director of Better Homes.
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