Abu Dhabi, UAEWednesday 25 November 2020

UAE inheritance law reforms will improve the financial well-being of grieving families

Under the previous law, many women experienced financial and emotional stress after their husbands died without a will in place and their assets were frozen

A number of women in the UAE have experienced financial and emotional stress after their husbands died intestate and their assets were frozen. Getty Images
A number of women in the UAE have experienced financial and emotional stress after their husbands died intestate and their assets were frozen. Getty Images

When Trina Bonetti's husband, Russell, 58, died suddenly of cardiac arrest in Abu Dhabi in December 2018, she knew his bank account would be frozen immediately under the UAE's personal status law.

The couple, who had been living in the UAE for 10 years, were in the process of making a local will when Russell, an engineering manager from the UK, passed away.

But what did come as a surprise was the fact that her husband's employer would not pay out his life insurance and final settlement without an inheritance order from the court.

With a 10-year-old son to take care of, Ms Bonetti had no family to support her in the UAE. However, the teacher, originally from New Zealand, is grateful that she had a job and was not financially dependent on her husband's income.

“With the cancellation of his Emirates ID, his car could not be re-insured and hence not driven. It sits outside my apartment 23 months later. I thought the car ownership would automatically transfer to the spouse,” she tells The National.

Mr Bonetti's telephone and internet accounts, post office box and credit cards were also frozen when his Emirates ID was cancelled, she adds.

Nearly two years after Mr Bonetti's death, the inheritance case is still pending a decision from the Abu Dhabi Judicial Department.

Ms Bonetti says the proceedings are “a complicated process”, however, she had lawyers to guide her through the Sharia law process.

“I try to live with optimism and positivity for my young son," she says. "Now, I am the biggest advocate for a UAE will. All my friends have a will now.”

Ms Bonetti's experience is a familiar tale in the UAE, with many women experiencing financial and emotional stress after their husbands died intestate, or without a will in place, to determine the distribution of their local assets.

“Under Sharia law, a surviving spouse does not gain access to the deceased spouse’s local bank accounts or joint bank accounts as majority of the deceased’s assets would pass to certain family members and a relatively smaller portion would pass to the wife as compared to other jurisdictions,” Michael Kortbawi, a partner at law firm BSA Ahmad Bin Hezeem & Associates, says.

“Without a will, the deceased’s bank accounts would be frozen until a court could ascertain the share of the heirs as per Sharia and all the deceased’s debts in the UAE are settled.”

Devanand Mahadeva, director and head of inheritance and personal law practice at Goodwins Solicitors & Legal Consultants, says the probate process to divide assets under Sharia law can take from a few months to several years depending on the assets and the potential for family disputes.

The deceased’s bank accounts are released when the surviving spouse can produce an inheritance certificate and settle debts after the court determines each heir’s shares, Mr Kortbawi adds.

However, this is set to change after the government announced sweeping changes to the country's personal status laws on November 7. As part of the changes, Sharia law will no longer be applied to the division of expatriate assets if they die intestate.

Legal experts have welcomed the changes to the UAE inheritance law, which is effective immediately, saying it will make a big difference to the financial well-being of women and their children if they lose their partner without having a will in place.

Without a will, the deceased’s bank accounts would be frozen until a court could ascertain the share of the heirs as per Sharia and all the deceased’s debts in the UAE are settled

Michael Kortbawi, BSA Ahmad Bin Hezeem & Associates

The biggest "game-changer" to the law stipulates that in the absence of a locally registered will in the UAE, a deceased's estate will be divided under the applicable law of their citizenship regardless of their religion. But with 200 nationalities living in the UAE, legal experts recommend that expats also have a local will because succession laws in their home countries could be as equally complicated as Sharia law.

The one exception to the updated law relates to property bought in the UAE, which will continue to come under Sharia law if there is no will in place.

Although there are a number of pending inheritance cases in the UAE’s Family Court, legal experts believe the changes to the law are more likely to apply to upcoming cases rather than ones already proceeding under Sharia law.

“For the sake of judicial efficiency, we expect that these changes will be applied moving forward rather than to [those] already proceeding under Sharia law at the time of the announcement. Therefore, we do not think there will be immediate access to bank accounts or other assets in cases that have already commenced,” Mr Kortbawi says.

“However, the law might provide for retrospective application and apply to ongoing cases, which we can only know once the actual text is available.”

Margaret O, a Nigerian expat who requested her surname not be published because her inheritance case is still before the courts, lost her husband Nyem, 62, when he died of a sudden heart attack at work on December 5, 2019. His inheritance case has been ongoing in the courts for almost a year after being severely delayed by the Covid-19 pandemic. She says they are uncertain about how long it will take to finalise the case.

The couple had been living in the UAE since 2002 and have three daughters. She says she was aware that her husband's assets would be frozen upon his death and they had often discussed writing a local will. However, tragedy struck before they could begin the process.

“My husband was a ministry employee, so it impacted me significantly due to accommodation and finances largely coming from his job. I was employed part-time, but had to leave to focus on the succession case,” she adds.

Her husband's bank accounts were frozen on the same day of his death, while his car registration and car insurance could not be transferred without first obtaining an inheritance order from court. “We first need to pay off the insurance lapse fines as well as vehicle registration fines accrued. Then we can get a court order,” Margaret says.

The family has legal representation to help them with the succession case, but the division of assets “is not straightforward since there is no will”, she adds. Margaret says she is coping financially with help from family and close friends.

With a local will registered, a typical probate case in the UAE courts can take anywhere between one to three months to execute

Devanand Mahadeva, Goodwins Solicitors & Legal Consultants

Margaret says the amendments to the inheritance law will allow bereaved families to have more financial provisions, which will help to mitigate the costs of legal counsel and charges incurred to repatriate the deceased home.

“Personally, I hope unlocking his funds in the bank will act as a retirement fund and also allow me to make some additional investments,” she says.

If expats have a local will registered, a typical probate case in the UAE courts can take anywhere from one to three months to execute, says Mr Mahadeva.

“Families of the deceased would still need to submit documents to the local courts to obtain an inheritance certificate as per the deceased person’s last will and testament for execution and transfer of assets, businesses, bank accounts, motor vehicles and claim end-of-service benefits as per the deceased’s will,” says Mr Mahadeva.

Expatriates’ assets in the UAE typically include business, real estate, funds in the bank account, jewellery, investment portfolio, insurance, car, end-of-service dues, etc. istockphoto.com
Expatriates’ assets in the UAE typically include business, real estate, funds in the bank account, jewellery, investment portfolio, insurance, car, end-of-service dues, etc. istockphoto.com

Caryn P, a South African expat in Dubai who also who requested her surname not be published because her inheritance case is still before the courts, is struggling financially after her husband Gerhard, a 53-year-old marine biologist, died of a heart attack at the end of September.

The couple, who moved to the UAE in February 2018, have three children, two of whom live in Dubai and the other in South Africa. Although Caryn and Gerhard were contemplating taking out a UAE will in February, Covid-19 struck and her husband’s salary was slashed by 50 per cent and they put off taking out a will because of the expense.

Her husband's employer paid his salary and end-of-service dues and the company is also sponsoring the family’s housing for three months. However, she is currently unemployed and also has no family support in the UAE. She is hesitant to return to South Africa because of a lack of job opportunities. Her 23-year-old son in Dubai is also currently unemployed.

“My biggest concern was that my husband did not have a UAE will. But with the new amendments, I am relieved that my late husband’s South African will is to be upheld in the UAE,” she adds.

However, Caryn has no money to seek legal advice and needs to use the funds she has left to sustain the family until Gerhard’s life insurance payout is released in six months' time. He also has some funds parked in a pension fund with his company, but this has been frozen.

Although Gerhard’s bank account has been frozen, Caryn says he has more debt in it than credit and she is worried she may be held accountable for his liabilities. She has written to the bank seeking clarification on this.

“I am trying to save every penny possible now or I will not be able to continue my 13-year-old daughter’s schooling. My husband's company has been very helpful and doing their best to make this as easy as possible for me,” she adds.

Updated: November 17, 2020 01:59 PM

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