Proper estate planning and drafting of a will are essential to protect your assets and ensure their distribution according to your wishes after death.
If you are a foreigner living in the UAE, or are a non-UAE resident owning assets such as real estate and stocks in the UAE, estate planning can get complicated.
The UAE's inheritance laws are governed by Islamic Shariah law. This means that unless you set up a proper estate plan, your assets will be distributed according to Shariah law. Shariah law distributes assets to parents, children, and siblings according to complex rules and shares, with male children being granted more than other relatives.
The good news is that the UAE, as one of the world's most international countries, has multiple will systems in place that allow foreigners to avoid Shariah law altogether.
Before rushing into will drafting and notarization, it is important to fully understand all available will options.
The options vary greatly in both pricing and enforceability. What is best for you depends on your home country, the assets you own, your language background, your possession of assets in other third party countries, and your budget.
Let's cover all options in detail.
The UAE currently has three main will systems in place. These are the DIFC will, the ADJD Will, and the Dubai Courts Will.
DIFC Will
The DIFC Will is named after the Dubai International Financial Center (DIFC). DIFC is a free zone in Dubai and the main financial center of the emirate and the UAE as a whole.
The DIFC free zone established an international court, called DIFC Courts, which began operations in 2006. The DIFC Courts operate according to English language common law, making it unique in the UAE and legally separate from the rest of the country's court system, which operates according to Islamic Shariah law and is based on the Arabic language.
Starting in 2015, DIFC Courts set up the DIFC Wills and Probate Registry (WPR), allowing non-muslim foreigners to draft and register English language wills in Dubai according to English common law.
DIFC wills may include UAE and international assets. Despite this, foreign countries and courts may not respect a DIFC will. Only UAE-based assets and specifically those based in Dubai are 100% protected by a local DIFC will.
Multiple DIFC wills are available, including a full will, a mirror will (essentially 2 full wills for spouses), property wills, financial wills, company wills, and guardianship wills. DIFC wills are rather costly and involve a drafting fee plus a registration fee.
Professional will drafting costs around AED3000+ and can get more expensive if a large number and variety of assets are involved. You may also draft your own will, however, this is not recommended.
Registration costs vary by will type, and are as follows as of March 2023:
Full (single) will: AED 10,000
Full will (mirror will for 2 individuals): AED 15,000 (50% discount compared to 2 single wills)
Property will: AED 7,500
Property will (mirror will for 2 individuals): AED 10,000
Financial will: AED 5,000
Financial will (mirror will for 2 individuals): AED 7,500
Business owner's will: AED 5,000
Business owner's will (mirror will for 2 individuals) AED 7,500
Guardianship will: AED 5,000
Guardianship will (mirror will for 2 individuals): AED 7,500
As the name suggests, full will cover all assets and may also include guardianship provisions for dependents, specifically children under the age of 21.
Property wills cover up to 5 unique properties located anywhere in the UAE. This is a change from an older restriction that limited coverage of properties to Dubai and Ras Al Khaimah until 2019. Property wills are popular with non-UAE residents owning real estate here, but nothing else.
Financial wills only cover bank accounts and (stock) brokerage accounts domiciled anywhere in the UAE.
Business wills only cover ownership shares in UAE-registered companies. Up to 5 unique companies may be involved in a single will. All UAE-based companies, from all emirates, including mainland companies and free zone companies are covered. IBC companies incorporated through Ras al Khaimah's RAKICC are also covered.
Guardianship wills allow you to ensure who cares for dependent children under the age of 21, as long as these reside in the UAE.
Compared to the other two will options discussed below, DIFC wills are by far the most expensive, both when it comes to drafting fees, and especially regarding registration fees.
Why are DIFC wills so costly?
DIFC wills largely depend on foreign executioners, lawyers, and judges living and operating out of the UAE, as DIFC Courts are based on English language common law. The DIFC court system, while established under a degree of Dubai's government, largely operates independently from standard UAE government courts. DIFC courts are as close to a private court system as it gets, and while this means better services and standards for customers, it also means higher costs.
Are DIFC wills worth the extra cost?
DIFC wills are written in English language, and executed by the only English-speaking court in the UAE.
Unless you speak Arabic, this is a significant advantage. Wills do not have to be translated into Arabic, and court proceedings are easily understood by non-Arab foreigners.
As the DIFC will is registered and executed through the same DIFC Court, its exact execution is nearly guaranteedno. There is no leeway for different interpretations, and minimal risk of successful opposition to the will's execution by third parties
It is important to keep in mind that DIFC wills are exclusively available to non-muslims. You must not be a Muslim and never have been a Muslim.
If you are Muslim, you may only choose between the other two will options below
Dubai Courts Will
Unlike the DIFC Will, both the Dubai Courts will and the ADJD will are essentially notarization services for your will.
The Dubai Courts Will is a simple will that you may draft yourself or have written up by a draftsman. The document then needs to be translated to Arabic.
Professional will drafting for a standard will to be notarized by Dubai courts usually costs in the range of AED 2,000 to AED 4,000. The more assets and asset types are covered, the more expensive the drafting fees.
Notarization with Dubai Courts costs around AED2,200 for a single will, or double the amount (no discount) for a mirror will (for two individuals), or AED4,400.
Dubai courts are the local Arabic courts in the emirate of Dubai. A Dubai court will need to be notarized and executed through a local Dubai court.
While cheaper than a DIFC will, the Dubai Courts will is relatively unpopular with foreigners. That's because of two reasons
A Dubai Courts will has to be written in the Arabic language, and its enforceability is less certain. There are many local courts in the emirate of Dubai, and the execution of the will depends on the respective court and judge in control at the time after death. Third parties have greater chances at challenging a Dubai Courts will. Challenges, even if brought forward by non-UAE residents, may significantly slow down the will execution process and even result in the partial overturning of the will.
While cheaper than a DIFC Will, a Dubai Courts will is still more expensive than its cousin the ADJD Will. As a result, people with less complicated wills looking to save money rarely choose the Dubai Courts will, and instead go for the ADJD will.
The ADJD Will
The ADJD will derives its name from the Abu Dhabi Judicial Department (ADJD).
In essence, it functions just like a Dubai Courts Will. It has to be written up in Arabic language and notarized by the Abu Dhabi Judicial Department (i.e., a local court in Abu Dhabi). The difference here is that you are using the Abu Dhabi court system instead of the Dubai court system.
As mentioned before, an ADJD Will costs less than both the DIFC will and Dubai Courts will.
The will drafting and Arabic translation fees are on par with those of the Dubai Courts will at AED2,000 to AED4,000+
The notarization of the will costs AED 950 for a full (single) will, and AED 1,900 for a mirror will for two individuals.
Aside from the lower cost and and the location of the court, there are no major differences between the ADJD and the Dubai Courts Will.
Both wills apply to all types of assets, from real estate to bank accounts and company shares. Assets in all 7 emirates are similarly covered by both wills.
Just like the DIFC will, you may include assets based in other countries in your Dubai or Abu Dhabi wills, however, it is unlikely the wills will be recognized in other countries.
Summary
Comparing the more expensive DIFC will and the local Dubai and Abu Dhabi wills is just the start of a successful estate plan strategy.
If you own international assets outside the UAE, or have relatives who may want to challenge a will, a simple UAE will may not cut it.
The more expensive DIFC will ensures that UAE-based assets are safe from legal challenges, but it still does not protect international assets, as foreign countries may not respect your UAE will. That's especially the case when local laws require mandatory inheritance shares or if relatives try to challenge your estate.
In those cases, you will need additional local wills. If you invest in US or UK stocks, for example, you should set up additional local wills in those jurisdictions. However, a new risk here is that wills in different countries may partially contradict each other, leaving leeway for years of litigation.
We are experts at navigating global inheritance laws and have the necessary expertise to protect assets worldwide.
Another aspect to consider is estate taxes or inheritance taxes. Despite the UAE not having any inheritance taxes, if you are a UAE resident, estate taxes may apply when you invest abroad.
We have developed advanced estate plan strategies that allow you to legally bring estate taxes down to zero, no matter where you invest. Check out our estate plan strategy services here, or contact us!