In the UAE, a hub for expatriates investing in real estate, owning property is a significant asset that often constitutes a substantial portion of an individual’s wealth. For many expats, these investments represent not only financial assets, but also potential legacies for their heirs. However, the complexities of estate planning in a foreign country, coupled with the reality that many properties might not be fully paid off at the time of the owner’s passing, underscore the importance of drafting a Property Will.
This legal document is crucial for expatriates who wish to ensure that their real estate in the UAE is distributed according to their wishes, especially given the unique legal landscape and the prevalence of ongoing liabilities such as mortgages, rental agreements, and management contracts.
A well-structured Property Will provides clarity, legal protection for your wishes, and peace of mind for both you and your heirs, by addressing not just the distribution of your properties, but also the management of any associated liabilities and maintenance responsibilities.
Below is a guide through the key questions, along with explanations and guidance tailored for property owners under UAE law for non-Muslims. This guidance is designed to ensure that your wishes are clearly defined and legally protected, providing peace of mind for you and your heirs.
- Property Details
- Question: What real estate properties do you own?
- Guidance: Listing your properties with clear details is the first step in creating a comprehensive Property Will. It’s crucial to identify what assets are involved and understand their legal and financial status. This information forms the basis of how your estate will be managed and distributed.
- Question: What real estate properties do you own?
- Distribution Plan
- Question: How do you wish to distribute your properties among your beneficiaries? Are there specific conditions attached to the inheritance of these properties?
- Guidance: Defining a distribution plan ensures your properties are allocated according to your wishes. Under UAE law, non-Muslims can distribute their assets in a manner different from the default Sharia law, making it important to specify your distribution wishes clearly. Attaching conditions to inheritance can also guide the future use or management of the property, but such conditions must comply with UAE laws to be enforceable.
- Question: How do you wish to distribute your properties among your beneficiaries? Are there specific conditions attached to the inheritance of these properties?
- Maintenance and Expenses
- Question: Are there any provisions for the maintenance and expenses of these properties until they are transferred to the beneficiaries?
- Guidance: Maintaining the value of the property until transfer is crucial. You might consider setting aside funds or specifying a source of income to cover these costs. This ensures the property remains a valuable asset for your beneficiaries, not a financial burden due to upkeep and associated taxes or fees.
- Question: Are there any provisions for the maintenance and expenses of these properties until they are transferred to the beneficiaries?
- Joint Ownership
- Question: If any property is owned jointly, what are your wishes regarding your share of the property?
- Guidance: For many expatriates, purchasing property in the UAE is a strategic investment, motivated by the potential for high rental yields and significant returns on investment. Often, these properties are bought jointly, not just as a personal asset, but primarily for their investment value. In such scenarios, joint ownership becomes a key consideration in estate planning. UAE law recognizes various forms of joint ownership, and it’s vital to specify in your will how your share of jointly owned property should be managed upon your passing. This could involve transferring your interest to the surviving owner, leaving it to other beneficiaries, or instructing the sale of the property.
- Question: If any property is owned jointly, what are your wishes regarding your share of the property?
Furthermore, it’s important to address properties that are not yet completed or are subject to ongoing payments. Many expatriates invest in off-plan properties, which carry obligations for future payments and may not be ready for immediate use or rental. Your will should clearly outline how these commitments are to be handled, ensuring that your investment’s value is preserved and that your heirs are not unduly burdened with unresolved financial obligations.
Providing clear directions for the handling of your property interests, particularly in cases of joint ownership and incomplete properties, is crucial to prevent disputes and ensure a smooth transition of assets, aligning with your investment goals and providing for your beneficiaries’ future.
