Expatriate Wills: Protecting your assets for your family (page 1 of 3)

As well as the registration of the death, funeral arrangements and/or repatriation of the body, there are also several financial problems.

These can be summarised as:

What happens to the surviving family's residence visas?
Is severance payable?
What happens to UAE-based bank accounts?
How are UAE-based assets distributed on death?
Are there death taxes on the inheritance?

Unfortunately, I was contacted after the each death. I say unfortunately because, in each case, there were simple steps which could have been taken to mitigate much of the pain and hardship placed on the respective families.

This month, we review the each of the five questions above and offer some simple solutions to protect your family and ensure your estate passes to those you wish it to.

Residency status

An expatriate's residency visa is cancelled upon their death. If the deceased has sponsored their family, the family's visas will also be cancelled at this time as they no longer have a sponsor. The surviving family then have 30 days in which to leave the country.

There are two potential solutions for those wishing to stay in the UAE.

A new Federal Law has been announced that will allow six month renewable residency visas to freehold property owners in the UAE. As a property does not die with its owner, the spouse's and children's residency would not be cancelled if they are attached to the property rather than the deceased's employment.

Secondly, if both spouses are employed, both should be sponsored by their respective employers (rather than one spouse being sponsored by their partner). This too would mitigate both spouses' visas being cancelled and the children could easily be switched to the surviving spouses' visa if required.

Severance payouts

In most cases, severance pay will be due to the heirs of a deceased employee. However, the employer does not have to pay this until proof of the legal status of the heirs is provided by either a valid Will, or by a court order.

The application of this rule is flexible and, in a large part, will depend on the willingness of the employer to pay the severance benefit. I would suggest that is always best to work on the worst case scenario and assume that this money will not be readily available, just in case the employer does not want to release the money as early as they could.

UAE bank account provisions

Many expatriates are still unaware that both individual and joint name banks accounts will be frozen on an expatriate's death. Consequently, a surviving spouse will not have access to money in a joint name bank account (even where they are one of the account holders), or any account which is in their spouses' name.

These accounts will remain frozen until probate is granted and all the deceased's debts in the UAE (including parking tickets and other fines) are repaid. The procedure for reactivating bank accounts is complex and it can take up to 18 months for the Courts to name the beneficiaries to whom the monies should be paid.

Obviously, this can create major problems if the majority of an expatriate's savings are in their UAE account.