Legal experts urging UAE expats to plan their succession

Legal experts are urging UAE residents to safeguard the interests of their families by committing to succession planning.

Let's face it, death is always sudden, said Mohammed Maria, founder of Just Wills. "It could come at any time, and in most cases, people are not prepared to handle the paperwork because there is no succession planning in place that would protect families after their death," said Maria. 

Following the tragic bus accident that killed 17 people in Dubai last month, legal experts are now urging residents to do succession planning to safeguard the interests of their family in case of sudden death.

Several families who lost their loved ones are running from pillar to post, trying to reopen locked bank accounts, trying to get succession certificates and a power of attorney while trying to overcome the crippling grief they have suffered. For example, Manisha Thakur - whose husband Vikram Thakur and cousin Roshni Moolchandani died in the crash - said she is struggling to make ends meet, given that she was financially dependent on her husband. She had to move houses because she couldn't afford to pay for their flat anymore.

A battery of lawyers had already approached her, she said, with many saying they would be charging 20 percent of the blood money.

An overwhelmed Manisha said she had been scrambling to get a lot of things done, such as losing her husband's bank account and canceling his identification cards.

Manisha is not alone in this turmoil as several families are presently suffering similar fates. A relative of victims Ummer Chonokadavath and Nabil Ummer, Fawaz Ebrahim, said his family is in a similar conundrum. "The family is in need of the blood money since they have been facing financial difficulties after Ummer's death," he said.

Though Dubai Courts sentenced the 53-year-old Omani driver to prison and ordered him to pay Dh3.4 million in compensation to the families of the victims, the ground reality is that most families don't know 'what's next'.

Following these incidents, legal experts such as Maria insist that families need to, under any circumstance, draw up a succession plan to safeguard their loved one.

What happens when you pass away without a will?

Maria said: "Irrespective of the cause of death, bank accounts of the deceased, joint or individual, will be frozen. If a will is not in place, individuals will have to battle several legal procedures to release the funds." The lawyer said banks are informed about the death through three channels - HR departments of the deceased's company, next of kin or banks are informed when the Emirates ID is surrendered.

"There is no stipulated time period either. Banks across the UAE will freeze the account within hours if they realize that the person is deceased. To release the funds, the heirs will need to present a court order," he explained. 

Also, if there is no will in place, Maria said local law will apply to the distribution of the estate, and apart from banks' life policies, gratuity benefits and workman compensation also will be blocked.

Making matters worse, "all other investments can be frozen and delayed". "It could lead to family arguments within the estate due to the uncertainty, and ex-partners may stake a claim in your estate."

Even assets in your home country will be distributed according to the local laws and children may end up receiving little or no shares.

Attestation is mandatory

Maria said: "I cannot stress more on how important the attestation of documents is. Individuals must attest their marriage certificates, children's birth certificates, academic records, and divorce certificates if any." Attestation costs anything between Dh2,000 and Dh5,000, depending on the home country.  "The court can ask for any document. If it's not attested, they don't consider the document valid," he added.

How is property divided

According to the UAE law, in the case the husband dies, his parents get 1/6^th of the property and 1/8^th goes to the wife. The balance two shares go to the son and one to the daughter. In case the wife dies, 1/6^th of the share goes to her parents and 1/4^th to the husband. The balance two shares to the son and one share to the daughter. He said: "In case you don't have a will, the court applies the law of the land."

Citing an example of a case he fought, Maria said: "There was a case where a husband committed suicide leaving no will. The matter was referred to the court. As local law is applied, parents received 75 percent of the estate and the wife received 25 percent only."

What is a power of attorney?

If a person was to become mentally incapacitated or brain-dead or in a coma, potentially bank accounts, mortgage accounts and businesses could come to a halt, especially if two signatures are required to operate the account.

By setting up a power of attorney (usually between partners), the attorney will be able to operate bank accounts, mortgage accounts, etc. The attorney cannot change the will (hopefully the will would be of being signed prior). However, the power of attorney will be a very useful document to have all your financial documents looked after by the attorney.

Step-by-step legal procedure after the sudden death

1-Registering the death case:

The death must be registered in local courts and a legal heir certificate needs to be drawn up. This mentions the names of custodians. For example, if the father has died, the legal heirs would be the wife, children, and parents.

2-Inheritance file:

"In 90 percent of the death cases, there is never a will. An inheritance certificate draws out the list of assets owned by the individual. This can be anything from FD accounts, life insurance, property, money in banks, credit shields, etc. The data can be saved in an excel spreadsheet. People can also upload the data on the Just Wills mobile application. 

The files should contain emergency contact as well.

3- Court orders:

The court sends out orders to all government departments, wherever you hold assets. For example, to the Roads and Transport Authority in the case you own a car, to the economics department, the land department, etc.