In its ongoing drive to establish the UAE as the destination of choice for foreign investment, tourism, and long-term residency for families and individuals, numerous legal developments have been introduced to bring personal status matters in line with international norms. The developments are aimed at expats and foreigners and serve to enhance and promote family relationships within an accessible framework.
Perhaps the most significant development to date is passing of the Federal Decree-Law on Personal Status matters for Non-Muslims (Law No. 41 of 2022) which was announced on 9th December 2022.
The new law, which is to take effect from 1st February 2023, contains similar provisions to the Abu Dhabi law issued last year (Law No. 15 of 2021) however the new law applies across the UAE. Both laws include provisions on parity between men and women in relation to various legal considerations where traditionally, equality between the genders did not apply. Matters such as the provision of testimony in Court, the distribution of a deceased's estate, the right to file a divorce, and custody over minor children are all now equally applicable, regardless of gender.
The regulation of civil marriages and the introduction of a no-fault divorce procedure are notable features of the new Law, as well as the determination of child custody and paternity. Furthermore, a subtle yet significant amendment is removal of the Hijri calendar to determine time; and replacing it with the Gregorian calendar in line with western customs.
As well as family relationships, Law No. 41 deals the determination of Inheritance for non-Muslims and removes the traditional default distribution which includes an unequal distribution between males and females limited to spouses and blood relatives. Under the reforms, in the absence of a valid Will, a surviving spouse is automatically entitled to half of the deceased's estate, with the other half passing to the surviving children in equal shares, regardless of gender. If there are no children, the parents of the deceased inherit instead. In the absence of spouse, children and parents, siblings shall inherit, again equally, with no distinction between brothers and sisters.
For those who have registered an appropriate Will, Law No. 41 provides reassurance that the terms of the Will shall be upheld in relation to all UAE-based assets. There is mention in the new law of a register of Wills which is to be introduced in accordance with the implementing regulations. The regulations are yet to be released but shall no doubt provide clarification and aid in the interpretation of new Law.In less than ten years, UAE inheritance laws and estate planning procedures have gone through a significant development cycle, from the formation in 2015 of the DIFC Wills Service Centre allowing non-Muslims to register Wills in accordance with Common law principles, to the increasing recognition and adoption of local Trusts and Foundations, and more recently, the introduction of the Abu Dhabi Civil Family Court. The eagerly awaited Federal Personal Status law is expected to further enhance these developments, particularly on the subject of local inheritance laws applicable to non-Muslims, and private clients now have an array of options available for their wealth protection needs.
At Trowers & Hamlins, we have seen a surge in enquiries from private individuals, companies and family offices based both locally and abroad, seeking clarification on the new developments and advice on how the changes can enhance and protect their wealth.
It is clear that the relaxation of personal status laws has provided reassurance and comfort to those who are already based in the UAE and offers an additional draw to those considering relocating here. The existing toolkit of foundations, trusts and local companies allows a more sophisticated estate plan to be put into place, ensuring local and international assets can be appropriately structured and preserved for future generations.