In 2016, the Dubai Statistics Centre revealed that there are six cases of divorce for every one thousand couples in Dubai – a figure that is considered higher than the global divorce rate. Divorce is a consistently rising phenomenon in the country and expatriate couples are left in confusion over how to handle and manage the assets that they jointly struggled to acquire. Some cases end up with the husband and wife agreeing to mutually beneficial terms, while others lead to a disastrous and chaotic distribution of investments, usually leaving the children and other heirs at the losing end.
Expat couples should understand that there are various conditions and situations that govern the distribution of assets. With a will correctly drafted and attested by the courts, the husband and wife should not worry about how their estate or guardianship of their minor children shall be dealt with in case of divorce or death.
What happens to assets in the UAE that are under a single name?
Irrespective of nationality, gender and religion, the law of the land applies in terms of wealth distribution in the absence of a will. Whether the assets are investments, properties, bank accounts or insurance policies, Sharia will govern their distribution if couples fail to plan their estate before signing the divorce papers.
Below are a few scenarios that could help you understand how the law handles assets of expatriate couples:
* If the couple owns an asset registered under the wife’s name and the wife dies after divorce, the assets will be distributed according to the law of inheritance in the absence of a will. If there is a will, it will go to the person written in the will.
* If the couple’s investments are under the wife’s name, but acquired through the husband’s money, the wife holds the legal right to that asset. If needed, they can agree to a settlement wherein the assets are transferred to the husband prior to the divorce.
* If a couple has a will that indicates joint ownership, the will becomes null and void after divorce as per UAE law, unless proper documents are presented to the courts to prove that the assets are owned by any of them.
* If couples acquired an asset together and have an attested will, the will becomes invalid if both or one of them remarries — they must redo the will.
Sharia is generally implemented on assets and investments that are owned jointly, in the absence of a will.
What happens to the children after divorce?
In many divorce cases, children take the biggest impact of their parents’ separation. Couples should plan guardianship early on to prevent children from suffering after a divorce or death. To avoid chaos, parents should consider the following:
* If the wife remarries after divorce, any child from the second marriage will not be entitled to inherit anything from the assets acquired during the first marriage. Children from the first marriage will be solely entitled to the rights to acquire such assets.
* If parents decide to remarry after ending their first marriage, children from the first marriage will not be entitled to any inheritance rights on assets acquired from the second marriage. In such scenarios, revoke your existing power of attorney (POA) and will and replace it with a new POA and will. Moreover, the country’s law states that by default, custodianship and guardianship shall be rightfully exercised by the father if the parents are divorced, although it may differ from case to case.
What if the assets are held jointly?
There is no better way to handle assets in joint ownership than to have a settlement mutually agreed by the two parties involved. The settlement is necessary to clearly define the ownership of assets and guardianship of children. Finalise the settlement or transfer of assets before you sign the divorce agreement; do not leave anything for future settlement.
In cases of disagreement, couples should declare new terms in court and should officially present legal papers to prove their claims. It is advisable to segregate their assets that are in joint names before signing the divorce. If the couple has joint bank accounts or insurance policies, it is recommended that they approach the bank and convert them into two single bank accounts or policies.
Why is mutual agreement on settlement terms important?
Mutually beneficial terms settled accordingly and legally will provide the husband and wife a better chance to start on a clean slate. Much more, the children’s future and guardianship will be implemented to prevent further psychological and mental turmoil that could haunt them in the future.
Lawyers are available in the country to guide couples throughout the divorce process. Issues on refrainment and modification of wills can be handled properly and smoothly with the help of a legal counsel who understands your concerns and who will pursue your welfare at the end of the divorce procedure.
Estate planning is an endeavour every couple should try to achieve before ending the marriage. A settlement will allow you to ensure that your hard-earned assets will go to your children, your grandchildren and the next generations who will carry your bloodline, respect your struggles, protect your hard work and uphold your legacy.