The increasing importance of wills amid economic change

Long-term residents will wish to protect and preserve their good fortune for the next generation. 

The UAE has always been an engine for change in the Middle East and the next big transformation is just around the corner.

Changes in business and residency law are planned which will have sweeping effects on the lives of non-Emirati residents. They will affect how we do business, where we live, how we invest and, ultimately, how we plan our future and those of our families.

We believe these developments will further commit foreign residents to the UAE. In turn, that means business owners and residents will seek extra security, looking for the certainty of a will to safeguard their assets for the next generation and allowing them to distribute their wealth as they think fit.

In short, we see two strong themes emerging - a likely growth in long-term commitment and a requirement for security for the wealth that people accumulate over decades.

Last month's Cabinet announcement may have come as a surprise, but for years there has been a steady building up of the governmental institutions needed to underpin the national leadership's vision of a world-class, competitive and diversified economy.

Last year, we saw the passage of Dubai Law No. 15 of 2017, designed to deliver legal clarity and significantly accelerate the process of inheritance cases. Like the legislative change for expat visas, Dubai Law No. 15 was introduced to instill confidence among investors and residents of the Emirates.

That allows us to offer non-Muslims in Dubai and Ras Al Khaimah the opportunity to protect their legacy by allocating their estate through a will, choosing their own beneficiaries, rather than through the Shariah system of distributing assets in fixed proportions to family members.

This flexible and tolerant arrangement means foreign residents can be certain that the wealth they have accumulated during their life will be passed on just as it might in their home country, part of a far-sighted government strategy designed to attract and reassure global business and global citizens.

The next step in that strategy is the federal government's review of two main policy areas - the creation of onshore companies and the issuing of long-term residency.

On company registration, it seems that some onshore companies will be eligible for 100 per cent foreign ownership, bringing them in line with freezone companies.

On residency, a new 10-year visa will be introduced for investors and medical, technical and research specialists, encouraging the brightest and best to settle here.

Similarly, students who study at UAE universities will automatically receive a five-year visa, and "exceptional" students will be granted a 10-year residency. It's likely that family members will be included in at least some of the new visa categories.

These are the most generous, business-oriented residency regulations in the region. They demonstrate a commitment by the national leadership to its population, not just Emiratis, but all those who make their lives here and contribute towards the UAE's extraordinary story of growth and progress. In return, it seems likely that the country will receive greater commitment from its new long-term residents.

If you and your family are here for that long, you are more likely to buy a home than rent. You're more likely to set up a business and invest with long-term loans and a business plan. And you will probably keep more of your savings here, reducing the massive Dh164.3 billion remitted overseas from the UAE in 2017.

So, more commitment can be expected. But, how do you pass on the benefits to future generations? As they accrue wealth, long-term residents will wish to protect and preserve their good fortune for the next generation, according to their cultural norms.

A will does just that and we expect to see further uptake of will services as the new visa and residency provisions kick in.

Rising home ownership will attract people to register a property will (which is specific to real estate assets) covering up to five real estate properties.

As internal investment increases, financial assets wills shall come into play. It protects liquid assets, up to 10 bank or brokerage accounts, including cash, shares, stocks and government securities.

Company wills cover freezone companies, allowing owners and shareholders to ensure that, in the event of an untimely death, the company can continue to prosper and the interests of family members will be secured.

Covering all assets is a full will, which can also include provisions for the guardianship of children and for spouses to "mirror" each other's wishes.

We await with great interest the details of the new legislation, probably later this year. But we are confident that as the UAE swings towards a new domestic economic model, a strong supporting structure is already in place.

The writer is director of DIFC Wills Service Centre. Views expressed are his own and do not reflect the newspaper's policy.

Editor's Note: This article was originally published in Gulf News on Tuesday June 12th, 2018 http://bit.ly/KhaleejTimesWills