The UAE introduced a major change in its Civil Transactions Law that affects what happens to the assets of expatriates who die in the country without a will or legal heirs.
This reform is designed to remove long-standing legal uncertainty and make estate planning clearer for banks and families by ensuring all assets are handled responsibly and transparently.
Under the new law, if a foreign resident dies in the UAE with no valid will and no identifiable heirs, their financial assets will be placed into a supervised charitable endowment.
Why Reform is Needed
Before this reform, there was no clearly defined and consistent process for handling the estates of expats who died without a will and without legal heirs. In many cases, this led to assets being frozen for years, banks and authorities unsure how to proceed, and family members abroad being unable to access funds or property.
In many cases, this resulted in assets being frozen for extended periods, with banks and authorities unsure how to proceed. The new Civil Transactions Law aims to bring reform by establishing a definitive process.
What is the New Law?
If a foreign resident dies in the UAE and
1. Has no valid will; and
2. Has no legal heirs who may come forward to claim their estate
Their financial assets located in the UAE will be designated as a charitable endowment.
These assets will be overseen by an official authority to ensure they are managed properly and used in the public interest.
This does not affect situations where a valid will exists, or heirs come forward to claim the estate.
What Counts as ‘Assets’?
TThe official announcement focuses on financial assets. This generally includes:
- Bank accounts and savings
- Investment accounts
- Cash holdings
- Other financial instruments
For physical assets such as real estate, the legal process may still involve additional procedures. However, the new law is a step forward for financial assets previously suffering from legal uncertainty.
What is a Charitable Endowment?
A charitable endowment (Arabic: waqf) is essentially a legal trust for charity or community benefit.
Under the new law, if a foreign individual dies and has no valid will or legal heirs, their financial assets will be converted into a charitable endowment. This means that, instead of the assets sitting untouched or being distributed unpredictably, they will be used for approved charitable purposes under supervision.
What is a ‘Competent Authority’?
The law assigns responsibility for managing these charitable endowments to a competent authority. This is typically a government body or regulator empowered to collect the financial assets, oversee their management, ensure proper reporting and governance, and distribute the resources according to approved charitable goals. Instead of leaving it to courts or unclear procedures, the law empowers an official entity to take responsibility.
Does this New Rule Apply to UAE Nationals?
Based on the wording of the announcement, this new rule does not apply to UAE nationals.
The provision introduced under the updated Civil Transactions Law is expressly framed around ‘foreigners’ (expats) who die in the UAE without a will and without legal heirs. Official statements and media coverage consistently describe the reform as addressing the issue affecting foreigners, not Emirati nationals.
This distinction is important as inheritance for UAE (Muslim) citizens is already governed by Shariah principles. Under this law, there are established rules for distributing an estate, even if someone dies without a will or a legal heir. Typically, assets pass to recognised family members according to prescribed inheritance shares. As a result, the legal uncertainty that previously affected expats with no heirs does not arise in the same way for UAE (Muslim) nationals.
Why Writing a Will is Still Crucial
Even with this reform, it is strongly recommended that expats write and register a will in the UAE for the following reasons:
1. Control over your legacy: a will lets you decide who gets your assets, rather than a default charitable endowment.
2. Avoid lengthy processes: without a will, the family may face delayed probate processes, leaving assets locked.
3. Protects families: a will can include guardianship clauses for minor children.
Estate planning remains important, even with this reform, especially for expats with complex holdings or family situations.
Key Takeaways
The UAE’s new rule is a significant reform removing years of legal uncertainty. The financial assets of expats with no will or legal heirs will be put to public benefit through a charitable endowment.
However, this reform is not a substitute for personal estate planning. Writing and registering a valid will remain the best way to protect your family and ensure your assets are distributed according to your wishes.
