Cross-border estate planning presents unique challenges. We outline the key considerations for expatriates holding assets across multiple jurisdictions.
The UAE is home to one of the world's largest expatriate populations, and the financial complexity that comes with living and working across borders creates estate planning challenges that many residents have not fully addressed. For expatriates holding assets in multiple jurisdictions, the stakes are particularly high.
The starting point for any cross-border estate plan is an understanding of which legal system will govern the distribution of your assets. In the UAE, the default position for expatriates is that Sharia law applies to assets located in the country. However, under Federal Law No. 41 of 2022, non-Muslim expatriates can now elect to have their UAE-based assets distributed in accordance with the law of their home country, provided they register a will with the relevant authority.
The DIFC Wills Service Centre and the Abu Dhabi Judicial Department both offer will registration services for non-Muslims. A registered will provides legal certainty and significantly reduces the risk of a protracted and costly probate process. For expatriates with dependants in the UAE, this is not optional — it is essential.
Beyond the UAE, expatriates must consider how their assets in other jurisdictions will be treated. Many countries impose inheritance or estate taxes on assets held by their nationals or residents, regardless of where those individuals are currently living. The interaction between different tax regimes can create unexpected liabilities if not planned for in advance.
Pension assets deserve particular attention. The treatment of pension funds on death varies significantly between jurisdictions, and the beneficiary designations on pension accounts do not always align with the intentions expressed in a will. Reviewing and updating beneficiary designations regularly is a simple but frequently overlooked step.
For expatriates with significant assets, a trust structure can provide a jurisdiction-neutral holding vehicle that sits above the complexity of individual country rules. Assets held in trust are generally not subject to probate in any jurisdiction, which can dramatically simplify the administration of an estate.
Estate planning is not a one-time exercise. Life events — marriage, divorce, the birth of children, changes in domicile, and significant changes in asset values — all have implications for an existing plan. A review every two to three years, or following any major life event, is a reasonable minimum.