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Property and Assets Division after Divorce in UAE

Divorce in UAE and Division of Property and Assets

Dubai Statistics Center has revealed that there’s a lot of cases of divorce in the emirate. In 2016 alone, there are six divorce cases for a thousand couples, which is a figure that’s considered higher in comparison to the global rate for divorce. 

Divorce in UAE is consistently rising and this phenomenon doesn’t just happen with locals but also expatriates alike. Couples are left wondering how to handle their assets and manage to split those that were jointly acquired. Most cases end up with husbands and wives agreeing mutually to beneficial terms. However, there are those that opt for the chaotic and disastrous distribution of assets and investments, leaving heirs and children at a losing end. 

Also Read: Divorce procedures in UAE

Local and expatriate couples in the UAE should understand the fact that there’s a variety of situations and conditions that govern asset distribution following divorce. With a will drafting or agreement that’s been drafted correctly and attested by local courts, a wife and a husband shouldn’t worry as to how guardianship and estate should be dealt with should death or divorce comes up.

What Happens to Property and Assets Which are Under One Name?

Irrespective of religion, gender, and/or nationality, local legislation applies with wealth distribution, most especially if there is no will or agreement to follow. Whether the property and assets are bank accounts, investments, or insurance policies, the Sharia law governs their distribution when a couple considering divorce fails in planning their estate prior to signing divorce papers. 

Below are a couple of scenarios, which can help you in understanding the law which should be followed in the handling of assets of divorcing expatriate couples:

  • If a couple has an asset that is registered under the name of the wife and the wife passed away following the divorce, the asset is to be distributed as per the UAE law of inheritance (if there is no will to follow). In the event that a will has been drafted, whatever is written in the will shall be recognized by the law. 
  • With investments of a couple that are under the name of the wife but acquired using the money of the husband, the file will hold the legal right with the assets. The couple, if needed, can agree to settlements wherein assets are transferred onto the name of the husband before the divorce is finalized. 
  • If a couple drafted a will and legalized it and it indicates joint ownership to property, the will will become null and void following the divorce. This is unless proper documents can be furnished to courts to prove asset ownership.
  • If a couple has acquired assets together with a will that has been attested, the will will become invalid when the parties or any of the parties remarry. The will has to be redone in such case. 

The Sharia law is implemented on the division of investments and assets which are owned jointly, if there is no will that can be presented onto the courts. 

What Happens to Children Following Divorce in UAE ?

In most divorce cases, the children will take the biggest hit with the separation of the parents. Couples are to plan the guardianship of the children early on in order to prevent the kids from suffering during and after the divorce proceedings. In order for couples to avoid chaos, they are to consider the following:

  • If the wife will remarry after the divorce, the child from the 2nd marriage won’t be entitled in inheriting anything from assets that were acquired from the first marriage. All children from the 1st marriage are to be entitled to rights in acquiring such assets. 
  • When the parents decide in remarrying following the end of the 1st marriage, then the children for the 1st marriage won’t be entitled inheritance rights to assets that were acquired with the second marriage. With such scenarios, an existing POA or power of attorney should be revoked and replaced with a new one. A will should be cancelled, and there’s a need to make a new one. The UAE’s law states custodianship and guardianship, by default, is rightfully of the father’s when the parents go through divorce in UAE. However, it can differ from one case to another. 
Also Read: Things You Need to Know About Expat Divorce in UAE

 What Happens When Assets in UAE are Held Jointly?

There’s no better method in handling assets that are jointly owned than by having a settlement which is agreed mutually by the parties that are involved. A settlement will be necessary in clearing doubts and defining asset ownership as well as the children’s guardianship. The settlement and/or asset transfer would have to be finalized before the divorce agreement is signed. There is nothing that should be left for future settlement. 

Divorce can be stressful for parties involved. If you need guidance and assistance in the matter, don’t hesitate to talk to HHS Lawyers’ divorce lawyers and legal consultants in UAE

M. Al Khairy, LL.B. is a Senior Partner of HHS Lawyers in UAE. Practicing law for almost a decade, he has in-depth knowledge on UAE legislation with particular expertise on legal drafting, contract drafting, labor disputes, family law, and regulatory compliance for business organizations. Al Khairy also provides counsel on legal rights and obligations in the UAE to clients, including individuals and businesses subject to investigation or prosecution under Criminal Law by major regulators. Read more