Right now, the world is going through a challenging time—everything is filled with confusion and uncertainty, and many people around the world are falling victim to the coronavirus. Unfortunately, these are the times when people need to make sure they have prepared for the worst-case scenario. They need to make sure their assets, family guardianship(s) and many other factors have been legally documented in their will.
When a person passes without a will—intestate as the law calls it—the property of the deceased is distributed according to a formula fixed by law. In other words, if you do not have a will, the land/state where your assets are situated could very well decide on how they are distributed.
Asset(s) or your estate does not only apply to just your real estate and/or immovable property. It also applies to any cash held in any bank accounts, cars, furniture, gratuity, death-in-service benefits, bonds, jewellery, family heirlooms, works of art, etc. Basically, anything owned by you at the time of death.
Usually, when an expat passes away, all bank accounts—single and joint—are blocked immediately to freeze all transactions on the accounts of the deceased. This process safeguards any payment that needs to be made after an expat has passed away, such as any outstanding loans or debt payments. Please note that unfreezing of the account(s) can only be carried out by a local court order.
A registered “last will & testament” is the only document that details exactly what you would like to happen to your estate in the event of your death. This document can cover all aspects of your life, from physical assets to appointment of guardians (both temporary and permanent).
Usually, a person thinks about a will when they have purchased a property or have a large sum of money. However, if you have children, that itself is a key reason to have a will.
Usually, when an expat passes away, all bank accounts—single and joint—are blocked immediately to freeze all transactions on the accounts of the deceased. This process safeguards any payment that needs to be made after an expat has passed away, such as any outstanding loans or debt payments. Please note that unfreezing of the account(s) can only be carried out by a local co
A registered “last will & testament” is the only document that details exactly what you would like to happen to your estate in the event of your death. This document can cover all aspects of your life, from physical assets to appointment of guardians (both temporary and permanent).
Usually, a person thinks about a will when they have purchased a property or have a large sum of money. However, if you have children, that itself is a key reason to have a will.
What a will includes
Guardianship (both interim and permanent) of your children below the age of maturity.
A guardian is someone you can appoint who will take care of your children after your death. Usually, your partner (the biological parent) is the first person to whom the children will go. However, in an instance where both the parents pass away, then you need a guardian to step in—usually a blood relation—and look after your children. A temporary guardian is a person living locally who will step in to will look after the children, allowing enough time for the permanent guardian to take over. Within the GCC, as the majority of expats have their families living abroad, their having a local guardian is very important as the authorities may get involved in the event of both parents passing away. Permanent guardians—also usually the blood relatives—will look after the children until they reach the age of maturity. They are also responsible for all expenses related to living, food, and schooling.
Executorship (who will execute the will on your behalf).
These are the persons responsible for looking after the financials on behalf of the children, making sure all debts are cleared, and transferring the net assets to the beneficiaries. Their role also includes providing all documents to the authorities, plus opening trust accounts for the children.
The Beneficiaries (who will inherit on your behalf).
These are the persons—usually the partner and children—who will inherit the assets after your passing away. Please note that having a default beneficiary is recommended, especially in cases where there are young children involved.
Islamic wills
Many Muslims, locals and expats, assume that they do not need a will as the estate will automatically be divided. However, every Muslim should have one due to the following reasons:
In the case of a revert (someone who converted to Islam) having a will is important, as post-death protecting the body of the deceased—i.e. burying the person according to Islamic principles—is mandatory.
You are allowed to make a will for up to one-third of your estate, as per Islamic law (usually for charity purposes). Naturally, this needs to be stated in a will.
Choosing the right persons to manage your money is very important. If it is managed by the wrong person, not only can the funds be mismanaged, but inheritances could also be invested in interest related funds—this is strictly against Islamic Law.
Power of Attorney
A Power of Attorney (POA) is a document that allows you to appoint a person(s) to act on your behalf when dealing with your estate/finances. It is notarised in the jurisdiction where you would like to use it.
This document is essential. Think of situations where someone is in a coma and wakes up in five to 20 years. In such cases, finances need to be able to continue even when the breadwinner is inactive.
Sadly, some accidents and disasters can occur wherein it is very difficult to identify the people who have died, such as the Malaysia Airlines tragedy that happened a few years ago. In these situations, it can take an awfully long time for death certificates to be issued. In fact, according to international law, if someone is missing and/or presumed dead, there is a waiting period of up to seven years. In some countries, this may take up to ten years.
This is why we recommend a POA— it ensures that a family can deal with the running of the businesses/estates/companies/bank accounts etc. and that the finances do not stop.
Simple matters such as dealing with company matters, passport renewals, and bank accounts all require the use of a POA.
A POA is to be used during the lifetime of a person and usually becomes null and void when there is a confirmed death, i.e. when a death certificate has been issued.
Please note that a POA document is not a to substitute a will—its job is to complement it. A POA works during a person’s lifetime, and the will is activated upon the issuing of a death certificate.
A POA should be set up for each and every country where the person lives or has assets. Therefore, it should also be notarised in those jurisdictions so that it is considered acceptable. There is no concept of having a global POA.
Things to also consider
Keep separate bank accounts in addition to any joint accounts you may have if you are married, and have a backup offshore bank account. Bank accounts that are maintained outside may not be frozen.
If you have an existing insurance policy, check with your agents if you have filled out the “beneficiary forms” correctly. Also, check with your employer for any similar forms that you can complete.
Keep separate visas, especially if you are a working female—do not be sponsored by your husband. This is because all visas are cancelled when the main sponsor passes away.
Keep a list of assets (an inventory) and share this information with your family. This should also be shared with your family in your home country. Ensure that the after-death arrangements are taken care of, including any debts and bills, to avoid complicating an already terrible and tragic transition for loved ones.
As difficult as it is to think about death and the arrangements that follow, making these decisions matter because, without them, the security of our families is at stake. So, let’s do everything we can to guarantee them a comfortable future.
Mohammad Marria is an expert in succession planning issues and has been in the business of helping people draft their wills for over 30 years in both the UK and GCC. He has written extensively educating expats on the necessity of having a will. Mr Marria also has a background in financial services and real estate, adding to his wealth of knowledge on the subject.
