By Diana Hamade
Diana Hamade is a lawyer and legal consultant with the Right of Audience before United Arab Emirates (UAE) Courts and the Dubai International Financial Centre (DIFC) Courts. The Dubai-based founder and managing partner of IALS (International Advocate Legal Services) is also a columnist, blogger, and author of many writings on UAE law covering Sharia in regard to family law and inheritance.
LAW CHANGES A GIANT STEP FOR UAE SUCCESSION PLANNING
T
he ancient religious trust known as the Jerusalem Islamic Waqf is coming back into vogue in Dubai. Not only are waqfs a way for families to set up charitable
foundations and launch their charitable funds, they are also popular among family business principals who want to organise their inheritance in confidence. This emerging trend, along with law
changes in the United Arab Emirates (UAE), could be a big boost for smoother succession planning. A waqf traditionally describes a legal
endowment of assets for religious or charitable causes with no intention of reclaiming said assets. It is where the concept of a trust we are all familiar with today began in Islam. Waqfs have been used for charitable purposes, and other resolutions like the family waqf and the joint waqf, but use declined in the Arab world due in part to controlling regulatory laws in many Arab states. The trust really stopped functioning as it once did about the time the Ottoman Empire fell after the first world war. The Arab world eventually lost confidence in it entirely because trustees did not always act in good faith and frittered away wealth. But now waqfs are evolving, for both
charity and family reasons, spurred on by the fact families here in Dubai want to set up their own charitable foundations and organise their succession. In relation to the former charitable type of waqf, their ambitions have been supported by the new
ISSUE 72 | 2018
CAMPDENFB.COM 11
Law No 14 of 2017 which intends to regulate endowments in Dubai. It was issued by Sheikh Mohammed Bin Rashid Al Maktoum, vice president and prime minister of the UAE, and ruler of the Emirate of Dubai. Law No 14 enables families to have full control of their assets and manage their affairs as a trustee would. Taking that control is a significant change of scene in the emirate and multigenerational family businesses stand to benefit. The new law created the Awqaf and Minors Affairs
Foundation, a Dubai government department for the legal supervision of religious endowments and consequent investments. Charitable foundations are expected to enjoy a new degree of independence under this initiative. As to the latter type, the family waqf, we see now that Dubai
has taken an unprecedented step in allowing its families to organise their succession where the need for a robust legal response is acute. They did this by drafting a law granting family businesses the ability to deal with their succession planning for the first time. The draft law gives them the option of either settling as a family through an agreement or foundation, or as a trust with the independent Dubai International Financial Centre. Family feuds take years to process in the courts and
repercussions include the withering away of the wealth they are often fighting over and the detrimental impact on the UAE economy. Succession planning should be a lot less painful, emotionally and financially, for multigenerational families of wealth once this law is issued this year as expected.
VIEW FROM THE GULF
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88
