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The Importance of a Will in the UAE
The New Year is often a time when many try to get their finances in order, but if there is one thing that should perhaps come before any bigger financial decisions it should be that of drafting a will.
A Will is quite simply: ‘A document in which a person specifies the method to be applied in the management and distribution of his estate after his death.’
It is a legal instrument that permits a person, the testator, to make decisions on how his estate will be managed and distributed after his death. At English: Common Law, An instrument disposing of Personal Property was called a "testament," whereas a will disposed of real property. Over time the distinction has disappeared so that a will, sometimes called a "last will and testament," disposes of both real and personal property.
Now, you may already have a Will that has been drafted in your country of domicile but if you are a permanent resident of the UAE it is of huge importance to consider having a new legal document drawn up or the old original document attested so that it reflects your wishes.
One major misconception of those living in the UAE is that they are not liable or they simply forget about the consequences of Inheritance Tax whilst they enjoy their tax free income. As someone of British domicile, just becuase you are residing offshore does not mean you will be able to avoid it.
A key part of financial planning is understanding your net worth. The common mental measuring stick is our contribution to society and the material objects that we have accumulated. By that calculation, there are a lot of millionaires and paupers amongst us. The tendency is for people to either grossly over-value or under -value their wealth.
All too often the reality is, and much is the case with many of the individuals I work with, that planning for our financial futures is being put on the back burner. Tantamount to financial planning is making sufficient provision for retirement and managing your pension fund effectively. Unfortunately, the simple but glaringly obvious fact is that an abundance of people are facing a significant shortfall in their retirement income; it is essential to start saving for retirement early.