Family constitution

Why is a Family Constitution/Charter Important for Family Businesses?

by BUSINESS

Family-owned businesses form a significant part of the UAE’s economic fabric, but they face unique challenges in governance, succession, and conflict resolution. The UAE’s Family Business Law (Federal Decree Law No. 37 of 2022) emphasizes the importance of a family constitution—a non-legally binding document reflecting family values and providing guidelines for business operations. A well-drafted family constitution can foster internal cohesion, establish clear roles and responsibilities, avoid conflicts, and pave the way for future generations. It also supports professionalization, enhances economic success, and provides frameworks for dispute resolution

Your_paragraph_text_png_copy_png

DIFC Introduces Digital Assets Wills

by BUSINESS

 

Traditional wills often fail to address the technical and legal complexities of digital ownership, leaving heirs unable to access or claim these assets. With the increased popularity of crypto and digital assets within the last few years, the ability to transfer and treat digital assets as you would more traditional assets, such as property, funds or shares, has become a pressing concern for many individuals and investors. Therefore, In October 2024, the Dubai International Financial Centre (DIFC) introduced the innovative Digital Assets Will, providing a groundbreaking framework for distributing digital assets upon passing that resolves these challenges, addressing the critical gaps in estate planning.

 

The Problem of Digital Asset Inheritance

Digital assets pose unique risks in estate planning:

  • Loss of Access: Without explicit instructions, beneficiaries may lack the technical means (e.g., private keys) to access digital wallets.
  • Legal Ambiguity: Many jurisdictions lack clear laws recognising digital assets as transferable property.
  • Security Risks: Centralized exchanges or custodial wallets may freeze accounts upon the owner’s death, leading to permanent asset loss.

The DIFC’s Legal Framework

The DIFC Digital Assets Will operates under Digital Assets Law No. 2 of 2024 and integrates three key components:

  • Non-Custodial Wallet: Built on Hedera Distributed Ledger Technology (DLT), it allows testators to retain complete control of assets during their lifetime while freely allocating them to beneficiaries as specific gifts upon their passing.
  • Tejouri Integration: Digital Assets Wills are linked with the DIFC’s Tejouri digital vault, which securely stores data in encrypted formats. Tejouri provides a unique platform that functions as an online safe for data, supported by a state-of-the-art onsite DIFC data centre and a secondary UAE-based backup data centre. This integration enhances security and accessibility for testators and beneficiaries.
  • Online Registration: The entire process, from drafting to registration, is conducted online. Testators can electronically sign their wills via video conferencing in the presence of witnesses. Once registered, the will is securely stored in the DIFC Courts’ database.

Key provisions include:

  • Support for BTC, ETH, USDC, USDT, MATIC. In the future, the DIFC wallet expects to support NFTs such as ERC 721, ERC 1155, Ordinals and HTS.
  • Flexibility to update beneficiary allocations without revising the entire will.

 

How the Digital Assets Will Works

Case Study: John, an investor, uses the DIFC Digital Assets Will to:

  • Register: He drafts his will online, listing his Ethereum holdings and NFTs as “specific gifts” to his children.
  • Assign Assets: Using the non-custodial wallet, he links his crypto wallets and allocates 60% of his Bitcoin to his spouse and 40% to a charitable trust.
  • Secure Storage: His will is encrypted and stored in Tejouri, accessible only to his designated executor.

Upon his passing:

  • The DIFC Courts validate the will via video-conferencing with witnesses.
  • Executors receive access credentials, ensuring seamless asset distribution without third-party interference.

 

Advantages and Implications

The DIFC Digital Assets Will solves critical problems by:

  • Ensuring Control: Testators maintain ownership until death, preventing unauthorised access.
  • Providing Legal Clarity: Digital assets are recognised as property under DIFC law, reducing disputes.
  • Enhancing Security: Decentralized storage and biometric authentication mitigate hacking risks.

For jurisdictions like the UAE, where 23% of residents hold digital assets, this framework positions Dubai as a leader in fintech innovation. 

 

Why This Matters

The DIFC’s solution exemplifies how legal systems can adapt to technological advancements. By addressing ownership, access, and enforcement, the Digital Assets Will offers a replicable model for other jurisdictions grappling with similar challenges. 

The DIFC Digital Assets Will represents a significant advancement in estate planning for the digital age. The UAE is one of the premier destinations for those seeking an organised, safe and promising digital investing environment. By addressing the complexities of digital asset inheritance with innovative solutions like non-custodial wallets and global accessibility, the Introduction of the Digital Assets Will positions Dubai as a leading hub for digital asset management and legal innovation. For individuals, it provides peace of mind—ensuring their digital legacy is preserved as meticulously as their physical one. It also strengthens Dubai’s reputation as a forward-thinking jurisdiction in the evolving world of digital finance.

 

How We Can Help

If you have any questions or require assistance with drafting and registering a Will, either a Simple Will or a Digital Assets Will, please get in touch with us at here.

67974e2b3cca1052dcd80559

Navigating Personal Status Laws in the UAE

by BUSINESS

Personal status law and its application to the vast and growing expatriate population in the United Arab Emirates (UAE) is often a point of contention when residing in the UAE. The UAE stands as a beacon of multiculturalism, thanks to its diverse population that spans nearly every nation on the globe. A common question among expatriates is, “Can I apply the law of my home country to my personal status issues?” The answer is often affirmative.

In its efforts to accommodate this diversity, the UAE has taken proactive and thoughtful steps to ensure that foreign residents feel recognised and respected, particularly regarding personal status laws. These measures ensure that individuals are governed by laws that align with their culture, background, and personal understanding.

In light of this, significant steps have been taken by the UAE government to include amendments to the UAE Civil Transactions Law No. 5 of 1985 concerning the application of personal status laws, followed by the groundbreaking enactment of the Federal Personal Status Civil Law No. 41 of 2022, setting a precedent within the region. Prior to this, Abu Dhabi led the way with its own Personal Status Civil Law No. 14 of 2021, tailored for the Emirate’s population.

For the average expatriate, navigating legal complexities may seem daunting. However, the introduction of these laws simplified the process by granting non-Muslim residents the ability to determine which legal framework governs their personal status matters. In order to ascertain the application of one law over the other, a non-muslim expatriate must consider their place of residence –

  • If the individual resides in Abu Dhabi, the applicable law is the Personal Status Civil Law No. 14 of 2021.
  •  
  • If the individual resides in the other six emirates (which includes Dubai), the Federal Personal Status Civil Law No. 41 of 2022 shall apply.

In addition to the laws mentioned above, Articles 12 and 13 of the UAE Civil Transactions Law No. 5 of 1985 allow the application of the law of the country where the marriage took place to govern matters such as marriage, its financial implications and divorce. In the event that applying the law of the country where the marriage took place becomes unfeasible during a dispute, the applicable law shall be based on the expatriate’s place of residence as above.

The legal framework introduced in the UAE provides expatriates with a clear understanding of the laws they are subject to, enabling them to familiarise themselves with their rights and obligations. By doing so, they can align their actions with the legal framework, fostering harmony between their personal choices and the laws of their country. These reforms highlight the UAE’s commitment to inclusivity and its pioneering role in accommodating multiculturalism through legal innovation.

Contact us to learn more about what services we can provide you. At Al Midfa & Associates, we offer comprehensive services tailored to meet your needs, ensuring that your rights are protected at every step of the way.

Contact us