Money, Assets and Marriage in the UAE in conjunction with Fintasticfemales
03 Mar 2023
We all know that marriage is the legally or formally recognized union of two people as partners in a personal relationship and we hope that this would be …. for better or for worse … but in reality, couples argue and sometimes even drift apart.
Having been involved legally in various family issues, especially during and following the covid period, I have seen many arguments revolve around the issue of money or financial instability.
I believe that there should be some financial transparency between the couple so as to ensure a number of issues are understood by the couple:
1. Prior to the marriage - An understanding of each parties’ finances, assets and debts, not with the intention of having an automatic entitlement to the other’s wealth but to ensure that individual finances are properly managed, leading to wholesome negotiations to be documented in the form of a Pre or Post Nuptial Agreement which the parties may wish to enter into.
2. During the marriage - in the unfortunate event of a spouse falling ill, being incapacitated or dying, the other spouse is appropriately able to deal with any issues. This would not only include having access to money but also important documents such as insurance, medical or life policies.
3. During any separation or divorce – to ensure any legal entitlements are fulfilled.
The Papers in the UAE have often reported that divorce is an increasing social concern in the UAE. I illustrate below how one of the causes in the reasons given for the high rate of divorce could be finance related (and may well include other factors):
- marital infidelity – the spouse engaging in the affair may be spending family money.
- poor communication – outside distractions ie hobbies, social events cost money and can distract one from issues at home leading to poor communication between the couple.
- job loss - the loss of an income is always a financial strain especially if the income is supporting the family.
- other financial strains – increasing expenses in line with inflation can cause hardship to the family purse.
- social media – curiosity and peer pressure to keep up appearances, attend the new venue or to fit in with the crowd can often lead to one living outside of their means.
- Ease of available loans – adds to the already increasing debt that may build when a tight hand or sharp eye is not kept on your finances.
- cultural differences - awareness or ideas about how to spend or save money can cause differences in opinion when it comes to finances.
In light of my daily interaction with aggrieved clients, I see a trend in matters that arise and list some of them below for you to consider :
1. Traditional stereotypical views of the man being the breadwinner and the woman staying at home, should be put aside especially in this day and age of equality, both on the home front or on a professional level.
2. As far as possible, there should be transparency in aspects of the family finances including assets, income, outgoings and debts.
3. Each party should make their own arrangements to ensure they have access to money -ie having their own bank account.
4. When acquiring a large asset such as a family home, you should try and ensure that it is registered in joint names to prevent one party being at an unfair advantage in the unfortunate event of divorce. In the UAE, an asset(s) registered in one person’s name is their sole asset. As there is no concept of beneficial interest in the UAE, depending on any financial contribution made by the non-named party, they may not have a claim in respect of that asset.
In line with the above, throughout my career I have seen an increased interest and desire to enter into Pre or Post Nuptial Agreements and I would certainly advise couples to consider entering into such contracts. Although there will be an initial expense in having the document legally drafted by a Family lawyer, the costs would be minimal compared to the legal fees for going through a contested divorce in any jurisdiction.