International estate planning for expats

Understanding estate planning for expats

In an increasingly globalised world, the fall-out from a family death can be extremely challenging.

Succession laws differ from country to country, and expatriates may inadvertently get taxed twice - or spend years trapped in probate.

Rising property prices, and widespread misunderstandings about inheritance tax obligations, mean careful planning can be required to ensure your loved ones aren’t left with nasty surprises when you pass on your estate.

Expatriate and international estate planning

Why expats need a specialised estate plan

The challenge is that while creating sufficient resources to provide financial security is difficult, the process of effectively stewarding wealth for the benefit of future generations and endeavors you value is fraught with innumerable obstacles - especially for expatriates.

As an expat, your estate is likely subject to multiple legal systems, tax jurisdictions, and inheritance laws, each of which can complicate wealth transfer. Many things can impede the distribution of assets in a way that aligns with your values and provides the greatest benefit to your family and society. Without careful planning, your estate could be tied up in costly legal disputes, excessive taxation, or even frozen bank accounts due to differing international regulations.

Developing an effective and well-balanced estate plan is especially complex for expats. It requires careful structuring, a deep understanding of cross-border financial rules, and often, difficult but necessary decisions to protect your assets and ensure they are distributed according to your wishes. In many jurisdictions - such as the UAE - local laws may override foreign wills, meaning that without proper investment advice in Dubai and legally compliant documentation, your assets may be allocated according to local laws rather than your personal wishes.

Failing to plan properly can lead to:

Excessive taxation, reducing the amount of wealth passed on to your heirs
Legal conflicts, where family members may face delays, disputes, or even litigation over inheritance rights
Unnecessary financial risk, including frozen accounts, unintended beneficiaries, and loss of control over your legacy

At AES, we provide expert financial investment planning, specialise in helping well-established families preserve, protect, and transfer wealth in a way that ensures compliance with international laws while respecting personal values and intentions. Simply stated, we provide the guidance, perspective, and expertise needed to navigate the complexities of global estate planning—so you can have peace of mind knowing your legacy is secure for generations to come.

Common mistakes expats make in estate planning

It's not uncommon for expats in the UAE to make a number of mistakes with regard to their estate plan. Here are some things to consider:

Don't assume your current will covers UAE assets

The UAE follows Sharia law for inheritance unless a valid will is in place. Without a local will, assets may be distributed according to Islamic law, even if you're not Muslim. Many expats mistakenly believe their home country’s will is enough, but UAE courts may not automatically recognise it.

Don't forget to register a will in the UAE

Linked to point 1, a registered will (through the DIFC Wills Service Centre or Abu Dhabi Judicial Department) ensures your assets are distributed as you wish. Without doing so, your assets could be frozen and distribution may default to Sharia inheritance rules.

Your bank accounts or property may not be automatically transferred to your partner

Joint accounts in the UAE can be frozen until legal matters are finalised, and if a property is in your name, it might not be transferred to your spouse - Sharia law may dictate a different outcome.

Don't overlook inheritance tax

There's no inheritance tax in the UAE, but that doesn't mean you're not liable to this in the UK. Without proper planning, you might find you're liable to a large unexpected tax liability.

Not seeking financial advice at all, or taking advice from an unqualified adviser

Estate planning as an expat can be complicated - a qualified financial adviser in Dubai specialising in cross-border estate planning can help you navigate international tax laws, inheritance rules, and legal structures.

2. Key reasons why reviewing and updating your estate plan is essential

Best estate planning for expatriates

Good financial planning includes having strategies in place to also manage the effect of inheritance tax on your properties, your pension fund, your investments, and other assets which could form a significant portion of your wealth.

Considering the impact of illness or death, and getting a plan to cover the risks involved with life, are vital steps to achieving complete peace of mind.

Key components of an international estate plan

Life’s unpredictability necessitates careful planning, yet many individuals delay taking action to address the shortcomings of conventional estate planning arrangements. While wealth creation is one challenge, ensuring its effective protection and transfer across generations is another—one that requires both financial expertise and legal foresight.

Unfortunately, relatively few individuals receive comprehensive advice on how best to structure their estates for asset protection and intergenerational tax planning. Whether dealing with pensions, Death in Service (DIS) benefits, life cover, property assets, savings and investments, or lifetime intergenerational transfers, a well-structured international estate plan is essential to safeguarding wealth.

A bespoke international estate plan should address key risks, including:

Risk to your wealth following the death of the first spouse, such as remarriage affecting inheritance.
Loss of tax allowances due to ineffective wills or poor structuring of assets.
Redirection of your estate should the surviving spouse update their will to exclude original beneficiaries.
Inheritance risks due to divorce within beneficiaries’ families.
Missed opportunities for inheritance tax (IHT) planning, leading to unnecessary taxation on your estate.
Erosion of wealth across generations due to inadequate financial management.

Beyond simply directing assets to your nominated beneficiaries, an international estate plan must consider the complexities of cross-border taxation, differing inheritance laws, and family succession structures. These challenges are particularly pronounced for high-net-worth individuals, where your estate may span multiple jurisdictions, requiring specialised planning.

Your estate planning experts

We are experts in expatriate estate planning, and can create cost effective, tax-efficient, robust solutions for you.

Your estate plan may typically include:

A will,
Guardianship documentation,
Trusts,
Foundations,
Holding companies,
Insurances,
An inheritance tax (IHT) mitigation strategy.

Your plan will be bespoke and will ensure your family’s financial security over the long-term.

Wills & testaments: ensuring your assets are protected

Without a will tailored to the jurisdictions where you hold assets, you risk a misdirection of wealth under intestacy laws.

Writing a will is one thing, but can it be put into action?

Do your family and trusted advisers have all the information they need to carry out your wishes?

Do they know where to start?

A well-crafted will can not only ensure your estate is distributed as you wish but
also protect the surviving spouse’s interests and open tax planning opportunities - often overlooked in higher value estates.

We ensure your will isn’t just a piece of paper; it’s an actionable document that
empowers your loved ones to carry out your wishes.

And don’t forget about guardianship documents if you have children too!

Power of attorney: assigning financial & medical decision-makers

Many British expats mistakenly believe their spouse can sign key documents on their behalf should anything happen to them.

The misconception that your spouse, child or a professional will be able to manage your affairs if you become mentally incapacitated is dangerous…

It’s leading many people to think they don’t need a Power of Attorney (POA) in place…don’t make the same mistake.

If you don’t have a POA your family could be left in a vulnerable position, because they will not automatically be able to step in and act on your behalf. Instead, there will be a delay while they apply to the Court of Protection to obtain necessary authority.

This complication is entirely avoidable by completing a lasting POA form, and registering it with the Court of Protection.

Trusts: how they can help expats with asset protection

This is a classic way to pass wealth down through the generations.

While the scope to use them can be quite limited (there may be certain restrictions with regards to how much you can put into a trust without attracting tax), there are particular trusts which can useful in specific circumstances.

International succession planning, tax and trust laws are complex and sensitive areas. They require specialist expertise and considerable care.

Offshore trusts offer many benefits for high-net-worth expats and their families:

Protecting personal wealth from gains and income taxes
Protecting business assets
Creating an international tax plan for cross-border interests
Reducing or removing an estate's inheritance tax liability

2. Understand the tax implications of receiving a UK pension while living abroad

Living wills & advance directives for healthcare decisions

As an expat, having a Living Will ensures your medical treatment preferences are respected if you become unable to communicate.

However, in the UAE, there is no formal legal recognition of Living Wills, as medical decisions follow local laws and Sharia principles, which prioritise life-preserving treatments.

While some international hospitals may acknowledge a Living Will from another country, it's not guaranteed.

Expats should consider alternative options, such as a Health & Welfare Lasting Power of Attorney in their home country or discussing medical preferences with family and healthcare providers to ensure their wishes are known.

Estate planning for expats living in Dubai

Estate planning for ultra-high-net-worth expats in the UAE requires special attention due to Sharia law, inheritance regulations, and tax implications.

Here’s what you need to know:

1. UAE inheritance laws

Sharia Law applies by default - in the absence of a will, UAE courts apply Islamic inheritance laws, which distribute assets among family members based on fixed shares. Non-muslims expats can register a will to apply their home country’s laws instead.

2. Drafting a will in the UAE

Expats can register their will with:

Dubai International Financial Centre (DIFC) Wills Service Centre (Common law-based, for non-Muslims)
Abu Dhabi Judicial Department (ADJD) (Allows wills in English & Arabic).
Dubai Courts (For wills covering Dubai assets only).

If you have assets in other countries, you should consider multiple wills that apply to the different jurisdictions

3. Bank accounts and property

If you die in the UAE, your bank accounts (and even joint accounts) can be frozen and property not transferred to your chosen beneficiary until legal formalities are completed.

4. Business succession planning

If you own a business in the UAE, ensure clear succession planning, as shares can be subject to Sharia inheritance rules.

5. Tax considerations

There isn't inheritance or estate tax in the UAE, however, assets in your home country may be subject to taxes.

6. Life insurance and pension planning

Life insurance and pensions planning in UAE should clearly state beneficiaries to avoid delays in payouts.

7. Power of Attorney and guardianship

Without a UAE-registered will, a decision about your children's guardianship may be made by the courts. Designating a Power of Attorney (POA) ensures someone can manage your affairs for you.

Tax-efficient strategies for international estate planning

For global expat families and HNWI with assets across multiple countries, tax-efficient estate planning is essential to minimise inheritance tax, capital gains tax, and other levies that could erode wealth.

Here are some key strategies:

1. Understand cross-border tax rules

Different countries have their own inheritance tax laws, estate duties, and forced heirship rules. Understanding how your home and resident countries tax your estate can help you structure assets effectively.

2. Use trusts for asset protection

Offshore Trusts – can help protect assets from taxation in high-tax jurisdictions.
Discretionary Trusts – allow flexibility in distributing wealth while potentially reducing IHT.
Bare Trusts – can pass assets directly to beneficiaries, often reducing tax liability.

3. Lifetime gifting

Many countries like the UK allow annual tax-free gifts to reduce taxable estates over time.

4. Take advantage of double tax treaties

Some countries have double taxation agreements (DTAs) to prevent the same assets from being taxed twice.

5. Use life insurance to cover tax liabilities

Setting up a life insurance policy in trust ensures payouts go directly to beneficiaries, bypassing estate taxes.

6. Consider residency and domicile planning

Where you're legally domiciled can impact your estate’s tax liability. Some expats may benefit from changing their domicile status to avoid high IHT rates.

7. Establish tax-efficient investments

Some jurisdictions offer tax-efficient investment vehicles such as pensions, ISAs (UK), or offshore bonds. Holding assets in low-tax jurisdictions can reduce the burden on your estate.

8. Regularly review your estate plan

Tax laws change frequently, especially for expats. Your estate plan is a living document and should be regularly reviewed.

“Having worked my entire career in hostile environments to build a solid financial backbone for my family, the last thing I want is for the taxman to squander it all when I'm gone! AES have created a solid solution to offset a percentage of the anticipated IHT bill.”

Jim Owens

Spain

“My family's estate planning needs suddenly became pressing, and AES solved everything with compassion, professionalism and speed.”

Peter Weaving

Dubai

“Great advice - made me think about areas I'd been ignoring. I'm now assured my family and I are safe - no matter what may happen.”

K Murden

Dubai

Estate planning considerations for British expatriates in Dubai

The majority of British expats remain liable for UK inheritance tax.

Simply moving abroad and cutting all ties with Britain – even for decades – does not remove your liability to this unfair, and often entirely avoidable tax.

As a British expat, a critical part of your estate’s plan will be a robust inheritance tax mitigation strategy.

Inheritance tax (IHT) implications

While the UAE doesn't impose inheritance tax, UK expats living in the UAE may still be liable for IHT if they are considered UK-domiciled.

UK-domiciled individuals are subject to IHT on their worldwide assets, with estates over the £325,000 nil rate band taxed at 40%. Even if you have lived in the UAE for many years as an expat, you may still be classified as UK-domiciled, meaning your global estate remains within the UK IHT net.

Non-UK domiciled individuals are only taxed on UK-sited assets, such as British property, making estate structuring crucial.

Global families should consider trusts, gifting strategies, or domicile planning to reduce IHT exposure.

Managing international divorce settlement

Managing an international divorce settlement

Successfully managing a cross-border divorce dispute requires deep expertise to navigate complex financial issues.

Typically clients want to ensure that the right pension settlements and sharing arrangements are in place, while minimising tax liabilities.

Providing for dependants can require expert advice, given variables such as currency movements, remarriage and step-children.

Anyone involved in an international divorce also needs to think carefully about the value of any trusts, property or business assets they have.

Best estate planning advice for expats

Estate planning isn't only for ultra-high net worth families and corporations, it's essential for all expatriates:

Protect dependants of any age
Ensure assets are passed to the correct people
Remove all risk of contention

Without a plan in place:

Assets can be frozen
Probate can be costly
Dependants can lose visa rights
Your wishes can be overridden

What is estate planning?

Estate planning is all about arranging your personal affairs in a manner that suits your wishes. This can involve making a will, setting up trust arrangements and gifting strategies. It helps protect your wealth, minimise taxes, and provide for your loved ones.

What is a will?

A will is a legal document that comes into effect only after death and directs who will receive your assets, property and possessions upon death. It appoints a legal representative(s) to undertake the wishes of the deceased.

What happens if I don’t make a will?

If an individual dies without a valid will, they die ‘intestate’, and their wealth may not be distributed in the way they would have wished.

What is inheritance tax?

Inheritance tax (IHT) is a tax on the value of an individual’s estate (property, money, and possessions) upon their death. It primarily applies in the UK but can also affect expats with UK-domiciled status. It's paid upon a UK-domiciled person’s death if their estate exceeds their IHT threshold (known as the nil rate band of £325,000).

Amounts in excess of the nil rate band are liable to tax at 40% payable by the beneficiaries of the estate.

IHT is also liable on UK-sited assets for a non-UK domiciled individual – e.g., British property owned by someone from another country.

What is domicile and why does it matter?

Domicile is a complex UK common law concept that refers to your legal home - the country that you're permanently connected, regardless of where you live. The basic rule is that a person is domiciled in the country in which they have their home permanently or indefinitely – it’s usually the country you regard as your original homeland.

You can live abroad for many years and remain domiciled in the UK for example, and it matters because a British person’s liability for IHT may depend upon it. It's different from residency and has implications for IHT, estate planning and legal rights.

What is the current inheritance tax nil rate band?

The current nil rate band threshold is £325,000 for an individual and £650,000 for a married couple or civil partners.

If a person is widowed, it could be £650,000 depending on how much of the allowance was used when their partner passed away.

Additionally, the Residence Nil-Rate Band (RNRB) provides extra allowance when passing on a main residence to direct descendants (children or grandchildren). For the 2024/25 tax year, the RNRB is set at £175,000.

Combined with the standard nil-rate band, this allows individuals to pass on up to £500,000 tax-free, and married couples or civil partners up to £1 million, provided they meet the necessary criteria.

Both the nil-rate band and the residence nil-rate band are currently frozenuntil April 2028.

What gifts can be made that will be automatically free from IHT?

Certain transfers are automatically exempt from IHT, depending on who the beneficiaries are, for example spouses/civil partners and charities.

There are also gifts exempt from IHT, which include small gifts - up to the value of £250 in any one tax year – that can be given away to as many people as you wish.

An amount of £3,000 is annually exempt each tax year, which can be carried over to the following tax year, and subsequently you could have a maximum of £6,000 in one tax year.

Gifts for weddings or civil partnerships are allowed up to £5,000 from a parent to their child, £2,500 from a grandparent or great-grandparent and £1,000 from anyone else.

Gifts to UK-registered charities, museums, universities, or political parties are IHT-free, and leaving 10% or more of your estate to charity reduces the rate from 40% to 36%.

What can I do to reduce the amount of inheritance tax that may have to be paid on my estate?

Trying to reduce how much IHT is due on an estate is complicated, but you may be able to legally reduce how much tax is paid by:

Leaving a legacy to charity
Putting your assets into a trust for your heirs
Leaving your estate to your spouse or civil partner
Paying into a pension instead of a savings account
Giving gifts
Changing your domicile status to non-UK domiciled (this requires permanently severing ties with the UK and meeting strict legal criteria)

If I give away assets during my lifetime, can I avoid IHT?

You can give as much away as you wish to any chosen beneficiary (other than to a trust) during your life.

Such gifts only become exempt from IHT however, if you survive the date of the gift by seven years.

Should you die before the end of seven years, the value of the gift is subject to IHT.

If you die between three and seven years after making the gift, and the total value of the gift is over the £325,000 threshold, any IHT due on the gift is reduced on a sliding scale.

This is known as taper relief.

What is a trust?

A trust is a legal arrangement where you give cash, property or investments to someone else, or a trustee, so they can look after them for the benefit of a third person, or beneficiary.

When you put money or property in a trust, provided certain conditions are satisfied, you don’t own it any more. This means it might not count towards your inheritance tax bill when you die.

Trusts are complex and require bespoke advice, with which we can help.

Where can i get professional advice for effective estate planning?

You can consult a financial adviser, estate planner, or legal expert specialising in cross-border and expat estate planning. Firms like AES provide tailored advice to protect and transfer wealth efficiently.

What is the most important decision in estate planning?

The most important decision is considering what kind of legacy you want to leave. Once you have established the goal for yourself and your family, you can work with a qualified adviser to begin to build your plan.

What is the best trust for estate planning?

The best trust for estate planning depends on your unique financial situation, goals, and family needs. Trusts can help you manage and distribute assets efficiently, avoid probate, minimise taxes, and provide for loved ones according to your wishes. Factors to consider when choosing a trust include asset protection, flexibility, tax implications, and the level of control you want over distributions.

What are the 7 steps in the estate planning process?

1. Determine what's important to you and your family

2. Take an inventory of your assets and liabilities

3. Assess your default estate plan

4. Design your wealth transfer plan

5. Review any tax or legal implications

6. Implement and coordinate the plan

7. Review your progress and determine the next steps

How much does it cost to make a will in UAE?

Costs vary, but expect to pay between AED 5,000 – AED 15,000, depending on complexity and whether it's registered with DIFC Wills Service Centre or local courts.

Can I have multiple wills in different countries?

Yes, but they must be carefully drafted to avoid conflicts. Multiple wills help ensure assets in different countries comply with local laws without overriding each other.

How does estate planning differ for expats vs. residents?

Expats face different inheritance laws, tax rules, and cross-border legal issues that impact them in both their country of nationality and country of residence. Some countries apply forced heirship laws, so a properly structured estate plan is crucial to ensure assets go to your chosen heirs.

What happens if I die without an estate plan as an expat?

Your assets may be distributed according to local inheritance laws, which might not align with your wishes. In some cases, accounts can be frozen, causing delays and legal complications for your family.

Can I reduce my estate tax liability as an expat?

Yes, through trusts, gifting strategies, tax-efficient investments, and life insurance. Structuring your estate correctly can help minimise inheritance tax and ensure a smoother transfer of your wealth.

International Estate Planning For Expats in Dubai

Protecting you and your family