When a couple goes through legal proceedings for divorce in UAE, all assets are to be divided, including less tangible assets such as investments and pension plans. These assets will be divided just like other kinds of property.
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Process of Asset Division During Divorce in UAE
The process of asset division during divorce in the UAE can be handled by the couple on their own or with the guidance of the local court. Regardless of whether the court will be involved or not, the division of assets in a high asset divorce in UAE involves the following process:
Step 1: Differentiate between separate and community property
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There’s a stronger presumption under UAE and international legislation, whichever a couple chooses to apply during court proceedings for divorce, that assets that a couple accumulates while married are considered community property. This means the assets are owned by the spouses equally. Property that a spouse owned on his or her own prior to the marriage or received as inheritance or gift during the marriage will be separate property.
Separate property of a couple includes the following:
- purchased items with separate property,
- increase in value of separate property, and
- earnings on a separate property.
This is as long as the property owner has evidence of claim through financial records and other documents compiled with the help of a divorce attorney in Dubai, UAE for more info Click here. A separate property that belongs to one spouse can’t be divided during divorce proceedings in UAE. Local and international legislation relevant to the division of assets during divorce also states that property acquired by spouses prior to the divorce but after the date of legal separation will be considered as separate property. The date of legal separation isn’t necessarily the date a spouse moves out or leaves the other spouse.
Rather, it is the date on which the spouse decides in ending a marriage. It will require an act of physical separation that’s combined with other actions which clearly demonstrate a spouse decided in ending the marriage. The date of separation becomes a big issue when one spouse earns a significant amount of money or spends a considerable amount of money following a legal separation. When a couple does not agree with the date, it’s best to have a seasoned divorce attorney in Dubai, UAE advise the case and have the court decision following consideration of all available evidence.
Step 2: Determine property value
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The spouses or local courts if the spouses are not able to reach an agreement will assign a monetary value for each property item. An appraisal will help a couple in determining the value of a real property, including artwork and antiques.
Retirement assets are often very challenging in evaluating. The same goes for investments and stock options. They will require the guidance of financial professionals such as CPAs. As soon as a value has been attached for each property, the spouses can agree in splitting the money or asking the court in doing the property division for them.
Step 3: Divide the property
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Under local and international policies related to divorce, spouses can implement asset division by assigning certain property to each spouse, selling assets then dividing the proceeds, or allowing a spouse in buying out the share of assets from the other. The spouses can also agree in holding property together even following divorce proceedings in UAE.
Although continuing to hold property together is not the most desirable option for the majority of divorcing couples in UAE as it requires continued communication and financial relationship, there are couples that do agree to keep a family home up until the children have graduated. Others also keep the investment property with the hopes that they will increase their value down the line.
- Note: a couple has to assign debts that have been accrued during the marriage. This includes car loans, credit card debts, and mortgages. Couples that divide debts are to understand that a divorce order or separation agreement isn’t binding on the creditors that try in collecting community debt from any of the spouses.
If the court awards a specific debt to a spouse, the court can be asked by the other spouse to place a lien on the separate property on that spouse as security for the debt payment. It is, however, best practice if the couple tries in paying off marital debt when a judge has finally finalized the divorce and provided a divorce order. If you are selling your family home or your spouse will buy you out, there is often a house loan or house refinancing option available.
How do UAE Courts decide on property division?
High Asset Divorce in UAE: How Investments and Real Estate are Divided
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A fair, equitable asset division in UAE isn’t necessarily a 50-50 split. When determining both a fair and equitable distribution of a couple’s assets and liabilities, UAE Courts consider several different factors such as the following:
- Prenuptial and postnuptial agreements
- Separate debt
- Community debt
- Value of separate property
- Value of community property
- Income of both spouses
- Age and health condition of both parties
- Length of the marriage
How each of the aforementioned factors weighs between parties is going to significantly affect asset division during divorce in UAE. In cases wherein the income-earning abilities of the spouses are disproportionately and employment prospects aren’t likely as there are significant health issues, it’s not unusual for UAE Courts to rule in favor of the disadvantaged spouse.
How does the duration of marriage impact legal proceedings for divorce in the UAE?
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Often, spouses that choose to undergo divorce proceedings later in life will fall into any of these two categories:
- Short term marriage – spouses are likely to have substantial separate assets and there’s little to no combined or community property
- Long term marriage – this is where nearly all property can be considered as community property
To ensure that both spouses are on similar footing during divorce proceedings, the courts will divide community property equally and structure the award to a spouse accounting for substantial separate assets belonging to another spouse. Remember that the longer a marriage lasts, the more inclined local courts will be in the distribution of separate property.
