Building trusts have been a common thing in many countries. They have a longer history with the legal system. The concept of trusts has been introduced in Dubai and Abu Dhabi as well, though they have legal systems. A trust agreement is a legal agreement where the trust founders transfer their assets to the trustee, who manages all those assets to benefit the third party. People make trusts to secure their wealth and ensure proper distribution. If you are finding the article not easy to be understood, you can check with our Lawyers or legal consultants. Please be informed that the meaning of a lawyer in UAE means an Emirati Lawyer. However, the UAE’s trust agreements are created with legal considerations under Islamic and civil laws. Therefore Emirati specialized attorneys are needed. A federal law, known as Federal Decree-Law No.31/2023 about Trust, states legal process of forming a trust in UAE. It also tells us about legal documents required for its formation. Federal Laws only be advised by the most or biggest law firms in UAE. You can search few biggest law firms in UAE too. Trust laws are one of the new laws if we compare with the history of formation of laws in UAE.
Understanding of Trust
A trust is a legal entity formed according to the trust deed and complies with the Decree-Law provisions to accomplish the Trust’s Purpose.
Legal Requirements to Form a Trust in the UAE
There are certain legal requirements that a Trust must comply to ensure its foundation in the UAE:
The approval must come from the concerned and competitive authority.
A written agreement should be signed between the trust founders and the trustees to validate their acceptance in forming the Trust, where the trust founders will transfer their assets to the trustees, who will manage the Trust to help the needy people.
Experienced and concerned authorities should register and maintain the trust agreement.
After the approval of the concerned authority, a certificate will be issued that validates the Trust and the trust deeds for every individual. However, all the documents related to the Trust should be translated into Arabic to legalize them. In a conflict, the original language of Trust will be followed.
Information to Add to a Trust Agreement:
The trust founder should let other people know about their intention to make a trust.
The Trust’s beneficiary or beneficiaries should be identified, or at least a plan should be implemented to identify the right beneficiary.
Identify the types of assets they are transferring to ensure they will be used according to the Trust’s needs.
The trust founder must specify a time limit for the Trust; otherwise, it will be considered permanent unless at the court’s discretion.
A trust should be named for its specification.
The trustee’s designation should be announced to ensure the mechanism they must make for the Trust.
The authorities and power of the trustees should be determined.
If any of the above information is missed while making a trust agreement, the trust deed will be invalid; however, the Trust’s time limit can be determined later.
Specific Requirements for the Trust Assets
Trust Assets are the assets that the trust owns. They could be anything that matters to the interests associated with the Trust, such as movable and immovable assets. It allows the trust founder to transfer their assets, money, or property to the Trust if they meet the following criteria:
The trust founder can only transfer the property or assets that they own. They will need a lawyer to ensure that no other law is applicable other than determining their assets in the UAE for asset transfer.
No third party can claim the assets. Therefore, assets should have no rights or claims of any other person but be the property of the Trust.
The assets should be identified or could be identified in the future to be acquired if needed.
The trust founder has the option to transfer all their assets or just some of them. They do not have to transfer all their assets to the Trust, as establishing a trust is not a condition.
The financial value of the trust assets shall not be disclosed to anyone unless the trustee wants to disclose them to comply with the court’s orders in the UAE.
Term of the Trust
The term of the Trust validates its existence and operations. There are various ways to consider the term of the Trust. The best way is to timeline the Trust for a fixed term. The trust founder and the trustee can agree on a specific date and year to determine the terms of the Trust. Secondly, the term of the Trust can also be linked to a certain condition or event that may occur lawfully and in possible manners, for example, the death of the trust founder.
The trust assets should be distributed firmly at the end of the term, but if this does not happen, the court will intervene to ensure the distribution of assets at someone’s request. Any individual could be interested in knowing about the distribution of the trust assets.
How Can Ask the Law Help You with Trust Formation in the UAE?
Our trustworthy and knowledgeable lawyers provide you with complete information about forming a trust in the UAE. Our team of expert lawyers will also protect your assets, intellectual rights, and other wealth that can be transferred to the next generation. Establishing a trust to keep your wealth safe for the next generation is best.
We have also stated in the beginning that you can hire the services of specialized and biggest law firms in UAE. Trust laws can’t be delivered by everyone easily. It requires the good law firms or at least those attorneys in UAE who have the specific legal knowledge of trust deeds and management. Therefore the biggest law firms in UAE with a good reputation can be trusted easily.
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