What are the pros and cons of joint accounts? Are they only limited to spouses? What happens in case of death or divorce under sharia law?

Rebecca and John White had lived in the UAE for five years when it happened. John died suddenly and, within hours, Rebecca had not only lost her husband, she was also left without access to a dirham.

Why? Because everything they owned, including money to cover day-to-day expenses and savings, was held in joint accounts.

Accounts frozen

The people here are fictional but the scenario is perfectly possible.

That is because when someone dies in the UAE, their accounts are frozen until all debts are paid – and the court decides who should inherit the funds. And this applies to any bank account, even if it is joint.

UAE law defines a joint account as one owned equally by each of the signatories, unless they agree to split it differently.

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‘Either’ or ‘and’ account

In the Emirates, as with elsewhere, the joint account could be an ‘either’ relationship or an ‘and’ relationship.

In an ‘and’ relationship, instructions have to be agreed by both parties, says Tooran Asif, head of personal banking at Mashreq, whereas in an ‘either’ account, either signatory can operate it.

And, as is the case the world over, a salary can be paid into it and money can be transferred out to cover bills.

Non-relatives and joint accounts

The UAE government’s website says people can open a joint account with a family member who is a resident of the UAE, but some banks, such as Mashreq, also allow non-relatives to open joint accounts together.

The benefits are obvious – it is often easier to manage a family or couple’s finances from one account, and each signatory can see what each other is spending.

But not everyone is happy to share their income and spending habits with their spouse.

Divorce in the UAE courts

And if it all does go wrong between a couple and they decide to divorce in the UAE courts, no family laws exist here to cover the allocation of property.

The law assumes that all jointly owned property, including bank accounts, is held in equal shares

If one party is able to prove that they have made a larger contribution, they may be awarded a bigger share of the funds.

[Related: Sharia law and your money | Your marriage and your money | Why you need a will | The real cost of divorce]

Inheritance and wills

Yet if a married man were to die in the UAE, his wife would not necessarily receive his half of any monies in their joint account, even if he wanted her to.

Unless otherwise stipulated in a will – which is usually respected by the courts – sharia law will be applied, which means most of the funds could be awarded to a male relative.

If all documents to prove inheritance are in order, sharia courts in the UAE normally take a week to release the funds. But there are many cases that have taken weeks or months to sort out, potentially leaving a widow and children without money to live on for a long period of time.

The lesson? By all means open a joint account in the UAE, but keep funds in an offshore account in case the worse should happen, and draw up a will to ensure that any monies are awarded to the people you want to receive them.