Justice: Transferring estate liquidation to “Enforcement” and freezing accounts
In a move aimed at fundamentally transforming the system for settling estates and managing joint assets, the Saudi Ministry of Justice has proposed a strategic project to amend the regulations governing the division of joint assets. The project focuses on transferring liquidation and sale jurisdictions from the courts to the "Support and Liquidation Center" (Enforcement), while also imposing strict measures to freeze the accounts of deceased heirs immediately upon death to ensure the protection of rights. This will be done through a public opinion survey platform.
The context of judicial reforms and Vision 2030
This move comes within the broader context of legislative and judicial reforms underway in Saudi Arabia under Vision 2030. Since the launch of the Vision, the judicial system has worked to automate procedures and reduce reliance on paper transactions, in parallel with the issuance of the Civil Transactions Law, which has established a firm legal framework. This new amendment aims to address the long-standing challenges of protracted inheritance cases, which used to drag on for years in the courts, resulting in the freezing of substantial economic assets and preventing heirs from benefiting from them.
Key features of the project: immediate freeze and a pivotal role for "enforcement"
The draft law clearly stipulates the mandatory immediate freezing of all financial transactions related to the deceased deceased person or partner upon death. This includes bank accounts, investment portfolios, and accounts in government and official applications, thus preventing any manipulation of assets before the inventory and division process is completed. The draft law also establishes the role of the "Support and Liquidation" center as an executive arm responsible for sales and liquidation, thereby reducing the administrative burden on judges and allowing them to focus on adjudicating substantive disputes.
Expected economic and social impact
This decision is expected to have a wide-ranging positive impact on both the economic and social levels:
- Economically: Accelerating the settlement of estates will contribute to injecting significant cash liquidity into the market that was disrupted by legal disputes, and will also recycle real estate and investment assets more quickly, thus boosting the local economic cycle.
- Socially: Reducing litigation periods and clarifying procedures will reduce family disputes that often escalate with the length of the conflict, thus preserving social ties among heirs.
Digital transformation and division paths
The ministry linked the division procedures to the comprehensive digital transformation process, whereby operations will be integrated with the "Inheritance Division" platform and other judicial systems. The regulations identified two main paths for division:
- Consensual division: This gives partners the freedom to distribute assets amicably and to document this officially.
- Judicial division: This is resorted to when an agreement cannot be reached, and includes public auction or in-kind division according to fair assessments.
The amendments also granted the "liquidator" broad powers, including limiting debts and settling obligations, and even selling assets internationally if the interest so requires, with supervisory controls that allow the support center to dismiss him in case of breach of his duties, and guarantee the partners the right to object to ensure transparency and fairness.
