Malaysia: Islamic Estate Planning

Last Updated: 13 November 2017
Article by Jasmin Jamaluddin

Is it possible for a Muslim to make a will or must he or she rely completely on the mechanics of Faraid (the Islamic law of inheritance) upon his or her death? How do you, for example, ensure that your adopted child is cared for long after you are gone? What is the position of a jointly acquired property during the subsistence of a valid marriage when one of the spouses dies? Who has overall control over a Muslim's estate? Can a convert provide for his or her non-Muslim family? What, if any, are the legal and Syariah requirements for managing a deceased's estate?

As a Muslim, the above questions are but some of the many possible scenarios or issues that may trouble us at some point in time, especially if he has property (or even debts, for that matter) and realistically anticipates that death is inevitable. Being prepared means more than just attending to the spiritual departure and the consequences that follow immediately thereafter. Equally important, if not more so, is the provision for loved ones left behind in this temporal world, for one should ever be mindful of the advice of the Prophet, as narrated by Sa'd bin Abu Waqqas, that leaving everything to charity is not necessarily commendable in Islam.

"It is better for you," said the Prophet, "to leave your inheritors wealthy than to leave them poor begging others, and whatever you spend for Allah's sake will be considered a charitable deed even the handful of food you put in your wife's mouth."

This is the essence of Islamic Estate Planning (IEP), which is to provide such assistance to those in need, to help give advice generally, to plan for several possible contingencies in relation to your assets vis-àvis the available beneficiaries and to see above everything else, to the execution of what has been instructed by the testator (upon his or her departure) pertaining to the same, though within the ambit and scope of such instructions and naturally, within the constraints of the Shariah as practised and recognised in Malaysia.

IEP is seen as a noble service, helping Muslims become aware of their responsibilities to their families and helping to preserve harmony by avoiding dispute.

As a matter of fact, IEP is no different to most of the services provided by other financial planning groups such as banks and insurance companies, with perhaps the exception that it focuses exclusively on estate planning (as its name suggests) and is for Muslims only.

Thus, IEP will help you prepare, for example, the necessary documentation which will clarify the position of your existing assets and what is to be done with them upon your death or to see how your children (adopted or otherwise) is to be cared for, or even ensuring that your non-Muslim family (if you are a convert) is taken care of and not just your Islamic brethren.

The possible scenarios involving IEP are perhaps endless and will vary from person to person. Different individuals with distinct needs require differing approaches. Be that as it may, we can safely say without proper planning, one risks the pitfalls of uncertainty and the acrimony of inheritance-related sibling disputes. At the very least, IEP may help foster better relationships between surviving family members.

A Muslim may well leave everything to the mechanics of Faraid but it must be remembered that Faraid, despite its divinely operative status, will only address a class of beneficiaries in accordance with the Faraid rules which only takes effect upon death and not otherwise. The existence of Faraid does not mean that a person entitled under it can obtain his entitlement under a deceased estate immediately upon the occurrence of the death of the deceased person. Many steps must be taken before a beneficiary of an estate can enjoy the fruits of his inheritance.

By planning (writing a wasiat), a person can choose a trusted person or entity as an Executor for the purpose of administering his estate in accordance with his wishes once he leaves for the hereafter.

If a person wishes to go beyond the realms of division in accordance with the Faraid rules, Shariah-compliant customised planning needs to be done.

Whichever IEP company a Muslim goes to, it is hoped that through expert advice and service, the natural burden associated with having to plan and provide for loved ones can be professionally shared with a licensed entity specifically established for such a purpose.

No Muslim, irrespective of wealth or status, should underestimate the need to discuss IEPrelated issues, for no one can ever be too prepared, especially where death is concerned. The fate of surviving loved ones, to a large extent, is dependent on the calculated and informed decisions made during a person's lifetime. Regret is not an option.

If one needs a stronger reason, other than practical ones for IEP, the following reminder from the Prophet (peace and blessings be upon him) as recorded by At-Tirmithi might be compelling enough:

"A human being's feet will not depart from before his Lord on the day of Resurrection until he is questioned about five things:

  1. His lifetime – how did he consume it? 
  2. His youth and body – how did he utilise them? 
  3. His wealth – how did he earn it? 
  4. His wealth – how did he spend it? 
  5. And what did he do in regard to what he knew?"

Thus, make haste to fulfil what Allah and His Prophet (peace and blessings be upon him) have prescribed in the best possible manner, for its compliance is indeed an act of worship.

This article was first published in Labuan IBFC's Q Report, Issue 1 (2013)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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