What is it?
Islamic Estate Planning is the act of writing Wills or the distribution and disposal on someone’s Estate (wealth and property) upon his/her death in accordance with the Shariah Law.
How does it work?
The Prophet Muhammad (SAW), charged followers thus; “It is the duty of a Muslim who has something which is to be given as a bequest, not to have it for two nights without having his Will written down regarding it”. The Islamic Will (Al Wasiyya) is similar in form and structure to the conventional Will. While the Islamic Trust takes effect during the lifetime of the creator and immediately upon execution of the Trust Deed.
Islamic Wills (Al Wasiyya)
Al Wasiyya, or Islamic Will, is similar in form and structure to the conventional Will. The main objectives of having Al Wasiyya are to reduce the probate time and make distribution of wealth more seamless as heirs are expected to respect the instructions as outlined in the Al Wasiyya. Appointment of Executors (Wasi), Trustees and Guardians in Al Wasiyya are a necessary part of the structure ensuring the protection of beneficiaries, particularly where minors are involved.
In Wasiat, you can only gift 1/3 of your assets to heirs and non-heirs of the family. Non-heirs here refer to charities and non-Muslim relatives, very common for those who have converted to Islam. The remaining 2/3 of your assets follow Faraid laws. The exceptions are where the Testator (the writer of the Will) obtains approval from all the Faraid heirs to agree on his Wasiat distribution.
Islamic Trust
Unlike Al Wasiyya (Islamic Will), Islamic Trust takes effect during the lifetime of the creator and immediately upon execution of Trust Deed. It will not pass through probate nor be frozen upon death. Also a kind of Living Trust, Islamic Trust is not subject to third party infringement; it remains private and confidential, and secures and protects the rights of the beneficiaries. The most appropriate Trustee would be an Institutional Trustee and not an individual/person for perpetuity reasons. The duration of the Trust will depend on the object – assets in Trust – as well as the number of years the Trust is set up for.
Click here to learn about other Trusts that may be considered in Islamic Estate Planning.
Benefits
The main benefits of having an Islamic Will are to reduce the probate time and make distribution of wealth more seamless as heirs are expected to respect the instructions as outlined in the Al Wasiyya.
Through expert advice and service, the natural burden associated with having to plan and provide for loved ones is professionally shared.
Islamic Estate Planning helps you 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.
Build a legacy that lasts
#LegacySeries
At FBNQuest Trustees, we provide the expertise for the establishment of a well-crafted Estate Plan, to ensure that your assets are well protected and managed according to your desires.