بِسۡمِ اللهِ الرَّحۡمٰنِ الرَّحِيۡمِ
The transmission of wealth from one generation to the next is among the pivotal aspects of human civil society, holding prominence in nearly all legal systems. This significance is particularly pronounced within Islām, where an individual's authority to distribute their wealth according to their wishes upon their demise is circumscribed by Divine law. While the most common means of wealth transfer upon death is through a Will, recent trends suggest an increasing utilization of alternative methods for this purpose. The approach employed in Islāmic Wills largely hinges on one's interpretation of such Wills and whether one subscribes to the principle that the ends justify the means, thereby employing methods that may not strictly adhere to Sharīʿa-compliance to achieve desired objectives.
The allocation of a deceased Muslim's estate is governed by Divine law (Sharīʿa), limiting the array of estate planning instruments available to Muslims. In recent decades, the concept of establishing an Islāmic Will has gained traction, particularly among Muslims residing in the West, aiming to adhere to the Divine injunctions of Islāmic succession law. However, Muslim scholars have not fully explored the complete spectrum of estate planning options available. The notion of transferring all one's wealth into a Will trust upon death, proposed in the U.K. approximately 20 years ago, has become established, with the majority of solicitors and Will writers of Islāmic Wills opting for this conventional approach rather than exploring alternative avenues. The cost of such a Trust-based Islāmic Will varies in the U.K. from tens to thousands of pounds. In most cases, the two types of Will trusts employed in Islāmic Wills are:
1. Discretionary trust, wherein the entirety of the deceased's estate is transferred into a trust, affording trustees the discretion to distribute the estate among beneficiaries.
2. (Flexible) Life interest trust, whereby the deceased's entire estate is effectively transferred to the surviving spouse to mitigate any inheritance tax (IHT). Trustees are instructed to distribute the estate according to Islāmic law to heirs, albeit in the form of gifts from the surviving spouse. The timing of estate distribution may raise Sharīʿa-related concerns, necessitating further estate planning from a tax perspective.
Muslims in North America encounter similar challenges to those in the U.K., as the legal systems in most U.S. states and Canadian provinces closely resemble English law concerning succession law. The estate planning methods employed by Muslims in North America differ significantly from those of U.K. Muslims. Many affluent individuals in North America utilize a revocable living trust as the preferred form of estate planning. Regarding Islāmic Wills, Dr. Monzer Khaf's Schedule of Mawarith can be utilized and has been endorsed by Islāmic organizations in North America such as ISNA (Islamic Society of North America). Dr. Monzer Khaf's Schedule of Mawarith provides detailed guidelines on inheritance division in various scenarios, obviating the need to establish a testamentary trust. Dr. Monzer Khaf's Schedule of Mawarith draws on the rulings of Hadrat Zaid bin Thabit and the traditional Malaki fiqh, incorporating the doctrine of wassiyah wajiba in favour of an orphaned grandchild, which is enshrined in law in most Arab countries.
Dr. Abid Hussain has developed a similar Schedule of Inheritance based on traditional Hanafi fiqh, which can be similarly integrated into an Islāmic Will. This Schedule delineates all legal heirs of the deceased and specifies the inheritance share of each heir in various scenarios. One significant advantage of incorporating a Schedule of Inheritance in a Will is the reduction of potential challenges or disputes, as the heirs are identified, and their shares clearly stated, mitigating the possibility of disagreement among trustees or unnecessary delays in estate distribution. Should a trust format for a Will be considered preferable, a Schedule of Inheritance can still be incorporated into the Will (testamentary) trust. Both Dr. Monzer Kahf's Schedule of Mawarith and Dr. Abid Hussain's Schedule of Inheritance (Hanafi fiqh) typically span over 30 pages. If the length poses an issue, English law permits incorporation by reference, although the referenced document must be submitted when applying for probate.
Other estate planning instruments yet to be explored include Will substitutes and Super Wills. While simply drafting an Islāmic Will does not guarantee Sharīʿa-compliant estate distribution posthumously, it is imperative for the testator to delineate their estate comprehensively and devise a Sharīʿa-compliant estate plan to ensure conformity with Islāmic principles.
Will Substitutes
This emerging field in estate planning was the subject of an international conference in March 2015 at Lady Margaret Hall, Oxford. Also known as non-probate instruments, Will substitutes are legal instruments that transfer property to beneficiaries upon the donor's death. While some may not be Shariah-compliant, others may play a role in estate planning for Muslims. Some forms of Will substitutes are currently utilized by certain Muslims but lack sanction from Islāmic scholars.
Super Wills
Recognized only in select jurisdictions, Super Wills can modify the disposition of non-probate instruments.
A. Hussain