“It is the duty of a Muslim who has anything to bequest not to let two nights pass without writing a will about it.” Sahih al-Bukhari
Currently, clients in England and Wales can legally choose to bequeath their assets according to Sharia rules, providing the will is signed in accordance with the requirements set out in the 1837 Wills Act.
If someone dies, however, without a valid will in place, English Law dictates the ‘Law of Intestacy’ will apply. This effectively distributes assets in a pre-determined, un-Islamic fashion to the legal heirs. Invariably this distribution will not be tax efficient and often will be contrary to both the wishes of the family of the deceased as well as contrary to Shariah law.
Writing a Sharia will
Distributing assets in accordance with the Quranic injunctions (Al-Wasiyya) can be a complex matter. To prepare a Sharia-Compliant Will it is necessary to understand how the estate is applied under Sharia successor rules.
There are three key steps that must be taken which are significantly different to traditional probate processes:
- First, the cost of the burial and any debts must be paid.
- Second, a third of the estate can be given to charities or other beneficiaries who would not otherwise receive the inheritance (‘sadaga jariya’).
- Finally, the remainder of the estate is given to a defined set of ‘primary’ and then ‘residual’ beneficiaries, allocated according to certain rules according to who is involved.
There are often a wide range of possible distributions upon death depending on the number of surviving family members.
A Sharia-Compliant Will is, therefore, a bespoke Will and is catered to your specific family requirements. As a result it usually requires detailed consideration of your family circumstances along with your assets and liabilities.
Under an Islamic will, Muslims can also:
- Appoint executors - including friends, relatives or lawyers - to handle their estate after they have died;
- Appoint guardians of any minors;
- Make provisions for minors, ie. to invest their inheritance for their maintenance, education or benefit. This can be invested in Sharia-compliant trusts;
- Specify recipients for their ‘up to one-third’ bequests; and
- Specify any charities they may wish to support.
There are also practical considerations to consider concerning Islamic rites of burial such as: avoiding post mortem, janazah (funeral prayer), ghusl (ritual washing), kafn (burial shroud), dafn (burial not cremation) and also fidya (compensation for missed fasts/prayers etc.) along with any wasiyyah (bequests). So it is important to specify in your Will that you wish to be buried in accordance with Islamic principles, as opposed to cremation.
All of these factors make the preparation of a valid will not just an Islamic obligation, but also a vital action required to mitigate tax, protect one’s assets, ensure one’s wishes are followed after death, and finally ensure the prospects of family disputes are minimised.
We would also recommend that you have a discussion with your Shaykh, Mufti or Molvi to ensure that your will is in line with your Madhab/Mazhab; since there are four Islamic schools of thought which can lead to a difference of opinion amongst religious leaders.
Sharia Law and discretionary trusts
An important option to consider is whether to place your assets into a ‘Discretionary Trust’ and to ask your Executors and Trustees to distribute your estate in accordance with the rules of Sharia. The advantage of this is that it gives considerable flexibility to accommodate a range of circumstances.
However there must be a level of trust involved as to who you appoint as your Trustees, after all they decide which beneficiaries are entitled. By setting up a Discretionary Trust, you are empowering your appointed Trustees to manage your estate and decide at their discretion how, when and who to distribute it to. You can, however, provide a ‘Letter of Wishes’ with the Discretionary Trust to provide your Trustees with guidance on how you want the assets to be distributed i.e. following Sharia principles and according to any specific wishes you indicate.
Important factors to consider when writing a Sharia Will
- You can specifically appoint Muslim executors to deal with your affairs.
- You can ring-fence and protect your estate for vulnerable family members - for example, children going through a divorce or bankruptcy - and still make your will Sharia-compliant.
- A strict Sharia-Compliant Will is not necessarily Inheritance Tax (IHT) efficient, meaning it could result in a 40% tax charge upon death. It is therefore vital to get legal advice on ways to draft Sharia-compliant wills that also reduce IHT obligations.
- If you are domiciled in India or Pakistan, you may be able to take advantage of the double taxation treaty and be liable for less IHT.
- If you own a business, extra IHT savings could be obtained if your business qualifies for Business Property Relief.
How LCF Law can help with Shariah-Compliant Wills
Good advice and careful drafting of a Will; including setting up the right type of Shariah-Compliant, tax effective Trusts, combined with carefully chosen honest trustees - will enable the production of a legally valid, tax efficient and Shariah-Compliant Will.
To find out more about making a Sharia Will and how LCF Law can help please contact Amjed Zaman, at LCF Law who specialises in cross-border matters, particularly in providing Sharia-Compliant advice and Wills.
Amjed is an Affiliate Member of the Society of Trusts and Estates Practitioners (STEP), a Member of the STEP Cross Border Special Interest Group and a Full Accredited Member of the Solicitors for the Elderly (SFE).
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