Contents Introduc)on Basis of Islamic inheritance Estate Planning - PowerPoint PPT Presentation

Contents � Introduc)on � Basis of Islamic inheritance � Estate Planning in rela)on to Shari’ah Law

Islamic Inheritance � Introduc)on � Compliance � Sources of Islamic Law � Primary - Quran � Secondary � Narrated by the Prophet � Ijma

Basis of Islamic inheritance � Quran & Sunnah of the Prophet (S.A.W) “Allah (thus) directs you as regards your Children's (Inheritance): to the male, a por,on equal to that of � two females : if only daughters, two or more, their share is two-thirds of the inheritance; if only one, her share is a half . For parents, a sixth share of the inheritance to each, if the deceased leA children; if no children, and the parents are the (only) heirs, the mother has a third ; if the deceased LeA brothers (or sisters) the mother has a sixth . (The distribuEon in all cases ('s) a7er the payment of legacies and debts. Ye know not whether your parents or your children are nearest to you in benefit. These are se>led por,ons ordained by Allah; and Allah is All-knowing, Al-wise.” Al Nisa, Verse 11 “In what your wives leave, your share is a half , if they leave no child; but if they leave child, ye get a fourth ; � a7er payment of legacies and debts . In what ye leave, their share is a fourth , if ye leave no child; but if ye leave a child, they get an eighth ; aAer payment of legacies and debt, if the man or woman whose inheritance is in quesEon, has leA neither ascendance or descendants(kalalah), but has leA a brother or a sister, each one of the two gets a sixth . Should there be more than two, they share one third aAer payments of legacies and debts. This is sEpulated so that no loss is caused (to any one). Thus is it ordained by Allah , and Allah is All-Knowing and Most Forbearing.” Al Nisa verse 12

Basis of Islamic inheritance (cont.) � “They ask thee for a legal decision. Say: Allah directs (thus) about those who leave no descendants or ascendants as heirs. If it is a man that dies, leaving a sister but no child, she shall have half the inheritance: if (such a deceased was) a woman, who leA no child, her brother takes her inheritance: if there are two sisters, they shall have two- thirds of the inheritance (between them): if there are brothers and sisters, (they share), the male having twice the share of the female . Thus doth Allah make clear to you (His law), lest ye err. And Allah hath knowledge of all things.” Al Nisa verse 176

Basis of Islamic inheritance (cont.) � The Quranic verses spell out: � Who should inherit � How much they should inherit � How one may inherit � How one heir blocks / excludes another heir from inheri)ng � That males will receive double the share of females

Order of rights to estate Islamic Jurists concur rights are graded in the following order: � Funeral Expenses � Debts � Religious Obliga)ons � Others � Wasiyyah (Legacy) � Balance to heirs (Inheritance) � Prescribed / fixed shares � Residual shares

Wasiyyah & Inheritance Wealth Funeral Expenses & Debts Estate • In terms of Wasiyyah Instruc)ons • In terms Inheritance of Quraan

Wasiyyah - Legacy � It is a bequest or an instruc)on in a Will � Concept confirmed in Islamic Law � Our prophet Muhammad (PBUH) had said: � “Truly Allah had given you a sadaqah (charity) of one third of your en)re wealth that serves as an increment to your deeds. Place it wherever you want to or (give it) to whomsoever you like” reported by Bukh ᾱ riy � Can consist of money, assets, benefits, usufruct over assets. � Can include instruc)ons i.r.o. burial arrangements, conduct of life by heirs, etc.

Wasiyyah – Legacy (cont.) � Cannot exceed 1/3 of persons estate acer expenses (funeral, debt etc.) � Those who benefit as heirs i.t.o surah Al-Nisa cannot again benefit out of this 1/3 alloca)on � If any Quranic heirs are blocked / excluded then they can benefit from the 1/3 alloca)on. � Non-muslims and chari)es can benefit � The bequest / instruc)ons is implemented acer death � Can be changed any )me before death

Inheritance Estate Wasiyyah Inheritance Prescribed /Fixed Residual Shares Shares

Inheritance Estate Wasiyya / Legacy Inheritance Prescribed / Fixed Shares Residual Shares

Inheritance (cont.) � Based on rela)ves alive on date of death � Know family rela)onships well; as different rela)onships have different effects � Deprived rela)ves � Adopted child � Ex-wife � Illegi)mate child � Non-Muslim � Understand blocking / excluding principle � Alloca)on in terms of: � Prescribed / fixed shares � Residual shares

Prescribed / Fixed shares (in relaCon to the deceased) � Husband – 1/4 , 1/2 * � Wives – 1/4 , 1/8* � Daughters – 1/2 , 2/3* � Father – 1/6* � Mother – 1/6, 1/3* � Granddaughters – 1/2 , 2/3 � Grandfather – 1/6 � Grandmothers – 1/6 � Sisters – 1/2 , 2/3 * Cannot be screened (blocked) See annexure for details

Prescribed / Fixed shares explained (in relaCon to the deceased) Wives Husband � Possible shares � Possible shares � 1/4 – No Children � 1/2 – No Children � 1/8 – Has Children � 1/4 – Has Children � Confirmed Share � Confirmed Share � Cannot be blocked / excluded � Cannot be blocked / excluded

Prescribed / Fixed shares explained (cont.) (in relaCon to the deceased) Father Mother � Possible minimum share � Possible minimum shares � 1/6 – No Children � 1/3 – No Children � 1/6 – Has Children or mul)ple siblings � Confirmed Share � Confirmed Share � Cannot be blocked / excluded � Cannot be blocked / excluded � Blocks / excludes � Blocks / excludes � Both grandmothers � Grandparents � Siblings � Nephews & their sons

Prescribed / Fixed shares explained (cont.) (in relaCon to the deceased) Grandfather Grandmother � Possible shares � Possible shares � 1/6 � 1/6 � Condi)ons � Condi)ons � Absence of a father � Absence of a mother � Absence of a father � Excep)on for maternal � Blocks / excludes grandmother � Nephews & their sons

Prescribed / Fixed shares explained (cont.) (in relaCon to the deceased) Daughters Granddaughters (only from son) � Possible shares � Possible shares � 1/2 – 1 daughter � 1/2 – 1 granddaughter � 2/3 – Mul)ple daughters � 2/3 – mul)ple granddaughters � 1/6 – 1 daughter � Condi)ons � Condi)ons � Absence of a son � Absence of mul)ple daughters � Absence of son � Confirmed share � Cannot be blocked / excluded

Prescribed / Fixed shares explained (cont.) (in relaCon to the deceased) Sisters � Possible share � 1/2 – 1 sister � 2/3 – mul)ple sisters � Condi)ons � Absence of a daughter / granddaughter � Absence of a brother � Absence of father / grandfather

Residual Shares (in relaCon to the deceased) � Once the Quranic prescribed / fixed shares have been determined in terms of their propor)ons, the residual shares (balance / taseeb) is allocated � 2:1 raCo for male and female � Priority / Ranking (taseeb) � Sons & daughters � Grandsons & Granddaughters � Father � Brothers & Sisters � Nephews & their sons � Uncles & their sons � It is possible to get a share through prescribed / fixed shares and through residual shares

The Common Clause I appoint as the heirs of the whole of my Estate my heirs in accordance with Islamic Law , provided that the effect of this clause, and the por)on of my Estate each of my heirs are each to receive shall be cerCfied by an expert in that Law, or qualified Islamic theologian , or a non-profit organisa)on which, in the ordinary course of their opera)ons provide such cer)ficates, appointed by my Executors in their en)re discre)on and such cer)fica)on shall be proof of the dictates of Islamic Law in this regard

Inheritance Calculators: hlp://inheritance.ilmsummit.org hlp://www.islamicsocware.org/irth/irth.html � See table � Complete � Click calculate

IllustraCon with Examples Heirs / Beneficiaries in relaCon to deceased (male) Wife, 1 son, 1 Wife, 1 son & 2 Wife, 2 daughters Wife, 1 son, 2 daughter (daughter daughters (son predeceased daughters & parents predeceased, leaving 1 leaving a son) son ) Wife 1/8 (12.5%) 1/8 (12.5%) 1/8 (12.5%) 1/8 (12.5%) Mother 1/6 (16.67%) Deceased Deceased Deceased Father 1/6 (16.67%) Deceased Deceased Deceased Son 13/48 (27.08%) 7/16 (43.75%) Deceased 7/12 (58.33%) Daughter 1 13/96 (13.54%) 7/32 (21.88%) 2/6 (33.34%) Deceased Daughter 2 13/96 (13.54%) 7/32 (21.88%) 2/6 (33.43%) 7/24 (29.17%) Son of Son N/B N/B 5/24 (20.83%) 0% Son of Daughter 1 N/B N/B N/B 0% Colour coded: Fixed Residual Not applicable (N/B – not born yet)

Special Cases � Simultaneous deaths � Missing person � Adopted children � Step Children � Mul)ple wives � Aul / Radd adjustments � Reverts (embracing Islam) � Foetus � Divorce � Absence of Standard heirs

ApporConment of Assets – a challenge Heirs / Beneficiaries in relaCon to deceased (male) Wife Son Daughter Daughter House R1,000,000 Car R100,000 Investments R100,000 Insurance Policies ??? Share (100%) 1/8 (12.5%) 7/16 ( 43.75%) 7/32 7/32 (21.88%) (21.88%) Inheritance Value R1,200,000 R150,000 R525,000 R262,500 R262,500 Total Allocated Difference