1. HOLISTIC ESTATE PLANNING
A PRACTICAL APROACH TO
SHARI’AH COMPLIANT ESTATE PLANNING
FISA – AUGUST 2018
02 July 2013
HOLISTIC ESTATE PLANNING

2. Contents Introduction Basis of Islamic inheritance
Estate Planning in relation to Shari’ah Law

3. Islamic Inheritance Introduction Compliance Sources of Islamic Law
Primary - Quran
Secondary
Narrations of the Prophet (S.A.W)
Ijma (consensus by Islamic Scholars)

4. Basis of Islamic inheritance
November 2017
Basis of Islamic inheritance
Quran
“Allah (thus) directs you as regards your Children's (Inheritance): to the male, a portion 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 left children; if no children, and the parents are the (only) heirs, the mother has a third; if the deceased Left brothers (or sisters) the mother has a sixth. (The distribution in all cases ('s) after the payment of legacies and debts. Ye know not whether your parents or your children are nearest to you in benefit. These are settled portions 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; after 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; after payment of legacies and debt, if the man or woman whose inheritance is in question, has left neither ascendance or descendants(kalalah), but has left a brother or a sister, each one of the two gets a sixth. Should there be more than two, they share one third after payments of legacies and debts. This is stipulated 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

5. Basis of Islamic inheritance (cont.)
November 2017
Basis of Islamic inheritance (cont.)
Quran (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 left 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

6. Basis of Islamic inheritance (cont.)
November 2017
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 inheriting
That males will receive double the share of females

7. Basis of Islamic inheritance (cont.)
November 2017
Basis of Islamic inheritance (cont.)
Narrations of the prophet
Aboo Hurayrah (PBUH) reported that the messenger of Allah (S.A.W) said:
“if a child utters a sound (after being born) in inherits”
The prophet (S.A.W) gave judgement in the case where the deceased leaves behind a daughter, daughter of a son and a sister:
“the daughter receives (inherits) one-half, the daughter of the son receives (inherits) 1/6 and the residue is for the sister”

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

9. Wasiyyah & Inheritance
November 2017
Wasiyyah & Inheritance
Wealth
Funeral Expenses & Debts
Estate
Wasiyyah
In terms of Instructions
Inheritance
In terms of Quraan

10. Wasiyyah - Legacy It is a bequest or an instruction 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 entire wealth that serves as an increment to your deeds. Place it wherever you want to or (give it) to whomsoever you like” reported by Bukhᾱriy
Can consist of money, assets, benefits, usufruct over assets.
Can include instructions i.r.o. burial arrangements, conduct of life by heirs, etc.

11. Wasiyyah – Legacy (cont.)
Cannot exceed 1/3 of persons estate after expenses (funeral, debt etc.)
Those who benefit as heirs i.t.o surah Al-Nisa cannot again benefit out of this 1/3 allocation
If any Quranic heirs are blocked / excluded then they can benefit from the 1/3 allocation.
Non-muslims and charities can benefit
The bequest / instructions is implemented after death
Can be changed any time before death

12. Inheritance Estate Wasiyyah Inheritance Prescribed /Fixed
Residual Shares
Prescribed /Fixed
Shares
Wasiyyah

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

14. Inheritance (cont.) Based on relatives alive on date of death
Know family relationships well; as different relationships have different effects
Deprived relatives
Adopted child
Ex-wife
Illegitimate child
Non-Muslim
Understand blocking / excluding principle
Allocation in terms of:
Prescribed / fixed shares
Residual shares

15. Prescribed / Fixed shares (in relation 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

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

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

18. Prescribed / Fixed shares explained (cont
Prescribed / Fixed shares explained (cont.) (in relation to the deceased)
Grandfather
Possible shares
1/6
Conditions
Absence of a father
Blocks / excludes
Nephews & their sons
Grandmother
Possible shares
1/6
Conditions
Absence of a mother
Absence of a father
Exception for maternal grandmother

19. Prescribed / Fixed shares explained (cont
Prescribed / Fixed shares explained (cont.) (in relation to the deceased)
Daughters
Possible shares
1/2 – 1 daughter
2/3 – Multiple daughters
Conditions
Absence of a son
Confirmed share
Cannot be blocked / excluded
Granddaughters (only from son)
Possible shares
1/2 – 1 granddaughter
2/3 – multiple granddaughters
1/6 – 1 daughter
Conditions
Absence of multiple daughters
Absence of son

20. Prescribed / Fixed shares explained (cont
Prescribed / Fixed shares explained (cont.) (in relation to the deceased)
Sisters
Possible share
1/2 – 1 sister
2/3 – multiple sisters
Conditions
Absence of a daughter / granddaughter
Absence of a brother
Absence of father / grandfather

21. Residual Shares (in relation to the deceased)
Once the Quranic prescribed / fixed shares have been determined in terms of their proportions, the residual shares (balance / taseeb) is allocated
2:1 ratio 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

22. November 2017
11/27/2018
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 portion of my Estate each of my heirs are each to receive shall be certified by an expert in that Law, or qualified Islamic theologian, or a non-profit organisation which, in the ordinary course of their operations provide such certificates, appointed by my Executors in their entire discretion and such certification shall be proof of the dictates of Islamic Law in this regard

23. Inheritance Calculators: http://inheritance. ilmsummit. org http://www
See table
Complete
Click calculate

24. Illustration with Examples
November 2017
Illustration with Examples
Heirs / Beneficiaries in relation to deceased (male)
Wife, 1 son, 2 daughters & parents
Wife, 1 son & 2 daughters
Wife, 2 daughters (son predeceased leaving a son)
Wife, 1 son, 1 daughter (daughter predeceased, leaving 1 son )
Wife
1/ (12.5%)
1/ (12.5%)
1/ (12.5%)
Mother
1/ (16.67%)
Deceased
Father
Son
13/ (27.08%)
7/ (43.75%)
7/ (58.33%)
Daughter 1
13/ (13.54%)
7/ (21.88%)
2/ (33.34%)
Daughter 2
2/ (33.43%)
7/ (29.17%)
Son of Son
N/B
5/ (20.83%) 0%
Son of Daughter 1
Colour coded:
Fixed
Residual
Not applicable
(N/B – not born yet)

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

26. Issues to be considered in your Estate Plan
MARCH 2014
Issues to be considered in your Estate Plan
Will Issues
Provision for descendants of heirs who may predecease you
Contributions to PBO’s
In respect of minor children
Nomination of guardians
Nomination of Trust and Trustees
Recognise challenges i.r.o. apportionment of assets
Include a redistribution clause
Other Issues
Effect of different marital status’
Use of usufructs
Use of Trusts
The management of loan assets
Partnership and shareholding arrangements
Life insurance policy pay-outs
Pension / Provident / Retirement Annuity Funds pay-outs

27. Issues to be considered in your Estate Plan
MARCH 2014
Issues to be considered in your Estate Plan
Improving the position of spouse
Keep proper records of each spouse’s contribution towards the acquisition of assets
Record ownership in correct person’s name / jointly / or strategically in spouse name
Award contribution recognition to spouse e.g. House; this will increase estate’s liabilities on death
Recognise your spouse’s efforts and allocate monetary amounts per month to it; on cumulative basis this increases estate liabilities and her share of the estate
Create usufructs in favour of your spouse over any asset which is deemed to be a necessity during your lifetime or in your Will
Consider transferring assets to your spouse during your lifetime; no punitive taxes (for property this may incur transfer duty.)
Reducing death costs
Consider transferring assets to heirs in your lifetime to the extent that you can
Use your R100k donations allowance per annum
General
Consider using a Trust mechanism for the benefit of spouse and children in your lifetime

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

29. MARCH 2014
Trusts
From a shari’ah perspective an Inter Vivos Family Trust is an extension of the planner
During the lifetime of the planners, the beneficiaries may benefit from Trust at the discretion of the Trustees
On the death of the planner, the shari’ah apportionment of assets must be dealt with
The trust deed must make provision for this
Clear guidance must be spelt out as to how the assets are going to be distributed / managed by Trustees in these circumstances
Founder may benefit from Trust assets and may also apportion benefits to beneficiaries

30. THANK YOU & QUESTIONS