Wasiyyah, hibah and faraid are instruments in property planning provided under Islamic law. It is thus important for Muslims to understand what these instruments are.
Will (Wasiyyah/Wasiat)
“It is prescribed that when death approaches any of you, if they leave something of value, a will should be made in favour of parents and immediate family with fairness. This is an obligation on those who are mindful of Allah.” – Chapter 2, verse 180 of the Quran
According to S2(1) of the Muslim Wills (Selangor) Enactment 1999, a “will” is an iqrar of a person made during his life time with respect to his property or benefit thereof, to be carried out for the purposes of charity or for any other purpose permissible by the Islamic Law, after his death. For context, “iqrar” means an admission made by a person, in writing or orally or by gesture, stating that he is under an obligation or liability to another person in respect of some right.
Although the distribution of a deceased Muslim’s estate is done automatically through faraid after their death, the deceased (acting as a testator) may dispose 1/3 of his estate to his non-quranic heirs. This amount is as reported in the Hadith on the authority of Saad ibn Abi Waqas:
“I was taken very ill during the year of the conquest of Mecca and felt that I was about to die. The Prophet visited me, and I asked: ‘O Messenger of Allah, I own a good deal of property, and I have no heir except my daughter. May I make a will, leaving all my property for religious and charitable property?’ The Prophet replied: “No” I again asked: ‘May I do so in respect of 2/3 of my property?’ He replied: “No” I asked: ‘May I do so with one-half of it?’ He replied: “No” I again asked: ‘May I do so with 1/3 of it?’ The Prophet replied: “Make a will disposing 1/3 in that manner because 1/3 is quite enough of the wealth that you possess. Verily, if you die and leave your heirs rich is better than leaving them poor and begging. Verily the money you spend for the pleasure of Allah will be rewarded, even a morsel that you lifted up to your wife’s mouth”
Intervivos Gift (Hibah)
Hibah is a contract (aqad) in which beneficial ownership of assets were given by donor to donee on a voluntary basis without valuable consideration and compensation, the proportion of hibah is based on donor’s will. It is essentially gift giving. Hibah includes alms and gifts.
Islam encourages the practice of hibah. This is supported by the Hadith whereby it is stated that “Exchange gifts among yourself and thus strengthen mutual love with each other.”
Another example supporting this is the Hadith which states “Give present to one another, because a present removes grudges.”
The elements of hibah are as follows:
(1) There must be a donor who provides the hibah
(2) There must be a donee who receives the hibah
(3) There must be an offer and acceptance (sighah) between donor and done
(4) Property must be in existence at the time of giving hibah
Distribution of Estate (Faraid)
Faraid is a concept in Islamic Law which determines the distribution of a deceased’s property to heirs in portions as set out in Al-Quran, As-Sunnah and Al-’Ijma.
In order to distribute an estate under faraid:
(1) There must be deceased
(2) There must be legal heirs
(3) The estate must exist at the time of distribution of estate.
Besides, several conditions of faraid that must be adhered to:
(1) There must be a real death of the deceased. If the deceased is a missing person, there must be pronouncement from court that the missing person is declared dead.
(2) The legal heirs are alive when the deceased is declared dead.
(3) There is no impediments to rights of heirs and their shares on the estate are rightful and justified.
Before the distribution is carried out as per the rules of Faraid, the following expenses must be deducted from the deceased’s estate:
1) Funeral expenses
2) Deceased’s debts (includes the unpaid zakats, performance of Haji and payment of Fidyah)
3) Settlement of any claim of Harta Sepencarian
4) Disposition of will, in which distribution of will shall not exceed 1/3 of total property of the deceased.
Examples of estates that can be distributed according to faraid rules are money (include money owed to the deceased), deceased’s property (immovable and movable), unit trust, bonds, stocks, dowry, jewelleries, ornaments and etc.
Examples of estates that cannot be distributed according to faraid rules are pension, khairat fund, gratuity, trust properties, SOSCO, payment of money under the GoldenHandshake Scheme and donation of money to the deceased’s family upon his death.
