Zainal was a successful businessman. He had all the trappings of success- a Mercedes Benz E-class, his own building named “Wisma Zainal” and was a respective amongst his peers. He was in the construction industry and had a ‘Class A PKK License’ construction company registered with the Ministry of Entrepreneurial Development and the Ministry of Finance. However, to secure and perform the contracts, his company had to borrow from the Bank and he had to give his personal guarantee as a company director.
One day, he had a fatal stroke and had to undergo immediate surgery. The effect was that he was rendered semi-paralysed; the right side of his body was immobilized and his speech was slurred. He also could not walk and was wheel-chair bound. Needless to say, his business suffered thereafter less than a year after the stroke. Zainal died aged 49, leaving behind two (2) wives, five (5) daughters and an adopted son, all minors.
The family then realized that Zainal had not planned for them as he had not expected to die soon. He had no taken any insurance nor had he planned for anyone to succeed him in his business. Also his two (2) wives were not getting along well and he had also not provided for any bequest (Wasiyyah) for his adopted son. Coupled with that, his brothers who were heirs to his estate were making inquiries about their share. His company totally collapsed and everything was in shambles.
The above story may look familiar to many of us. Why don’t people do something about it, you may ask. Well, there are a number of reasons. So the question arises as to why Malays (used interchangeably with Muslims) do not plan their estate?
To the Malays, inheritance planning does not seem to be an important issue in their lives. They probably do not understand the inheritance planning principles and strategies and are not aware of the importance of inheritance planning. Many also do not realize the negative repercussions which may arise from not planning one’s estate.
Many times have I asked my friends “Don’t you think you should do inheritance planning for the future well-being of your family?” Their replies would be “It is not a critical matter. As Muslims, our rights for the inheritance have been pre-determined under the Hukum Faraid (the Islamic Law of Inheritance) and therefore, we cannot distribute assets any way we want upon death.” This is generally how most Muslims in this country view inheritance planning.
The Muslims’ misunderstanding of the Hukum Faraid have resulted in many insisting on Faraid distribution as the only recourse. However, if followed there may be too many splits of the shares undivided property, to the extent that all parties will lose out. In fact, if properly understood, the Syariah Law allows for inheritance distribution to be done through consensus as long as everyone agrees and no one is a minor.
Yet another reason would be that, the Malays have always been brought up too courteous and well-mannered. Therefore, seldom do they do anything to expedite the process of distributing the family inheritance. Some say; “Hush, the grave is still fresh, how can you think of gathering the family to discuss the inheritance distribution?” Unfortunately, soon after the burial ceremonies are over, everyone would have returned to their own homes and would once again be caught up in the routine of daily living. In the end, the issue of inheritance remains unresolved and inevitably gets delayed.
When the process for inheritance distribution is finally initiated, the heirs will be faced with the problem of obtaining all the information needed for the distribution of the inheritance, such as information about the property, the heirs and any debts owed by the deceased person. When the deceased person did not leave clear information, sometimes the names of certain heirs may be deleted when it is later determined that they were adopted children. There have also been instances when suddenly non-family members will emerge, claiming to be the heirs. In the end, it turns out that unknowing to the family, the deceased person had been polygamous.
Whatever the reasons, the fact remains that the Muslims do not see inheritance planning as a critical matter. In Malaysia, out of 25.7 million population, about 10.0 millions are Muslims between the age of 20-65. Sad to say, up until 2002, Amanah Raya Berhad has reported that less than 500 Muslims have written Wills.
Planning the inheritance is a noble effort to ensure the smooth administration of property by ensuring assets are unfrozen soonest possible and to ensure that the properties are not split into too many portions, thereby diminishing its potential value. Through inheritance planning, family harmony can be maintained and justice ensured. The beneficiaries will also be protected from being cheated by unscrupulous parties, such as debt collectors and false beneficiaries.
Besides benefiting the waris (heirs) a person who has planned his inheritance has in essence planned for his own salvation in the afterlife. Debts to other people or Allah such as Haj, Zakat etc can be settled by the appointed Executor (Wasi). The role of the Wasi is similar of that of a representative of the deceased person in ensuring that all unfinished matters are settled and completed. Life is only temporary (short or long, it is temporary nonetheless) and no one knows when he or she will be called to face the Creator. As such, it is crucial for us to plan ahead and ensure we do not leave problems behind.
Coming back to Zainal, had he not died prematurely, how could he have planned in such a way as to alleviate the anticipated problems? Amongst the strategies he could have executed were as follows:-
(i) Business Succession Planning.
He could have taken a partner or two who can takeover the business upon his demise and maintain the value of the business. Also, he could execute a buy-sell insurance strategy to ensure an exit strategy had he died unexpectedly.
(ii) Write an Islamic Will (Wisoyah) Document.
The Wisoyah Document is a testamentary document which will enable the application for the Grant of Probate to be made (instead of the Grant of Letters of Administration ) under the Probate and the Administration Act 1959. The essence of the Wisoyah Document is the appointment of the Executor(s) which can be an individual or a Trustee Company who will execute all instructions of the Testator (in this case, Zainal) upon death, for as long as they do not contravene the Syariah Law. In the Wisoyah Document, Zainal can appoint Trustees and Guardians for his children, bearing in mind that all of them are still minors.
(iii) ‘Harta Sepencarian’ (Jointly acquired property) Document.
‘Harta Sepencarian’ is defined as property jointly acquired by the husband and wife during the subsistence of marriage in accordance with the conditions stipulated by Hukum Syarak. In simple language, it means the earnings, or property acquired as a result of the joint labour of two spouses and includes the income derived from the capital which is itself the result of joint labour. Since Zainal is polygamous, it is only fair and proper that he declares and allocates to each spouse by way of a written declaration of this right to ‘harta sepencarian’ which can be used to prove and claim the right.
(iv) Wasiyyah (Islamic Bequest) Document
Since Zainal has an adopted child, he can bequeath up to one-third of his estate to his adopted child. Hence to plan, Zainal must know his net asset value (assets minus liabilities) before he can ascertain the value of the one- third. Anything above the value must be consented by all the heirs, otherwise the ‘extra’ must be refunded or returned to the estate.
(v) Insurance.
To provide for sufficient insurance cover to ensure that the financial needs of the family can be maintained in the event of one’s demise, is an absolute necessity. Zainal should contact a financial planner to have a needs-analysis check-up to ensure sufficient insurance cover for his family and dependants. At the same time, he could have covered himself for the ‘total permanent disability’ insurance in anticipation of situations where he could no longer work.
Maybe if Zainal could ‘come back’, he would have done a lot of things differently. We still have a choice , don’t we? Let’s not waste the opportunity.
One day, he had a fatal stroke and had to undergo immediate surgery. The effect was that he was rendered semi-paralysed; the right side of his body was immobilized and his speech was slurred. He also could not walk and was wheel-chair bound. Needless to say, his business suffered thereafter less than a year after the stroke. Zainal died aged 49, leaving behind two (2) wives, five (5) daughters and an adopted son, all minors.
The family then realized that Zainal had not planned for them as he had not expected to die soon. He had no taken any insurance nor had he planned for anyone to succeed him in his business. Also his two (2) wives were not getting along well and he had also not provided for any bequest (Wasiyyah) for his adopted son. Coupled with that, his brothers who were heirs to his estate were making inquiries about their share. His company totally collapsed and everything was in shambles.
The above story may look familiar to many of us. Why don’t people do something about it, you may ask. Well, there are a number of reasons. So the question arises as to why Malays (used interchangeably with Muslims) do not plan their estate?
To the Malays, inheritance planning does not seem to be an important issue in their lives. They probably do not understand the inheritance planning principles and strategies and are not aware of the importance of inheritance planning. Many also do not realize the negative repercussions which may arise from not planning one’s estate.
Many times have I asked my friends “Don’t you think you should do inheritance planning for the future well-being of your family?” Their replies would be “It is not a critical matter. As Muslims, our rights for the inheritance have been pre-determined under the Hukum Faraid (the Islamic Law of Inheritance) and therefore, we cannot distribute assets any way we want upon death.” This is generally how most Muslims in this country view inheritance planning.
The Muslims’ misunderstanding of the Hukum Faraid have resulted in many insisting on Faraid distribution as the only recourse. However, if followed there may be too many splits of the shares undivided property, to the extent that all parties will lose out. In fact, if properly understood, the Syariah Law allows for inheritance distribution to be done through consensus as long as everyone agrees and no one is a minor.
Yet another reason would be that, the Malays have always been brought up too courteous and well-mannered. Therefore, seldom do they do anything to expedite the process of distributing the family inheritance. Some say; “Hush, the grave is still fresh, how can you think of gathering the family to discuss the inheritance distribution?” Unfortunately, soon after the burial ceremonies are over, everyone would have returned to their own homes and would once again be caught up in the routine of daily living. In the end, the issue of inheritance remains unresolved and inevitably gets delayed.
When the process for inheritance distribution is finally initiated, the heirs will be faced with the problem of obtaining all the information needed for the distribution of the inheritance, such as information about the property, the heirs and any debts owed by the deceased person. When the deceased person did not leave clear information, sometimes the names of certain heirs may be deleted when it is later determined that they were adopted children. There have also been instances when suddenly non-family members will emerge, claiming to be the heirs. In the end, it turns out that unknowing to the family, the deceased person had been polygamous.
Whatever the reasons, the fact remains that the Muslims do not see inheritance planning as a critical matter. In Malaysia, out of 25.7 million population, about 10.0 millions are Muslims between the age of 20-65. Sad to say, up until 2002, Amanah Raya Berhad has reported that less than 500 Muslims have written Wills.
Planning the inheritance is a noble effort to ensure the smooth administration of property by ensuring assets are unfrozen soonest possible and to ensure that the properties are not split into too many portions, thereby diminishing its potential value. Through inheritance planning, family harmony can be maintained and justice ensured. The beneficiaries will also be protected from being cheated by unscrupulous parties, such as debt collectors and false beneficiaries.
Besides benefiting the waris (heirs) a person who has planned his inheritance has in essence planned for his own salvation in the afterlife. Debts to other people or Allah such as Haj, Zakat etc can be settled by the appointed Executor (Wasi). The role of the Wasi is similar of that of a representative of the deceased person in ensuring that all unfinished matters are settled and completed. Life is only temporary (short or long, it is temporary nonetheless) and no one knows when he or she will be called to face the Creator. As such, it is crucial for us to plan ahead and ensure we do not leave problems behind.
Coming back to Zainal, had he not died prematurely, how could he have planned in such a way as to alleviate the anticipated problems? Amongst the strategies he could have executed were as follows:-
(i) Business Succession Planning.
He could have taken a partner or two who can takeover the business upon his demise and maintain the value of the business. Also, he could execute a buy-sell insurance strategy to ensure an exit strategy had he died unexpectedly.
(ii) Write an Islamic Will (Wisoyah) Document.
The Wisoyah Document is a testamentary document which will enable the application for the Grant of Probate to be made (instead of the Grant of Letters of Administration ) under the Probate and the Administration Act 1959. The essence of the Wisoyah Document is the appointment of the Executor(s) which can be an individual or a Trustee Company who will execute all instructions of the Testator (in this case, Zainal) upon death, for as long as they do not contravene the Syariah Law. In the Wisoyah Document, Zainal can appoint Trustees and Guardians for his children, bearing in mind that all of them are still minors.
(iii) ‘Harta Sepencarian’ (Jointly acquired property) Document.
‘Harta Sepencarian’ is defined as property jointly acquired by the husband and wife during the subsistence of marriage in accordance with the conditions stipulated by Hukum Syarak. In simple language, it means the earnings, or property acquired as a result of the joint labour of two spouses and includes the income derived from the capital which is itself the result of joint labour. Since Zainal is polygamous, it is only fair and proper that he declares and allocates to each spouse by way of a written declaration of this right to ‘harta sepencarian’ which can be used to prove and claim the right.
(iv) Wasiyyah (Islamic Bequest) Document
Since Zainal has an adopted child, he can bequeath up to one-third of his estate to his adopted child. Hence to plan, Zainal must know his net asset value (assets minus liabilities) before he can ascertain the value of the one- third. Anything above the value must be consented by all the heirs, otherwise the ‘extra’ must be refunded or returned to the estate.
(v) Insurance.
To provide for sufficient insurance cover to ensure that the financial needs of the family can be maintained in the event of one’s demise, is an absolute necessity. Zainal should contact a financial planner to have a needs-analysis check-up to ensure sufficient insurance cover for his family and dependants. At the same time, he could have covered himself for the ‘total permanent disability’ insurance in anticipation of situations where he could no longer work.
Maybe if Zainal could ‘come back’, he would have done a lot of things differently. We still have a choice , don’t we? Let’s not waste the opportunity.
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