Planning an Islamic estate is a religious obligation rather than merely a financial one. Islam views prudent wealth management and proper posthumous distribution as a sign of adherence to divine law and empathy for ones family and community. According to Sahih al-Bukhari the Prophet Muhammad (ﷺ) stated:
“It is the duty of a Muslim who has anything to bequeath not to let two nights pass without writing a will about it” (Sahih al-Bukhari).
Islam views estate planning as a responsibility that should not be put off demonstrating how seriously it takes the issue.
What Islamic Estate Planning Is
The process of arranging ones wealth distribution in conformity with Sharia (Islamic law) is known as Islamic estate planning. In contrast to secular wills which grant total discretion over who gets what Islamic inheritance law establishes a precise and set framework for allocating wealth. The Quran and Sunnah both clearly state these laws which are not negotiable. In this context estate planning serves as a way to uphold Gods commands while averting disagreements and adversity among heirs.
Also read: Islamic Inheritance Planning Principles and Strategies
Key Components of Islamic Estate Planning
Faraid (Fixed Shares)
The foundation of Islamic inheritance is the concept of faraid—the fixed shares of inheritance assigned to specific family members, such as spouses, children, and parents. These shares are clearly detailed in the Quran. For example, Allah ﷻ says: “Allah commands you regarding your children: the share of the male will be twice that of the female…” (Surah An-Nisa, 4:11). These rules ensure a just and balanced division of wealth according to divine wisdom.
Wasiyyah (Islamic Will)
A wasiyyah is an Islamic will that allows a Muslim to distribute up to one-third of their estate to people who are not entitled to the fixed shares under faraid. This could include friends, adopted children, or charitable causes. This portion offers some flexibility within the otherwise structured inheritance rules and is a way to express personal intentions in a religiously permissible manner.
Hibah (Lifetime Gifts)
Hibah refers to gifts given during a person’s lifetime. Unlike inheritance, hibah can be made to anyone and is not bound by the faraid rules. It’s often used for wealth transfer during one’s lifetime to help loved ones, especially when there is a need or to avoid later disputes. However, for hibah to be valid, it must be made voluntarily, accepted by the recipient, and documented properly.
Waqf (Charitable Endowment)
Waqf is the act of permanently dedicating an asset—like property or money—for the benefit of the community. Once a waqf is established, the asset cannot be sold or inherited, and its use must continue serving the intended purpose. Waqf is considered a form of sadaqah jariyah (ongoing charity), providing continuous rewards even after the person’s death.
Also read: 7 Principles of Transparency for Islamic Family Financial Planning
Islamic Estate Planning: A Guide
Listing all of your assets including real estate, savings, investments and personal possessions is the first stage in Islamic estate planning. Before any distribution can occur all debts and financial commitments must be paid off. Islam places a strong emphasis on repaying debts as a necessary component of carrying out ones duties. If you want to make a wasiyyah then make sure that up to one-third of your estate is allocated to people or causes that aren’t covered by faraid. The legitimate heirs will then receive the remaining estate in accordance with the Quranic shares.
Appointing a trustworthy executor (wasi) to carry out your instructions and thoroughly documenting everything are essential. You should designate a guardian who will raise your minor children in accordance with Islamic principles. Whether to create a waqf or make any hibah gifts during their lifetime is another matter that Muslims should think about. These can be heartfelt methods to help loved ones or support long-term worthy causes.
It is highly advised to consult with experts in both Sharia and local law. Your plan must adhere to Islamic principles while being legally enforceable in your jurisdiction as estate planning laws vary by nation.
Also read: Creating a Waqf: Essential Conditions You Need to Know
Why It Matters
To prevent family strife, safeguard wealth, satisfy religious commitments and preserve peace of mind, proper estate planning is crucial. A Muslim can make sure that their wealth will be a source of blessings rather than hardships after they pass away by making clear and early plans. More significantly it is an act of faith reaffirming a belief in community justice and accountability.
In Conclusion
Islamic estate planning is a spiritual obligation as well as a legal and financial one. It enables a Muslim to support their family manage their wealth in accordance with divine guidance and give back to the community. This process can contribute to a lasting legacy of justice, compassion and obedience to Allah ﷻ if the proper procedures are followed with sincere intentions.
Also read: How to Manage Personal Finances of the Prophet Muhammad’s Companions
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References
Amana Law. (n.d.). Islamic faith-based estate planning: A comprehensive guide. Retrieved from https://amanalaw.com/islamic-faith-based-estate-planning-guide/
Islamic Inheritance. (n.d.). Islamic estate planning guide. Retrieved from https://islamicinheritance.com/education/islamic-estate-planning-guide/
MahWengKwai & Associates. (n.d.). Syariah estate planning. Retrieved from https://mahwengkwai.com/syariah-estate-planning/
Rockwills. (n.d.). Islamic estate planning. Retrieved from https://rockwills2u.com.my/islamic-estate-planning/
Syariah Lawyers SG. (n.d.). Muslim estate planning. Retrieved from https://syariahlawyersg.com/muslim-estate-planning/
Salaam Gateway. (n.d.). A modern Muslim’s guide to estate planning. Retrieved from https://salaamgateway.com/story/a-modern-muslims-guide-to-estate-planning