Wakaf

To Muslims, estate planning is not just to provide financial assistance to their loved ones, but to also gain merits in the eyes of the Almighty. One of the ways in which Islam encourages the act of charity, is to dispose of property by way of wakaf.

The first question to ask is, what constitutes a wakaf? Four elements must be met before a wakaf can be created.

• Founder (wakaf) - He or she must be the legal and beneficial owner of the property which is to be utilised as wakaf. He must be above 18 years of age and of sound mind. The declaration to wakaf the property must also be done voluntarily and without coercion.
  

• Party who creates the wakaf (beneficiary) or object (mawquf alaih) - The beneficiary can be virtually anybody or any legal entity that has the capability to own property, be it moveable or immoveable . Thus, a wakaf can be created in favour of family members, the orphanage, foundations, charitable organisations, the Muslim ummah in general, or even non-Muslims as long as it is not against the syariah.
  

• Mawquf - The subject matter of a wakaf can be anything that can exist in perpetuity. This can be land, money, shares, bonds and so forth. By that same reasoning, anything that is considered perishable, such as food, cannot be dedicated for the purpose of creating a wakaf.
  

• Sighah - It can be either direct or indirect. A direct sighah is where a person donates his land to a particular person. An indirect declaration could be: "I donate my property to the poor, whereby this property cannot be sold, given away as a gift (hibah) or be the subject matter of inheritance".

To complete the understanding, we now look at the characteristics of a wakaf:

• Wakaf property cannot be sold, given away as a give (hibah) or be the subject of inheritance.
• Under strict conditions, property that has been designated as wakaf property by the founder can be substituted for another property of similar or higher value.
• A wakaf takes effect immediately after declaration unless the time for commencement is specifically stated, for example, "at the time of my death'.
  

Every Muslim has to bear in mind that in sofar as Islam is concerned, the purpose of estate planning is not merely to provide financial assistance to the loved ones but to also gain merits in the hereafter.

Source: SmartInvestor, April 2006, Wakaf by Jasmin Jamaludin of As-Salihin Trustee Berhad

Living Trust

A trust is always deemed sacred and something which should not be treated lightly. Its fulfillment is not an act for wanton human recognition but for worship in its purest form. Thus, taking care of your family is a trust. Seeking knowledge is a trust. As the Quran in Surah Al-Nisa verse 58 puts it:

"Allah does command you to render back you trusts to those to whom they are due and when you judge between man and man that you judge with justice. Verily, how excellent is the teaching which He (Allah) gives you. For Allah is He who hears and sees all things."

In legal parlance, a trust is a legal obligation that comes into existence when an individual or other legal entity (The settlor) transfers the legal ownership of his assets to another person or persons (The Trustee) to hold not for their benefit but for the benefit of the beneficiaries who can be individuals or otherwise. The Trustees become the legal owners of trust assets once the assets are transfered to them.

The clear benefits of Living Trusts are many:

• They are not governed by the laws of Faraid;
• They can be enjoyed immediately;
• They are not liable for the deceased's debts;
• They are not restricted to the one third rule as per any testamentary bequest.

To avoid such a complication, Trustees should be chosen from amongst a number of trust corporations. They can exist in perpetuity and are controlled by stringent statutory rules (such as those contained in the Trustee Act 1949 and the Trust Companies Act 1949).

All assets, moveable or otherwise, are technically frozen once a person is deceased. Each and every Muslim would have to weigh the best mode on how to manage his assets but manage he must, for truly whatever has been endowed upon us is indeed a gift entrusted by Allah.

Source: SmartInvestor, February 2006, by Jasmin Jamaludin of As-Salihin Trustee Berhad

Be Humble

Be humble, the stock market is probably smarter than you.

Overconfidence might help secure a job promotion or the attention of another at a nightclub,

but in the stock market, it can be disastrous.

When considering investment decision, think about the other millions of other investors out there and ask

yourself do I really have an edge?

Interesting thought...

Harta Sepencarian

Harta sepencarian is a derivative of Malay custom, conceptualized long before independence. Only properties acquired during the subsistence of a valid marriage shall fall within the ambit of harta sepencarian. Gifts and properties received through the mechanics of inheritance and EPF contributions are outside the scope.

If a Muslim man decides to take on an additional wife and such polygamous endeavour is accepted by the Syariah court, any party to the existing marriage can make an application to:

a) to require a person to pay maintenance to his existing wife or wives ; OR;
b) to order the division between the parties of the marriage of any assets acquired by them during the marriage by their joint effort.

A possible protection is a harta Sepencarian Declaration. It is a mutual declaration by the husband and his wife at itemising what each party can claim as jointly acquired property. It avoids ambiguity and gives a level of certainty and security. Ascertaining and contesting harta sepencarian at the material time can be extremely acrimonious.

Whatever the recourse one takes to protect oneself, take heed that no amount of protection can ever substitute the protection Allah gives His creation.

Source : SmartInvestor Magazine, March 2006, by Jasmin Jamaluddin of As-Salihin Trustee Bhd

Wasiat...Must We Have One?

وَلْيَخْشَ الَّذِينَ لَوْ تَرَكُواْ مِنْ خَلْفِهِمْ ذُرِّيَّةً ضِعَافًا خَافُواْ عَلَيْهِمْ فَلْيَتَّقُوا اللّهَ وَلْيَقُولُواْ قَوْلاً سَدِي

Let those (disposing of an estate) have the same fear in their minds as they would have for their own if they had left a helpless family behind: Let them fear God, and speak words of appropriate (comfort).

Dan hendaklah takut kepada Allah orang-orang yang seandainya meninggalkan dibelakang mereka anak-anak yang lemah, yang mereka khawatir terhadap (kesejahteraan) mereka. Oleh sebab itu hendaklah mereka bertakwa kepada Allah dan hendaklah mereka mengucapkan perkataan yang benar.

Surah An Nisaa' [ 4.9 ]