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