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