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 ]

Winding Up a Muslim Estate

We provided a general perspective on the need for IEP and covered areas of living trust, wasiat, harta sepencarian, wakaf, executorship and estate administration. However, such explanations only go so far as to provide Muslims with possible alternatives to faraid for consideration. They do not address the practical aspects taht go into winding up a Muslim estate, whether they embrace the alternatives discussed or not.

In relation to winding up estate, lawyers or trust companies for that matter, are merely facilitators. Lawyers or trust companies can only act on information and supporting documents furnished to them. Following is a common but non-exhaustive documents that are required for winding up a deceased 's estate:

• Original and extract death certificates of the deceased;
• The extract is submitted to the relevantMahkamah Syariah to apply for a Sijil Faraid;
• Information on the deceased's parents and grandparents must be ascertained with death certificates;
• List of surviving heirs, copies of their Identity Cards or birth certificates;
• Copy of deceased's Marriage Certificate, if applicable;
• List of assets,with copies of evidence over same such as land titles, bank account book;
• List of liabilities with copies of evidence over same, if any;
• valuation report on all immovable properties belonging to the deceased;
• Wasiat or trust deed executed by the deceased.
  

It is equally important for us to prepare and organise worldly affairs so that when death occurs, our surviving heirs are not burdened or overwhelmed.

Source: SmartInvestor Magazine, August 2006 by Jasmin Jamaluddin of AsSalihin Trustee Bhd