RM66b in frozen assets, Muslims advised to prepare ‘wasiat’ early

As-Salihin is a trustee company in Malaysia that focuses on Islamic Estate Planning. — Picture via as-salihin.com
As-Salihin is a trustee company in Malaysia that focuses on Islamic Estate Planning. — Picture via as-salihin.com

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KUALA LUMPUR, Aug 21 — Death is the only certainty of life. Thus for Muslims, it is important to prepare their ‘wasiat’ as early as possible.

A wasiat is a declaration made by a person during his lifetime with respect to his property or benefit thereof, to be carried out for purposes permissible by Islamic law.

“Do not leave this world without a will. If we do not settle our debts with people, even martyrs will not be granted forgiveness (by God),” said the President and CEO of As-Salihin Trustee Bhd, Abdul Aziz Peru Mohamed during an interview with Bernama recently.

He said that when his father died, he had asked those attending the funeral to come and see him if his father had owed them money.

“We do not know when we will go, but we most certainly will. Wasiat makes it easier on our kids, spouse and parents as our wealth and assets would be frozen when we die. It is important that we settle the debts of the dead before sorting out matters for the living,” he said during an interview at his office in Kelana Jaya.

Wasiat

Established in 2004, As-Salihin is the first trustee company in Malaysia that focuses in Islamic Estate Planning.

The following is the transcription of the Bernama interview with Abdul Aziz, who has been heading as-Salihin since 2005.

QUESTION: What is meant by a wasiat?

ABDUL AZIZ: Wasiat is a person’s instructions before they die. Wasiat will not necessarily trump faraid (the Islamic law that pertains to the division of inheritance). Faraid deals with heirs while wasiat allows 1/3 of the estate to be given to non-heirs after all debts of deceased have been settled. The remaining 2/3 will be divided among faraid heirs.

Wasiat gives the opportunity to the testator (the person who made the will) to give away part of his estate to charities and non-Muslim parents. That is his right of which we will honour.

As-Salihin as a trustee and custodian of wills will manage the will accordingly. We specialise in claims by the children and settling the debts of the testator.

QUESTION: Should spouses make separate wasiat?

ABDUL AZIZ: Yes, because their belongings are separate. The faraid law, however, still needs observed. Fights over inheritance occur due to lack of understanding of the faraid law. With a wasiat, we can state that the inheritance is divided equally among the children. If our children are agreeable to the settlement, then there is no problem. However, if they are not agreeable to it, we have to refer to the faraid law. This is what many do not understand.

HIBAH QUESTION: What is meant by hibah?

ABDUL AZIZ: Hibah is a gift of asset to a beneficiary/heir on the basis of love and humanity and is given unconditionally. A person can give to whomever he wishes, particularly his daughters.

If he wishes to give more to his daughters, he can make hibah through a trust deed. Even if the house is in the testator’s name, he can give to the right to the property to his daughter and assign himself as the trustee.

As-Salihin will take over the property with the power of attorney and transfer it to the child (upon death or disability of the testator). As the property is now no longer part of the estate, it is also no longer subjected to the faraid law. Many people have done for their daughters, particularly those who are taking care of their parents.

However, a testator cannot make hibah with an asset that he has not finished paying for. For example, a house that is still under a bank loan cannot be given to another as hibah.

A person can also obtain a takaful (a type of Islamic insurance) as hibah for anyone they will. If their children are still young, they can make a takaful trust for their children’s education, marriage or for their wife. This type of hibah is also not subjected to faraid.

Another example is that if someone wanted to give 50 percent of their estate to their wife, there needs to be an agreement letter between the husband and wife called the Declaration of Jointly Acquired Asset.

Misconceptions about wasiat

QUESTION: What are the usual misconceptions that Muslims have about making wasiat?

ABDUL AZIZ: The most common misconception is that people assume that it supersedes faraid. Wasiat is a will made according to Islamic law. If all parties agree to it, then we can follow the will, but we cannot run away from faraid law.

We can change the wasiat at any time but the court only acknowledges the last one made. After ascertaining the assets and debts of the deceased, the court will grant the letter of authority to As-Salihin to manage the assets and debts. It is only after that that the banks and relevant authorities can liquidate the assets of the deceased. After the process is done and debts are paid, the money will be released for distribution.

Without a wasiat, the family would have to gather together and appoint an administrator to take over the whole process, and often this can be difficult process as it would require everyone to be in agreement. There are cases when the appointed administrator refuses to release the inheritance too, so it is imperative that a person makes his wasiat as soon as he can to avoid all these potential issues.

QUESTION: What if the beneficiaries cannot come to an agreement in the way the estate is to be divided and are contesting the documents in the wasiat?

ABDUL AZIZ: If they disagree, then we will resort to faraid.

What is important is the appointment of the administrator.

All beneficiaries must sit together and come to an agreement, and this is when it is important to already have an appointed executor or administrator. Failure to come to an agreement and family disputes are the main reasons that the assets of the deceased remain frozen. That is why there is there are currently RM66 billion in frozen assets.

Managing the assets

QUESTION: How long does it take to settle the issues related to the estate of the disease and when will the beneficiaries receive the liquidated assets?

ABDUL AZIZ: Upon death, we will wait up to three days for the family to assemble so that we can read out the wasiat to them. As-Salihin would then ask for the details of the deceased from the family, including the death certificate and information on assets and liabilities, if there are any.

We would then submit an application to the court for the letter of authority. This may take time, maybe two to three months, especially if the family keeps stalling. Once we receive the letter of authority and there are no issues from among the family of the deceased, we would send the certified true copy documents to the banks, statutory bodies and other relevant bodies.

After all debts and taxes are paid, we would transfer the money into the account of the deceased. Individuals who wish to claim their debt repayment from the deceased would need to furnish us with the proof of debt. We would inform creditors about it by advertising in the newspapers for two months.

After the debts are paid, we would then divide what is left among the beneficiaries. For houses belonging to the deceased, it would take around a year before it can be transferred. As-Salihin would do it via our panel of lawyers.

As-Salihin was established in 2004 to meet the need of the Muslims in Malaysia to preserve, protect and distribute their hard-earned assets for the benefit of their loved ones upon their departure. It is the first trustee company in Malaysia which focus in Islamic Estate Planning.

— Bernama

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