Human survival is closely linked to the cycle involving wealth. People earn money to ensure a smooth life through daily wages, monthly salaries, commissions, and the like. The pursuit or generation of income is usually accompanied by the purchase of goods or assets, such as residential houses, premises, specific machinery, and vehicles, to further enhance one’s quality of life.
The purchase of goods or assets indirectly constitutes the accumulation of wealth by the owner. At the next stage, an individual may make savings or deposits to be used in emergencies or during old age. This situation is a common occurrence in human life, although it does not deny the existence of those who are less fortunate due to factors such as illness and disability, which reduce one’s capabilities. There are also individuals (and their families) whose needs exceed their income. Additionally, a habit of extravagance and a lack of awareness about the benefits of saving can cause one to fail to build savings, even if one has a comfortable regular income.
In this regard, it is indeed fortunate for individuals who own assets to have the awareness to plan and manage their wealth during their lifetime. Asset owners need to acquire relevant knowledge to ensure that estate planning and management are carried out effectively. Estate planning involves determining how an individual’s assets will be preserved, managed and distributed to their family after death. Among the essential aspects that asset owners need to understand are the Islamic values in wealth management, the diversity of family structures, and the importance of identifying information about heirs or family members. This is because some families are based on lineage relationships, while others do not use lineage as their foundation.
In this context, estate planning and management are not merely about transferring or passing ownership from the asset owner to new recipients using instruments such as hibah (gifts), will and waqf (endowments). Instead, it should begin with knowledge and understanding of matters related to the wealth itself. ‘Wealth’ is not limited to valuable items or high-value assets; rather, it refers to anything that can benefit people. This highlights how Islam is a meticulous religion that urges every Muslim to pay attention to every possession they own.
Furthermore, no one knows when their date of death will be or when they will return to the realm of Barzakh (the afterlife). We also cannot predict events that may diminish our abilities as individuals with healthy bodies, including aspects of mental health and soundness of mind. The Messenger of Allah (peace be upon him) said, which means:
“Take advantage of five things before five others; your youth before your old age; your health before your sickness; your wealth before your poverty; your leisure time before your busyness; and your life before your death.”
Therefore, every asset owner can begin planning their asset so that the transfer of their possessions to heirs, relatives, or other parties can be executed after their death, using instruments such as conditional gifts or wills. Such actions are more efficient and yield better results, helping to avoid various complications if the asset is not managed and planned for until the death of the asset owner.
The first step that asset owners need to take is to list the assets they own. Then, they should screen the assets according to the responsibilities that need to be fulfilled; providing support to the rightful heirs; ongoing transactions; or trust holdings (if the individual is a trustee for certain assets).
Estate planning and management can be carried out according to the wishes, desires, or requests of an individual based on the instruments available in Islamic law. Furthermore, the distribution can be done according to legal procedures and the preparation of documentation to prevent any disputes from arising in the future. Completed documents should be accessible to the recipients or interested parties to ensure that the distribution process can proceed smoothly. The asset planning process will be completed once all these steps are taken.
Documentation must be prepared with caution. Although documentation can be prepared independently, seeking advice from qualified and professional parties is the safest course of action. There have been situations where a will document was prepared for an asset owner by mixing elements of a gift instrument with a will. As a result, the distribution of the assets as intended by the asset owner could not be carried out upon his death because the document did not comply with Islamic law and could not be validated. The best documentation is one that has the endorsement of an authoritative body, such as the Shariah court.
In conclusion, wealth is a gift from Allah SWT to humans as a trust that will be held accountable in the Hereafter. The wealth one possesses should be utilised in ways permitted by Islamic law. In addition to benefiting from the wealth in accordance with Islamic law, it becomes more perfect when it is managed and planned wisely. As enjoined by the Messenger of Allah, who stated, “A Muslim should not have anything that can be bequeathed for two nights without having his will written down beside him.” (Reported by al-Bukhari and Muslim).
Co-author :
Siti Shamsiah binti Md Supi, Senior Research Officer &
Nur Shakirah binti Mohamed Yasin, Research Assistant
Centre for Shariah, Law and Politics, IKIM