Islamic Estate Planning Attorney
Islamic Inheritance
I will be speaking (dinner is included) tonight at the Islamic Center of San Gabriel Valley. If you have any friends or family interested in the topic, please be sure to send the information their way. If they cannot (or even if they can) have them sign up to my email series and resource guide on the subject.
For an educational workshop in your Masjid, just reach out.
If you are going to map out your family’s financial future, you need to consider the costs of nursing home care seriously. I know what a lot of Muslims think though, both parents and adult children: that would never happen. Children, children-in-law, everyone else, at least in the abstract might be adamant that this would never happen. Unfortunately, it is often unavoidable.
Elyas is a 78-year-old widower in Santa Monica. His children, sons Salman, Younus and daughter Bilquis, are all adults, married and with children of their own ranging in age from 2 to 9 years old, though all of them have toddlers. Salman lives about 40 miles away, while the other children live outside California.
Salman has discovered, after visiting his father, that Elyas has dementia, and it is deteriorating rapidly. He knew that his father was behaving strangely, and wants to help. So Salman brought his father home to live with him in Orange County, California. However, he found this was a problem. His wife tended to toddlers all day; she was not able to meet Elyas’s needs. Elyas did not recognize his daughter in law or grandchildren. Often, when Elyas saw them, he thought they were intruders about to attack him. Salman was too dangerous to have at home. He had no choice but to send his father to a memory care facility.
An elderly adult like Elyas can become too dangerous to keep at home, which is an obvious case for getting help. But often, people prefer to stay in a nursing home to not be a burden to the family. Having a child, a daughter in law or grandchild deal with the day to day drudgery and indignities can be a bit much. There may be a need to administer many medications; there may be incontinence or other issues. Maybe there is a need for in-home care, or outside the home care, but there may be no ready way to pay for that. This is not a remote issue. Someone turning 65 today has an almost 70% chance of needing some sort of long term care in the future.
Nursing homes can be costly. To those with experience, this is probably an understatement. Memory care, in particular, can be a six-figure annual outlay. Someone like Salman, or even all the siblings combined, may not have the financial capacity to cover these costs. Families are often looking for another option to pay for nursing home care.
Long term healthcare insurance is a good option, but it can be expensive or impossible to get. Regular health insurance would never pay for nursing homes or other sorts of long term healthcare. Most people do not have long term healthcare insurance or an easy way to pay for long term costs themselves. If they did, it may mean dipping into expenses like their own housing and education needs.
So this is something I don’t do a lot when I write here: I am limiting my discussion of this important topic that should be of interest to virtually every family in the United States to California law. The reason for this is that Medi-Cal (or Medicaid in most of the rest of the United States) is a state-specific program and if you are outside California, the information (as opposed to the issues) may not apply to your family at all.
We know of Medi-Cal as insurance for the poor. After Obamacare passed, there was a massive expansion in the program. The government, in general, does not look at assets, but income.
Medi-Cal is also not just ordinary insurance. It covers things virtually no other health insurance program, including Medicare (which is healthcare or seniors), does not include- long term care. It is common for seniors to have both Medi-Cal and Medicaid at the same time. So someone like Elyas, even if he owns a home, might be eligible for it. So long as Elyas qualifies for Medi-Cal, his children do not need to worry about paying for his nursing home. Elyas does not need to sell his house or get a home equity loan to pay for long term care.
Medi-Cal eligibility used to be a massive project for many. The elderly purposefully impoverished themselves to qualify for the program, leaving themselves in a state of poverty. They did this to be eligible for healthcare for the poor so they can get long-term healthcare.
In general, though, a lot of what people used to do to get qualified for Medi-Cal is no longer needed. You can get Medi-Cal if you at 138% of the federal poverty level or if you meet a variety of other situations. Being over 65 is one of them. It is very common for people with million dollar homes to get Medi-Cal. It is an essential social safety net that allows people to keep their homes while undergoing a massive necessary expense.
There is one massive caveat about Medi-Cal though: The government is obligated to recover what it spent on medical care from the assets of the deceased. So after Elyas dies, say he owned a home in Santa Monica, California, the government may be entitled to “recover” from what amounts to Elyas’s children’s inheritance.
While Elyas is alive, the government does not “take away” his home. They also don’t place a lien on the house. They do have a statutory right of recovery though. The family must notify the government when Elyas dies. However, the government’s power to recover comes with some significant limitations.
For those who die after January 1, 2017, the rules regarding Medi-Cal recovery have become much more favorable for families. The older rules are different and outside the scope of this article.
Medi-Cal does not try to recover for “ordinary” medical care anymore. So just because a loved one had Medi-Cal does not mean the government will start collections after death. The state will recover only for services that federal law requires be recovered (Medi-Cal is a joint Federal/State Program).
So nursing home care, intermediate care for the developmentally disabled, home and community-based services and a few other programs are subject to asset recovery (here is a complete list) is subject to asset recovery. So some of the most expensive items can subject a family to the loss of the family home. But California now makes this all avoidable. Unlike in the past, it does not require people to impoverish themselves and give everything away for the privilege of having the government pay for a nursing home.
California defines the term “estate” narrowly, as essentially the probate estate. Probate is a court-supervised process for making distributions of a decedent’s estate. As a general rule, if you need a dead person’s signature to transfer something from one person to another, you have probate.
There are however ways of transferring property outside of probate. While some of them may be problematic for Muslims (and non-Muslims), having property in a living trust is likely the best way to do it. Assets that are in retirement plans, like 401(k)s, are not going to be subject to recovery assuming there was a beneficiary designation that avoided probate and did not give away everything to the government (some people do this).
If you are thinking about long term care and how it might impoverish your family’s wealth, you should consider revisiting estate planning. Of course, you need to plan for Islamic Inheritance. But for this to work, there needs to be something to inherit.
To set up an Islamic Estate Planning appointment with our office, you can click on this calendar link.
I have a new comprehensive article up on my website now on what an Islamic Living Trust has and why it is essential. It occurred to me with all the content I have written about Islamic Inheritance and Islamic Estate Planning. I have never done this particular article before or sent out an email about it. Please check it out and let me know if you have any comments.
You an also share it with any friends who may want Islamic Estate Planning for their own family.
Note: My post last time around had an error, where both parents had boy names. That was not intended. Anyway, I changed that. If you are interested in my article about problem children, check it out.
Have a wonderful weekend!
Salman is a good boy. At least as far as adult children who are 43, with no job, wife, and prospects for any of these things go. His father, Bilal, loves him of course. He hopes for the best for him. Bilal has been retired for a few years now and is in his 70s. The parents tried to help out as much as they can, but Salman always had a knack for getting into hair-brained business deals with dodgy “friends,” borrowing cash from his parents, and losing it all.
Salman has been to jail a few times, nothing too big, but things related to drug distribution, an unfortunate bar fight and just being in the wrong place at the wrong time. Of course, this disturbed his parents, but that was when he was in his 20s and 30s. Today, things are different. As the Bilal gets older (and Salman with them), he coming to rely on his son more. Salman starts to berate Bilal more, about things like not understanding technology. He wants to handle their banking and finances, but Bilal is reluctant. He is also kind of trapped.
Salman is Bilal’s son, their heir. In their old age, they may come to rely on him more and more. But by doing so, they may subject themselves to poverty in their old age, since Salman has never demonstrated any level of responsibility. Salman is many parent’s disappointment.
For many parents of adult children, the challenges can come in many forms. Remember, the Quran tells us that children and wealth are fitna. Things have always been this way.
These problems are vastly different from each other. So if you started reading this article thinking I am pushing one solution that solves every issue, I am sorry to disappoint. For Muslims though, there are underlying principles that will guide every single resolution. Those principles will, however, will not steer you to the exact solution. They may tell you what the wrong choices are, but you have to dig deeper to get to the right answer. When you a bad situation in your family you need to suppress your desires and ensure that your actions are in keeping with your values and not merely your whims.
You don’t see yourself as the villain in your own story, and likely your child does not see themselves that way either. The parent has significant power to make things far worse than they already are.
Faisal has a son, Khalid, who is now 31 years old. Khalid has not spoken to Faisal in about seven years. Faisal has recently heard from friends that Khalid has been posting pictures of himself with various non-Muslim women in suggestive poses, often with what looks like alcohol. He wants to reach out to his son Khalid and ask him, point blank, “are you still a Muslim”? Faisal should not ask this question. Of course, if the situation between father and son is bad enough, Khalid may well say “no” just to be left alone. For Faisal, the question may be engineered to get a particular response, which would be justification for disinheriting Khalid, since non-Muslims do not have the right to inheritance in Islam.
While the result, disinheriting a son, maybe what Faisal wants, there is no doubt here that by asking the question, he has made things with his son worse.
When you have family problems, keeping with the Islamic Rules of Inheritance can be challenging. It is easy to think to yourself, “why should I,” or “it’s my money” or “my son does not deserve anything. Be careful here. You may be standing in a pool of your vanity. The point of the Islamic rules of inheritance is that this is not about what you want or don’t want. If you are a believing Muslim, you accept the shares of succession as they are is what Allah has ordained.
So you start from the premise that, unless the problem is that this person has left Islam, they will get their rights to inheritance. Otherwise, your defining act after you are gone is willful disobedience to what the Quran requires. If you are not a believing Muslim, this is not a problem. If you are, it’s a problem.
Depending on the particular family problem, you need to make sure your solution (1) does not violate the Islamic Rules of inheritance, (2) does exacerbate an already bad situation, and (3) it does not unduly frustrate people’s rights.
When you design a plan, we look to a solution for a problem the beneficiary either has or may have. What we don’t do, in general, is solve a problem for the person who is going to be dead when survivors implement this plan. Any planning consistent with Islam cannot be to massage a future dead person’s vanity.
The central part of my job as an Attorney is to be counsel. When it comes to Islamic Estate Planning, my goal is not just to administer whatever desires a client has- use estate planning documents as a way to punish “bad” children and “reward” good children. We do not use “dead hand control” for its own sake (though, so some degree, we may use some level of dead hand control when appropriate).
It is difficult to discuss solutions to problems that may be abstract. As it happens though, I have been writing about a wide range of challenges that Muslim families have in their estate planning for a few years now, and have practiced Estate Planning for many more than that. So I have a few ideas here when it comes to adult children.
My main advice on this score is don’t ever co-own a home you live in with your children. My answer would be the same even if your child contributed to the house in some way. You can compensate them through a note or some other way. Owning a home with your children tends to cause more problems than they solve. I wrote an article on this you can read here.
I wrote about adopted children in Islam recently. There are particular challenges and rules associated with adopted children, who are NOT entitled to inherit in Islam. You can see my article on adoption here.
The family home is a significant issue that I am not exactly sure I have done justice to in writing about yet. It comes up in the Islamic Estate Planning book I co-authored and have written about it here as well. But the idea is that people want the surviving spouse to live in the family home. The family home is also most of the family’s wealth much of the time. Overpriced housing is mainly in coastal areas, but families everywhere deal with this. So the question is, how do you do it while also making sure you are not doing an injustice to your children? Also, how do you do it when the surviving spouse is not the children’s parent? You may not be able to do it justly, but it depends. Check out the article here.
I have written extensively about problems that come up with guardianship for minor children. Sometimes, adult children might be guardians for minor children. Sometimes they are not suitable for this role. To read more about that, click here.
There is far more to write about here (and I hope to). But thinking through how you might protect your children and even yourself in the event of a lawsuit is one thing we routinely do in trusts. I wrote about this previously and if you are interested, take a look.
Drafting to protect children from themselves is something I do a whole lot of- and it is tricky because Muslims have a right to inheritance. Issues can include things like special needs, substance abuse issues and a whole host of other reasons why just forking over cash to a child might be a bad idea. I have an article on protecting children from “fast money”– but hope to add to this in the future.
If you have any questions or comments about the article or if I can be of help, please let me know.
I have a new article published at Islamic Horizons (PDF) on Islamic Inheritance and Islamophobia from a bad result in Greece. In the article, I describe some of the pitfalls that come with the desire for making sure your values are kept intact (following the Sharia when it comes to Islamic Inheritance) in Europe as well as the United States.
When you do it wrong (or don’t do it at all), don’t blame Islamophobia. Courts in non-Muslim countries are not arbiters of the Sharia. Don’t expect them to be. Unfortunately, one myth among Muslims is that a Judge will follow your wishes. They often will not.
The system we have in the United States is both bad and good. Good because we can follow Islamic Inheritance if we want to and we can do it right. It is bad because we might not. Islamophobia may well be a big problem, but it is mostly irrelevant when it comes to you being able to worship. Islamic Inheritance is nothing if not worship. You are putting your vanity aside to do what Allah has commanded, even if that is not the way you would have done it.
Please feel free to read and share the article. If you like the publication, you can get it in the mail with an ISNA membership.
For those of you who may have missed it, I co-authored a book on Islamic Inheritance (it is for lawyers but anyone can buy it and read it). You can get it here.