Blog

Muslim Guide to Adoption

February 15, 2019 By ahmed shaikh

Muslim Guide to Adoption

Many Muslim families have opted for the adoption of children. There is also, for historical and Islamic law reasons, some angst about the subject.

Adoption though has a special status in Islam. While in the days before the Prophethood of Muhammad (SWS) and during the earlier years of Prophethood, the concept of adoption was similar to how it is in the United States today. It is just another way of having children. Children come into your family, become your own, either through birth, or adoption.

Similar though is not identical. So there may be other rules and norms that existed in pre-Islamic times surrounding adoption that does not apply when it comes to adoption in California or other parts of the United States.

Purposes of Adoption in the US

Your children inherit from you. Adopted children similarly inherit by default. You need to actively exclude them from your estate planning documents for it not to be so. For purposes of state intestacy law (what happens when you do not have a will), adopted children and biological children are the same. They are also treated the same for other purposes in various statues. So, for example, next of kin can be an adopted child.

People have used adoption for many purposes, some of them shady. Adult adoptions are a relatively common device. You can adopt someone older than yourself as your “child.” There may be sentimental reasons to do this. A common form of adult adoption is when an adult adopted by a step-parent during adulthood. In many cases, adoption can be less innocent. Adoption can be part of an elder abuse scheme.

How Adoption is not the same as biological children

A corporation is a person under the law. Under the law, that is understood to be a legal fiction. A corporation can sue people, and people can sue them. A corporation cannot vote for the mayor. It has no right to public school education; it cannot marry, have biological children or adopt children.

Similarly adopted children are “children” of the adoptive parents. That means a whole lot. They inherit from parents, biologically unrelated “siblings” can inherit from one another in some circumstances under state intestacy law and so forth. They can be next of kin for things like medical decisions. But the law will only take this fiction so far.

Example:

Rania and Faisal adopted Hafsa and Elyas. Both Hafsa and Elyas have separate birth parents, but their adoptive relationship makes them “siblings.” As they grow up, they become very close. They marry each other.
This relationship is not incest, at least not in California. They are not blood relatives. If Hafsa and Elyas were actual biological siblings, they could be guilty of a felony. Under both California law and in the Sharia, their marital relationship is entirely legitimate.

The law structures adoptions to allow for a family relationship, but not place all restrictions that might otherwise exist if the relationship were biological rather than merely a legal fiction.

Severing Ties

This notion of allowing for family relationships has another real consequence; Severing family ties, both physically and legally.

Example:

Tayyib and Aishah have a child, Sameena. When Sameena is 4, Tayyib and Aishah have a painful divorce. Aishah takes full custody of Sameena and visitation to Tayyib is severely limited. Sameena keeps her distance from her father as she grows up since she does not want to offend her mother, who has since married Abdullah. Besides, Sameena has a great relationship with Abdullah, who she calls “Baba.” At 16, she asks to be adopted by Abdullah, which makes him happy. Abdullah has no other children of his own. Abdullah divorces Aishah the next year, but still has a great relationship with Sameena.

When Sameena turns 18, she starts talking to and occasionally visiting her biological father Tayyib, his new wife, Bilquis and her four brothers and sisters. Tayyib and Abdullah both die before Sameena’s 19th birthday. Neither of them leaves a will or a living trust.

Sameena is now a legal stranger to Tayyib. She will not inherit anything from him under California’s intestacy statute. His other children will take what should have been her share in Islam.

Sameena will inherit from Abdullah. She will get his entire estate even if Abdullah has parents or other close biological relatives who would be his heirs in Islam.

What happens here is entirely legal, yet depending on your perspective, somewhat absurd. Why are we legally severing a biological relationship? Why do we deny actual biological family member their inheritance in Islam? Because you cannot be of two different families. The law can replace reality.

Origin of the Adoption “Prohibition” in Islam

Many Muslims know the story, but I will say it anyway. There is a lot more here, but Zayd (RA) was Muhammad (SWS)’s adopted son. Adoption was not a formal process like it is today. But this relationship was understood. Zayd (RA), by all accounts, had a difficult marriage with Zaynab bint Jahsh (RA). They divorced.

Allah revealed verses in the Quran about adoptions.

The Quran recognized this was a fiction. Calling someone your son does not make someone your son. You may feel real parental love for your “son,” or you throw that term around when you are explaining things to young people, it’s still not an actual thing. It’s just something you say with your mouths, as pointed out in the Quran. Muhammad (SWS) could marry Zaynab bint Jahsh despite whatever prohibition existed during that place and time. It does not make any sense to have make-believe relationships that restrict freedom to marry.

Under California law, there would be no prohibition against this kind of marraige. It is baffling to me why anti-Muslim websites and articles latch onto this relationship as somehow damming. In Europe, there was an ancient prohibition against such marriages. The rule was supposed to protect sexual competition between parents and children and shielded children from confusion and such. No such thing exists now. In any event, nobody seems to worry about such things anymore, at least as far as the law is concerned.

How we view adoptions

What do we have in the difference in how we view adoptions: In Islam, we do away with formal adoptions because they are not real and create absurd consequences. In the United States, we have adoptions, but we do away with some absurd results by statute but leave others intact. It is fair to say the term “adoption”- like many terms, means different things at different historical periods and different geographic locations.

If you want to adopt, you need to have a definition that fits your values, which, if you are reading this blog, presumably means in keeping with Islamic tradition.

Guardianship

Being a guardian of a minor child does not make you an adoptive parent. The birth parents continue to have their parental rights. Guardians do have many of the same rights parents do; however, concerning the child’s education and healthcare. However, they do not inherit from their wards.

In wills, we typically include language about guardianship for minor children. When a parent dies, they name people, often family members, to care for their children. A court appoints the guardian. This process is entirely appropriate and does not cause any problems from an Islamic perspective.

Adopting anyway

Muslims want to adopt to build and grow their families. There are orphans out there with no relatives capable of taking care of them. We have children in foster systems all over the country.

So go ahead, adopt. Yes, it is a legal fiction. Yes, it can create absurd consequences. But you can and should adjust your planning for these consequences.

Inheritance for your adopted children

Adopted children do not inherit in Islam. When I say inheritance, I mean inheritance by right. That is not the same thing as saying they cannot get anything after an adoptive parent dies. However, the share of the adopted child or children is limited to the wasiyyah, which is no more than ⅓ of the estate in the aggregate.

Example:

Sultana has three biological children: Muhammad, Ahmed, and Hamid. She also has an adopted daughter, Hamida. If Hamida were her biological child, her inheritance share would be 1/7th. However, she is not. So she gets nothing by right. Sultana can give a wasiyyah to her adopted daughter. She can give up to ⅓ of her estate to her daughter. She can give more to her adopted daughter than her biological son.

We do have a problem however when parents have only adopted children as their heirs.

Example:

Judy and Robert are married and are both converts to Islam. Nobody from either person’s family is Muslim. They have adopted three children and have raised them all as Muslim. They want all of their children to inherit from them. What do they do?

Gifting

Another mechanism for Estate Planning is lifetime gifting. Neither Judy or Robert can make their adopted children their heirs for more than ⅓. The only heir in Islam for Judy is Robert, and the sole heir for Robert is Judy. Robert dies first, and Judy survives and does not remarry before death, then the only family she is survived by are her three adopted children. Under Islamic law, 2/3rds of the estate passes to Baitul Mal, which is the Islamic treasury under the Khilafah. In case you were wondering, no such thing exists anymore. So we have Islamic charities pinch hit for this role. This kind of solution would be dissatisfying for Judy and Robert.

One possibility for them is to take some assets and place it in a business entity and irrevocable trust or a combination of those (what they do precisely depends on their goals and the assets in question). They give away the assets during their lifetime. So, for their home, they create a Qualified Personal Residence Trust. In this trust, they keep a present interest in this trust but give away a future interest (after say 30 years) to their adopted children. The gift is not connected with their death and is not inheritance. If they want to continue living in the home 30 years later, they will pay rent to the trust for the benefit of their adopted children.

Why not just give stuff away outright? Because they may lose it through divorce, lawsuits or bankruptcy. Also, because you may only want to give a portion of the asset away while maintaining control of it, kind of the way a company owner sells shares off to raise capital.

That is just one example of a solution that may be available for Judy and Robert. Whatever solution, Judy and Robert will have some assets of their own if they die without and Islamic heir, and that only ⅓ of those assets, in the aggregate, can pass on to adopted children. There is just no getting around that.

Maintaining ties with the biological family

As a general rule, adoptive Muslim families should not permit cutting off ties with the biological families of their adopted children. Cutting off family ties is a sharia issue. It might make you an oppressor. Maintaining family ties would mean keeping the name, facilitating communication and also, when relevant, trying to get the biological parents to include their children in their estate plans, notwithstanding the adoption.

In many instances, it may well be the case that the birth family is embarrassed and does not want to have anything to do with their prior life. The child may be a product of trauma. The existence of the child may be a secret with extended family. Of course, these are all considerations adoptive parents need to work out before they decide to restore family ties.

Adoption is hard

Adoption is a remarkable challenge and many parents. It is admirable what many parents go through as they build their families. Many parents adopt children from traumatic backgrounds, with health challenges or special needs. Many parenting challenges are similar to families with only biological children, while others are different. However, the act of adoption is charitable. I mean “charitable” in the sense that parents who do it act for the benefit of humanity by giving wealth, time, love and everything else they have into this endeavor. It is not however precisely the same thing as having biological children.

When we plan our estates, we need to reflect our values. We also need to reflect reality.

New Book: Estate Planning for the Muslim Client

January 19, 2019 By ahmed shaikh

My writing partner Yaser Ali and I have been working on a treatise on Islamic Estate Planning for three years. I am pleased to announce “ Estate Planning for the Muslim Client ” is available from the American Bar Association.

We felt the ABA was the best legal publisher to work with for this kind of project. The ABA has a stellar reputation. In introducing an Islamic Estate planning treatise to the legal world, we wanted to do it right.

Who this treatise is for

Estate Planning for the Muslim Client is not a book for ordinary consumers. The audience is primarily lawyers who want to help their Muslim clients develop estate plans. Say, for example, a Muslim family in South Dakota wanted to hire an attorney, and there were no local Islamic Estate Planning Attorneys are available to help. This is an opportunity to help. Or perhaps there is a young Muslim lawyer in a big city that wants a starting point to learn about Islamic Estate Planning. Perhaps he wants to find out what traditional estate planning techniques work, which ones to avoid, which ones to modify and how.

They can even get some forms and drafting ideas, which is typical in practice guides. This treatise is intended to spread ideas and help people implement them. It is to make something once deemed foreign and unapproachable something they can confidently offer to their clients.

From Scarcity to Ubiquity

I want to make Islamic Inheritance among American Muslims as ubiquitous as fasting in Ramadan. Islamic Inheritance is fundamental to Islamic society. It is how we avoid lots of fitna, form a bulwark against familial oppression and develop harmony. We can have families where there is mutual respect for rights based on fear of Allah.

Muhammad (SWS) predicted that his ummah would have widespread ignorance of the Islamic Rules of Inheritance one day. In my experience, I found there was little knowledge not just among lawyers and ordinary Muslims, but also among some of the most learned. We need to fix this.

A Collaboration

I started my law practice focusing on Islamic Estate Planning in 2006, while just beginning to learn about both Estate Planning (I practiced in another area of law previously) and Islamic Rules and was blessed to have resources to learn both of them as I was practicing, including Dr. Muzammil Siddiqi, the most knowledgable person I could find at the time was in my local area. I also reached out to many lawyers locally and nationally who served as mentors as I developed a system. It was not perfect then of course, and it is not perfect now. But the practice of law is, in addition to providing clients with service, about learning and growing.

I collaborated with Yaser Ali of Arizona, who had ijaza in the leading Hanafi school text on inheritance. Having him on board helped with the quality of the final product. Sheikh Shadman Ahmed did classical Islamic text research for us. The ABA provided extensive peer reviewing, editorial guidance and some great editing.

We Need to Learn More

We expect to develop this treatise further insha Allah as we keep learning and laws change. My goal with “Estate Planning for the Muslim Client” is for more lawyers to confidently develop Islamic Estate Plans for their clients. Ordinary Muslims should feel comfortable going to a lawyer to get their planning done.

I have been involved with organizing Attorney continuing education for years in my local bar association. Individual lawyers get better when we collectively commit to developing and sharing knowledge. With Islamic Estate Planning, that community won’t be around if there is little interest among Muslims Islamic Inheritance in the first place. If there is little interest in the subject by Imams and Shuyukh in the subject, don’t expect ordinary Muslims to care much either. So I do hope that Muslims will start encouraging everyone to do right by their own families based on their values.

Here is a link to the ABA treatise, Estate Planning for the Muslim Client. You can also review my comprehensive article on Islamic Inheritance (that you don’t have to pay for) if you want to learn more.

Free Islamic Estate Planning Resources

December 21, 2018 By ahmed shaikh

So why would a lawyer suggest free Islamic Estate Planning resources? For me, being an Islamic Estate Planning lawyer is more a labor of love than anything else. It is the notion that there is this fard out there, one that has been fundamental to Islamic society, yet largely forgotten. It is about doing whatever it is that I can to make it more accessible and sophisticated over time.

Along with this, I need to be able to account for the limitations that come with being a law practice. What lawyers typically do, when they are at their best, is that they solve problems by gathering facts, making arguments about the law and working to get the client in a better situation than they were before. Naturally, this does not always work (especially in litigation), but we need to do our best.

Estate Planning is about counseling and developing solutions and documents are merely a byproduct of this. The economics that comes with having a law practice where I need to charge substantial fees for what is an even more considerable service is something I understand many people cannot afford, or possibly, can’t see the value worth their money.

So the purpose behind this post is to provide some guidance as to what estate planning options there might be for people who are not yet ready for a lawyer and the fees that come with it. I will also caution you about a few things as you go on this journey.

Table of Contents

Calculating Islamic Inheritance

One of the first things you should do in your journey in completing your own free Islamic Estate Planning is to calculate Islamic Inheritance. Inheritance shares are essential information that you will need to know.

There are several calculators available on the Internet. Without casting aspersions on any particular calculator, I have been disappointed by several of them over the years. One calculator that I have appreciated, despite some minor issues (and the author has historically been responsive to them) is Islamicsoftware.org/irth. This calculator not will show up (at least for me) on the first page of Google, but it has been around for almost as long as the web itself.

In using the calculator, make sure you don’t shortchange certain relatives by excluding them entirely from the inputs. Many Muslims are not aware, for example, that Muslim parents get an inheritance in Islam. They also may not be aware that brothers and sisters are frequently entitled to inheritance as well. Not adding them can be an injustice.

The advice of Shuyukh and Imams

Imams and Shuyukh are often a source of exceedingly lousy advice and outright ignorance when it comes to Islamic Inheritance and Islamic Estate Planning. Not everyone, but there are very few Shuyukh or learned people working in Islamic Centers today who are up on the subject. I have been the beneficiary of a whole lot of good advice from Shuyukh over the years. Yet I know not everyone has been so fortunate.

I have heard clients tell me their Imam said to them that in America, all you have to do is write “according to Sharia” and a judge would make it happen. There is almost no limit to the bad advice out there. So I would recommend making sure advice from Shuyukh is limited to fiqh and Islamic questions about inheritance rules (can I give more to my daughter? Can I give away a house to my wife? etc.) and not legal advice. Shuyukh are not permitted to provide legal advice, and the consequences of doing so can be devastating. It’s a felony in many states that that does not typically stop some from doing it anyway.

While Shuyukh can and should give spiritual advice, it is essential for you to ask someone with knowledge of the subject. As is the case with any large field, not everyone is an expert on everything. Many Shuyukh will acknowledge this and point you in the right direction when they don’t know the answer themselves.

Last Will and Testament

One of the biggest weaknesses in doing the last will is that it is not an estate plan. The last will only address what is known as “probate property.” Not all property, indeed, for many people, most property is not going to be “probate property.” As a result, a plan based on the last will as its foundation is often going to be mostly useless. You may get a sense for this as you read on.

That is not to say that you should not have the last will (you should) but you need to be realistic about the limitations that they have. Another thing about the last will is that it is not the same thing as a wasiyyah. That is completely different.

For many years, particularly in presentations, I have provided a sample last will for people who do not want a lawyer or cannot afford a lawyer. You can get a copy of that right here (it’s for California).

Fill in the blanks

In recent years, there have been automated fill in the blanks forms have been made available. There has been some marketing around this idea as well for template fill-in programs that cost some money.
Yasir Ali, my co-author in an upcoming Islamic Estate Planning book, has developed an entirely free will template filling program for all 50 states.

I am not involved in the project and don’t like will-based plans in general (I know Yaser agrees since that will be in our book), but Yaser Ali is an expert in Islamic Inheritance, and this falls into the area of being valuable for people who don’t want or need a lawyer. I tried it out myself and it does what it sets out to do: It fills a will form for you with a calculation (based on the “irth” calculator I like). In the right cases, it may be the right thing to do.

These services, if you pay for it or not, do not provide legal advice and offer a document that is extremely limited in scope.

As I’ve stated elsewhere, I am dubious that it is possible to have an “Islamic” last will for many if not most people. Both because of how assets tend to be structured as well as the probate process itself, which has its own rules and internal logic. The Islamic provisions of a correctly stated last will can easily be ignored by a judge, not because of Islamophobia, but because a statute may require it. It is often the wrong type of plan.

Holographic Wills

Say you don’t want to give your personal information to anyone to generate these documents (ok, I understand), you can do what is known as a “holographic will.” As best as I am aware, all states have a provision allowing for minimal formalities when it comes to the last will. State law will typically fill in the blanks.

In California, holographic wills fall under probate code §6111. The material portions of the document need to be in your handwriting. You need to specify who your “executor” will be; this is going to be the person who will carry out your wishes after you pass away. Of course, if you have minor children, you should state who you want as a guardian for your children. I have written a separate guide for guardianship for Muslims here.

You will also need to specify how your executor will distribute inheritance. So you need to state the shares for all of your beneficiaries which you can do by calculating it as I described above.

You will need to sign the document. It would be an excellent idea to date the document, though this is not required, strictly speaking (in California). Under the law, it is not necessary for you to have any witnesses in a holographic will. However, you should note that witnessing wills is an Islamic requirement and it is something that you should incorporate into your document if you are doing one.

Being Married

Married couples with assets represent special concerns, both in how a person might plan and obstacles that exist in planning. I have written about this here. Many of the problems have to do with ownership of assets, but also default rules under state law. For example, some states have forced heirship provisions as well as other provisions in both state probate codes and default rules in how assets are owned. You may also be concerned about how the home would be owned if one of you passed away.

Ownership of Assets

It is a mistake to think you can sign a magical document that solves all your problems. Estate planning is fundamentally about organizing. Having the most brilliant documents in the world will often mean little if you arrange your assets in a manner that is not consistent with your goals.

For example, the most common way people own their home is through joint tenancy with right of survivorship. People also have bank accounts with a POD or TOD designation (that is “payable on death” or “transfer on death”), they may have beneficiary designations done wrong, or they may have other affairs, such as business ownership problems.
What you should do is make a list of everything you own and figure out what happens to it after death. For example, if you have a brokerage account that transfers to your wife after death, the last will or a living trust will probably do nothing to stop that from happening. The result is a plan that won’t follow your goals, assuming your goals include following the deen.

Beneficiary Designations

Certain types of assets are beneficiary designated. For example, retirement plans such as 401(k)s. In some ways, these plans are mostly designed to pass on all assets to the surviving spouse. The surviving spouse has a benefit other beneficiaries do not have, the “spousal rollover.” Understand that retirement plans and withdrawals create complex taxation issues for different kinds of recipients.

It is possible however to construct a beneficiary designation that follows the Islamic rules of inheritance. You need to get your spouse’s permission in many cases though. Last wills generally do not control the distribution of retirement plans.

Banks and Brokerage Accounts

There are multiple ways to handle these types of assets. If it is an asset that is in your name, the distribution would (possibly) be based on the Islamic Rules of Inheritance if you had an Islamic will. You can also do a payable on death or transfer on death designation (for some accounts) which is going to be similar to a beneficiary designation I discussed above.

Other Assets

There are of course a wide range of assets that will have different ways of transferring wealth from one generation to another. You may need to account for royalties, oil drilling rights, buy-sell agreements, digital assets and a wide range of other assets may need to be considered for in your overall planning. It is essential to have an understanding of all of these assets and how your executor or trustee (in the case of a trust or other trusteed asset, like a 401(k)) will distribute them. Of course, at some point, it will start to feel irresponsible not to hire an Attorney.

Unpredictability

One major problem with this “hodgepodge” style of Estate Planning you would be doing yourself is that you are dealing with a subject that is inherently unpredictable. When you plan for what will happen after you pass away, you are preparing for a time and circumstances for which you are completely and utterly ignorant. You do not know when you will pass away, who your survivors will be and what the exact years of inheritance will be for these people.

Now you might be a man with a wife with two parents and a son and a daughter. You can calculate with precision what share of inheritance each one will get if you died today. Assuming you will not die today and your last will has provisions that are outdated because you do not think to change your will and all beneficiary and POD and TOD designations immediately or were unable to do so, how would it shake out?

It probably won’t be Islamic anything. Whatever “planning” you do would need to consider these contingencies; otherwise, it is just a “band-aid” that cannot withstand normal life.

Living Trusts

Another possibility that you can look at would be an Islamic Living Trust. What you might find it amazing about trusts is that under state law (particularly in California) there are even fewer formalities to creating one then there is a living trust. That does not mean they should be “simple.”

A trust is a form of contract, they can be as long or short as you need them to be. In a revocable living trust, the parties are a grantor, a trustee, and beneficiary. You would be all of these things. Then you have successors who will act as Trustees. It is a rulebook, and you make up all the rules, and there are many. To the extent, you did not include the rules, a state like California has a “trust law” that will fill in the gaps. It is not the foundation of an Islamic Estate Plan. You might end up with problems similar to what you would get with a will-based plan, or they can be much, much worse. Indeed, I have seen poorly drafted living trusts to result in hundreds of thousands of dollars in legal fees.

As far as legal formalities go you can draft a trust on a paper napkin, say who your trustees are after you die, divide up the shares of inheritance and it can be legally valid. Of course, legally valid and beneficial are two entirely different things. If you are looking at doing a trust-based estate plan, get a lawyer.

Power of attorney

Any good estate plan will have provisions for incapacity. One simple way is through a power of attorney document. A Power of Attorney is a document that lets another human being sign your name. It is inherently a scary document. However, people use them all the time. Say for example to transact business in California when you tied up in Pakistan.

It can also be used in the event of incapacity when a person cannot make financial decisions anymore. Most states provide free “statutory” power of attorney documents on the web. You can download it and use it. For example, here is one for California.

Healthcare Documents

There are several different considerations when it comes to healthcare powers, something I have written about previously. Most states, including California, have forms available for free. In California, it is called an Advance Healthcare Directive (fillable form). I have previously written about these documents here.

Burial Instructions

In my law practice, when there is a Muslim that comes from a Muslim family and lives in an established Muslim community (like we have in Orange County, California), my advice on burial instructions is don’t worry about it. Burials happen so quickly and efficiently that it is often unrealistic to assume anyone would even look for burial instructions. Your family can easily figure out who to call and they will do a good job. You might know what I am talking about if you have been through it. In Orange County, everything can easily take less than 15 hours, from death to burial.

However, some people would want to include burial instructions in their last will. These people may include those who are new to Islam and do not have many Muslim family or friends. In such a situation, it is essential to not only have burial instructions but also make sure that close family members and friends know about it and have a copy of it. Some Muslim mortuary organizations have wallet cards that include burial instructions. In California, if you sign instructions that are detailed enough and have paid for your arrangements or have the money to spend, the instructions are binding.

Doing it yourself

The Free Islamic Estate Planning resources are here for you at your own risk and that of your family. In my view, the actions you take should give you peace of mind that you are doing right by the people you care about, that you are doing right by yourself and your values. For many people, this means going to a competent lawyer that can guide you through the process. For others, it may just be figuring it out yourself.

Owning a home jointly with your child is a bad idea

December 1, 2018 By ahmed shaikh

Joint Tenancy with Children is a bad idea

I see a lot of situations where Muslim parents own their homes with adult children. This is a problem. I will go straight to the example of what I am talking about since this is the way to communicate the most beneficial information to you (I hope):

Saleem, Harita, and Samy

Saleem is a retired widower with a 23-year-old daughter, Haritha, and a 30-year-old son, Samy. Haritha married two years ago after graduating from college and lives about a three-hour drive away. Her husband is a plastic surgeon. Samy married about a year ago and had been doing pretty well in his career since he finished his education about five years ago. He started to help pay for the mortgage on Saleem’s house. Eventually, he began to pay for the whole mortgage payment. Saleem owned this home for about 20 years, and there is still about $150,000 left on a halal mortgage. The house is worth $700,000.00.

Saleem sees Samy as the person who is taking care of him. He is now paying off the mortgage. Saleem can now relax about his home mortgage expenses as he is now retired and has a limited fixed income and not a large amount of savings other than the equity in his home and a 401(k) he would instead not draw on since he is not sure it is enough.

Not having a mortgage, for anyone is a massive weight lifted off a person’s shoulders. He is grateful to Samy for this. Saleem puts Samy on the deed to the home, so both of them own the house as “joint tenants with right of survivorship.” The right of survivorship means that after the death of one, the entire rest of the property will be passed on to the other joint owner. By its terms, it violates the Islamic Rules of Inheritance. So if Saleem passes away, Samy gets the whole home.

Is there a better way?

So here is the question: Did Saleem did the right thing here? Is there a better way to handle this?

Saleem should, of course, be grateful for Samy’s staying with him and paying the mortgage. However, the financial arrangement he made in rewarding Samy was excessive, and the way he did handled it (and this is common), but more importantly, it violates Islamic rules.

For one thing, there is the basic rule that Inheritance I distributed to children based on the faraid, that is the basic Islamic Rules of Inheritance. Saleem has carved out an entire asset that merely gets passed on to the son, without anything being passed on to the daughter. That is a fundamental injustice to Haritha. It does not matter that she does not need the money or that she took no part in paying for the mortgage. He has an inheritance right that needs to be vindicated.
There is also another practical problem. What happens if Samy, in the coming years as Saleem continues to age, gets sued, divorced, has significant medical bills or another financial calamity? Saleem would then worry that he would have to leave his home because someone had a claim against his son. He might lose everything.

Things to consider in owning a home

Here we need to balance a few things. There is no one solution to the challenge that a person like Saleem faces, but a lot of it would depend on him and his goals.

If he wants to give the house to his son outright, he can do that. There is nothing wrong with that. But he should have no ownership claim to it and should not expect to have the right to live there. His son can sell it, his wife can kick him out after a fight or lose it betting on horses. Now it may, however, be possible to create an arrangement where he can continue to live in the home. I have written about this kind of planning (in a somewhat different context) previously.

Another thing we need to consider is the nature of the transaction. Samy staying with his father is not without benefits to both Samy and Saleem. If he remains in a home that has been in a mortgage for many years already, it is very likely the monthly mortgage payment is less than what he would pay to rent a comparable home. Saleem can regard the entire amount as rent. He can also decide part of it is rent and part of it is payment for the equity in the home.

That Tax Deduction

One reason for transferring ownership to Samy is that Samy may want the tax deduction for the mortgage interest. Saleem has no use for a mortgage interest deduction anymore, having a low enough income to not worry about taxes too much. Samy is in a higher tax bracket, so the tax savings would be more significant for him than for his father, who may get no benefit at all if he was not paying income taxes anyway. So Samy wants to put the mortgage in his name and thus, the home in his name as well since you cannot mortgage something you don’t own.

While we still have all the same problems as I described above, the solution may be different because there is this desire to transfer actual ownership to Samy. Here, maybe we want Samy to own the home. But one other thing we want to do is preserve the inheritance rights of Haritha.

Sameer can accomplish Samy’s goal of getting ownership of the home. At the same time his goal should also be not shorting Haritha on inheritance. Sameer does this by creating a note and “deed of trust” that shows there is a loan given by Sameer to Samy. There does not need to be any interest (though there may be some tax consequences, like minor if any). So this way, the home itself is owned by Samy, but Samer holds the equity.

Sameer would still be concerned about Samy being sued or going through some other kind of financial calamity. There are a few different solutions here as well. We can carve out interests in the house for Saleem. A solution may include making sure he has equity in the home as well as other rights. For example, Saleem wants to continue to live in the house and cannot be “kicked out” by a creditor or in the event there are inlaw issues.

Don’t co-own a home with your children

My point in all of this is that the most apparent solution many Muslims engage in, in the case of Saleem and Samy, transferring part of the home to a son is a bad idea and it always worth exploring alternatives that accomplish the same goals.

Your goals should be justice. Anything that results in an injustice to a daughter, a son, a spouse or yourself is always going to be the wrong solution.

Excellence to Parents, Even When…

November 16, 2018 By ahmed shaikh

Our relationships with our parents, our children, and their families can be complicated. When we are at our best, what we want for our parents, and other elders in our families including aunts and uncles, is to preserve their dignity as they age. Diet, exercise, environment, injuries, and genetics all play a role in our health. Everyone’s health is to varying degrees connected to their dignity. Sometimes a person’s “poor health” is not apparent and may be debatable. What I want to discuss here is how to deal with the situation where the elderly become vulnerable to exploitation and abuse.

Sufian and Ibrahim

Let’s walk through an example of a senior who starts. Say, for example, getting involved with a shady and risky investment.

Example:

Sufian is a 76-year-old retiree in Simi Valley, California. He “invested” $100,000 for a rice farm in Vietnam, owned by his housekeeper’s family. Sufian gave this money to his housekeeper, Kathy, through a cashier’s check. His son, Ibrahim, who lives in San Francisco, learned about it after a phone conversation with his father. They talk at least once a month. One of the other things he learned was that this was part of a pattern of “investments” with Kathy. She started to get him involved with small loans, like for a used car. Then Kathy moved to get $50,000 to start a “vitamin franchise” last year. The terms for these investments were sketchy, and it looked a lot like there was an enormous amount of risk with not a lot, and likely no reward for his money.

Sufian may handle this news a few different ways. These options are not all mutually exclusive. He can select a combination of options, as can other children of parents with similar concerns:

Berate his father for making a bad decision

Ibrahim can talk down to his father, tell him he is making horrible decisions and that this housekeeper is a crook and that Sufian should have known better. This berating might go on for 20 minutes, and he can make his father feel 2 inches tall.

This strategy may work to a point. Sufian may realize that he should consult with his children before making such decisions. It can also backfire (this may be more likely). It can cause the father to not speak to his son about things like this anymore. Why spend the little bit of time you have with your son in conflict mode? Just don’t bring up financial stuff, or anything beyond small talk about the grandkids. Maybe not even do that.

Maybe Sufian will just shut down completely and become more isolated and more dependent on non-family members like Kathy. This happens with many elderly parents.

Of course, Kathy is still around, and if she is gone, there may be more willing to take her place. The world is not hurting for greedy, manipulative people. Financial elder abusers tend to march into senior’s lives like a parade of darkness. There is still a risk of elder abuse.

Berating also has the result of making Sufian feel like he lost his dignity.

Lastly, this strategy is probably the most common but falls against Quranic guidance. For Example:

And your Lord has decreed that you not worship except Him, and to parents, good treatment. Whether one or both of them reach old age [while] with you, say not to them [so much as], “uff,” and do not repel them but speak to them a noble word.

Berating is always the wrong strategy. I completely understand that it would be tempting though.

Ibrahim gets his father to identify the problem and solution.

The reason this may have come up in a conversation is that it is not a run-of-the-mill transaction. Ibrahim walks through the deal with his father without making any conclusions about it or the housekeeper, nevermind how transparently ridiculous it seems or if he thinks the housekeeper should be in jail.

Any business transaction has risks and rewards. He brings out what the risks are, and what the potential rewards are for the investment. Seniors don’t like being victims of scams any more than anyone else. They don’t often think of themselves as having feeble minds. We all make mistakes, and we are all susceptible to influence of some sort or another. As consumers, we all make irrational decisions from time to time, albeit on a smaller scale. Younger adults will convince ourselves that a purchase of a timeshare makes perfect sense when there is no possible way it could be justified on paper.

With financial elder abuse, the numbers can be more significant and be financially devastating, but a lot of the same tendency to be manipulated is in play.

The goal of such a discussion is to allow the parent to come up with their solution, but with some input from you in a 2-way conversation. It is best that Sufian come up with the fact that the housekeeper is a problem, and that there are some problems with these transactions. There should also be a solution for how to deal with these issues if they ever come up in the future.

Call Adult Protective Services

If Ibrahim thinks Sufian has been a victim of financial elder abuse, he can call the county agency that deals with this kind of thing. Calling a government agency is not easy or the obvious thing to do of course. In California, unless you are a mandated reporter, reporting to Adult Protective Services can be anonymous. Ibrahim might balance the fact that calling APS may do nothing more than cause Sufian aggravation. He may also get some flyers. He may want to talk to them anyway to evaluate his options.

Conservatorship

Ibrahim can get a conservatorship in probate court to prevent his father from making more terrible decisions. A conservatorship may or may not work. However, it can potentially damage his relationship with his father, perhaps for a long time. Sufian can even get his lawyer to dispute the conservatorship. We then have the specter of Ibrahim and Sufian, son and father, both hiring lawyers in a case against each other.

A conservatorship involves going to a Judge in a public hearing, even trial with witnesses, including expert witnesses, who don’t come cheap. Most importantly, it may be treated as an insult even if Ibrahim has the best of intentions. In some cases, it is the only real legal remedy that can prevent Sufian from self-ruin. So Ibrahim may need to go this route if things go badly enough. Of course, he needs to do this with the most excellence he can muster.

The Quran does not mandate that we not act against the wishes of our parents or never disappoint them. It mandates that we treat them with excellence. A conservatorship may be good for him.

Become the Trustee

If Sufian has a living trust, say to do Islamic Inheritance, there is going to be some mechanism to deal with incapacity. Preferably, it would be a system that is private, keeps all the concerns within the family and does everything possible to maintain the dignity of the father. Evaluation inside the family of if Sufian has the executive decision-making ability needed to continue acting as his Trustee. The rest of the world does not need to know. Checks on Sufian can be mostly invisible to Sufian, where the Trustee maintains control over larger accounts but regular bills and obligations, continue to be handled by Sufian, and account activity is monitored by the Trustee to make sure there is no abuse.

People who have lost their executive decision-making ability can be quite ordinary in many other ways. They can be people I would turn to for valuable advice. I am sure you know elders, including your own parents if you are still blessed with them, from whom you would love to draw on for wisdom.

That seniors make financial mistakes from time to time should not change that. We need to treasure them and act like our own dignity depends on their dignity, because it does.