Being an Islamic Estate Planning Attorney , in large part dealing with a certain kind of contracts, is different from being many other kinds of attorneys in that it is not my goal to stress anybody out. At least the way I viewed litigation, causing stress in others is part of the fun in the job. You follow the advice of Sun Tzu in the “Art of War”- when your opponent is angry, irritate him. Try to encourage bad decision-making by your opponents.
I no longer have opponents in court. Clients do come, however, because of a certain level of stress that we all have. It can be significant and urgent because of something that happened recently or merely that gnawing feeling knowing that they have loved ones that have they have not yet adequately attended. They love people, care about people and what to do right by those people. Muslim clients want to do right by Allah, follow the command of Allah, and follow the Islamic rules of inheritance, not do anything prohibited.
The primary way we can do this is by the use of trusts. I have written about them before. However, I have not emphasized how they work and that it is a path to help families through a wide range of stressors because trusts are contracts. They work so well because of contracts. Living Trusts are contracts governing how you want your estate managed in the event of either death or incapacity.
Contracts are essential
However, agreements can be helpful to Muslims in a wide range of other situations. Contracts are vital to any civilization. They are how we maintain peace and harmony in our family and business relationships. A fundamental building block of our society, marriage, is built on a contract. A bank has a fiduciary relationship with you, holding your money, because of a contract. An employer pays you, your cell phone service functions, and you pay your mortgage because of these things you sign.
Contracts are addressed in the Quran extensively; the most well-known example is the lengthiest verse in the Quran, dealing with installment agreements.
When families are going through any stress about the future, it is possible to use contracts and creative ways to address those stressors and perhaps make people feel better about the future. There are no guarantees about anything. However, when folks do them correctly, a critical aspect of contracts is the consequences of violating the terms of an agreement.
Contracts in families
A common form of contract happens towards the end of litigation, known as a “settlement.” One of the most common forms of litigation families will see a divorce. Divorces are, of course, incredibly stressful. Often, they are compared in similar ways as a death in the family. For many people, it can cause continuing stress about the future for decades. Family dynamics can often range from awkward to toxic. Remarriage, more children, family businesses investments, interfamily loans, and family gatherings can all be political.
Divorce is often a time when people can get creative about their contracts. For example, who will pay for the children’s college education in 10 to 20 years? If a family business goes into the husband’s control, and he gets remarried, will that new wife get the company? Or the children?
It is possible to draft contracts around these things. It is also possible to create safeguards around these contracts.
Contracts to Make a Will or Living Trust
State law (at least in California, but also elsewhere) allows for the possibility of making contracts to make a will. It is wrong for Muslims to make a contract to distribute inheritance in any manner that contradicts the Islamic rules. It is, however, possible to make a contract that follows Islamic rules.
For example, a divorcing wife can mandate that if her husband gets remarried, the new wife may not take more than 1/8th of the value of her ex-husband’s ownership in his estate (this is in the Quran for when there are children). In this instance, she is worried about her children’s loss of inheritance because of the divorce. Often, divorce can take a massive toll on children, even if they are adults. It might fracture relationships with one or more parents and commonly results in the disinheritance of children that took one parent’s side or another. Making sure children are taken care of in a divorce settlement is often wise.
Contract to Support a Sister
Going into something a little more novel is the concern that a daughter is getting less inheritance than her brother but might need continuing security and support. In Islam, it is a brother’s responsibility to look after his sister. That is not how American society works, though. In general, through adulthood, there is no legal responsibility for male family members to act as a financial safety net for adult female family members. Under certain circumstances, it is possible to create contracts that do just this.
Contracts are Law
One of the remarkable things about contracts is that to a great extent; everybody can decide what law governs them and create the consequences for violating those rules. They get to make the law. Indeed, we know of the rules in a contract as “the law of the contract.” It is different from “contract law.” Contracts are enforceable under state law with some exceptions, such as violating public policy.
Contracts are Your Values
Your agreements are an extension of your values. You organize your family, your business relationships, and everything else based on those values. If you ever move on from your marriage or a business partnership, you should always do so in a manner that reflects who you are.