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I am planning on doing two different presentations this weekend.  One is for Muslims for the Islamic Center of South Bay- LA (Lomita) Masjid Community.  This is going to be online (of course).  The idea behind this presentation is to provide a way for people who are not ready for an Attorney to do their own Islamic Inheritance and Guardianship plan.  Of course, I also plan on going over the basics of Estate Planning for Muslims.    It is on Friday at 8:15 PM.  The flyer is below, but you should just go here to sign up.  If you want to set up another presentation for your group on guardianship, Islamic Inheritance, Asset Protection, or Charitable Planning just let us know.  

I am also doing a presentation (with another lawyer and a financial advisor) on divorce.  This is not specific to the Muslim Community at all (hosted by Music Network One in Tustin), but if you are interested, you can get the invitation here.  Divorce is a major issue in Estate Planning and I am always happy to address this as well.

 

Many Muslims, including Muslim scholars, are unaware of how inheritance problems can be a remarkable engine for fitna in families.  Ask an older adult estranged from his brother for 20 years or more what happened; he will often (perhaps usually) trace it to an inheritance conflict.  Often such conflicts can be avoided with better advice.

Muslims are not supposed to cut off family ties.  It’s inherently painful to cut out your brother or sister from your life, but people do it all the time.  Bad inheritance planning tends to encourage this.

There is good news, though.  Allah has ordained a system of inheritance in the Quran.  It is objectively impossible for human beings to come up with a better system.  When a person plans inheritance correctly, the heirs will understand the person who passed away was a believing Muslim.  The shares are what they are.  They are not a result of manipulation of the elderly, favoritism, or the mysterious vanity of an old person.  Heirs know inheritance came from Allah. For heirs, there is nobody to angry with, nobody to fight, and only more reason to be grateful you are a Muslim.

Islamic Inheritance is a beautiful system and mandatory for Muslims, yet most Muslims ignore it.  Indeed it’s rare to hear a khutba that mentions it.  However Shaykh Yasir Qadhi recently started an answer on inheritance by claiming he had a simple answer people unfortunately problematize.

In the Quran, with the context of the Islamic Rules of Inheritance, we read:

And whoever disobeys Allah and His Messenger and transgresses His limits – He will put him into the Fire to abide eternally therein, and he will have a humiliating punishment.

Believing Muslims should be concerned if they are doing an injustice to their children and being disobedient to Allah by privileging their desires.  It happens all the time.  Problematize means people creating problems in need of solutions.  Inheritance mess-ups are serious problems that destroy families and should not be taken lightly.  As you will see below, that is plainly not the case.   Unfortunately, Dr. Qadhi’s answer only goes downhill from here, and I will explain why he offers exceedingly bad advice.

Some Context To Our Discussion

You can see Dr. Qadhi’s explanation here in his own words.  I will add to the facts to help illustrate the issues better for this format.

Abdullah is a 76-year-old widower.  He has three adult children, two sons, Ilyas and Jordan, and a daughter, Sarah.

Ilyas is a successful real estate broker,  married, and has two children.  Jordan is a successful doctor and married with three children.

Sarah is a single mother with three small children who recently had a difficult and expensive divorce.  She receives minimal child support, which is often late, no spousal support, and has been struggling to make ends meet.  She has three years of college and cannot get a well-paying job.

Her father, Abdullah, thinks that because the sons are successful, he can ask them to disavow their right to an inheritance so that Sarah gets everything.  The sons say they have no problem with this.  However, Abdullah wonders if leaning on his sons puts him into sin, as Allah ordains shares for both the sons and the daughters.  In Islam, Jordan, Ilyas, and Sarah all receive an inheritance from Abdullah if he dies before them.  This inheritance goes to his children not because Abdullah loves them, because they need the money, they married the right person or any other consideration. Jordan, Ilyas, and Sarah are to get an inheritance from Abdullah as Allah has ordained it to be so.

Sh. Yasir’s advice (to paraphrase) is that the father can ask his sons to give up their inheritance, so long as there is “no pressure.” They can promise this to their father before he dies so that he can feel better.  Allah has ordained inheritance as the right of the heirs.  Heirs are within their rights to turn it down or give it away. However, a “technical point,” according to Sh. Yasir, is that the sons could take inheritance after death, notwithstanding their promise to give it all to their sister.

Your promise is part of your Iman, except here.  There would, of course, be consequences to reneging, something that will have repercussions for the sons.  While he does not mention implications for others in the family, those would often follow.

 Technically, You Need Coffee Beans to Make Coffee

Sh. Yasir is not factually wrong describing Islamic inheritance, and it is not my place to comment on what is or is not a sin in this instance.  However Sh. Yasir’s advice to Muslims is nothing short of horrifying. It illustrates that it is possible to discuss the Islamic Rules of Inheritance without incorporating an analysis of what inheritance is in the first place.  Now Sh. Yasir demonstrably knows what inheritance is; he, however, dismisses it as a “technical point.”

As a technical matter, you need oxygen to breathe.  Technically, you need a dead person for there to be any inheritance.  You also need to know the identity of the survivors, which you cannot know without knowing the future.  It’s not a trivial point. One thing we know about the patriarch we are calling “Abdullah” in our hypothetical is that he is alive, so he is incapable of giving anyone an inheritance.  Inheritance from you (a living person) does not exist to solve problems you have today.   It is not a device you can use to resolve today’s inequities or bring someone in poverty today into prosperity.  It is something Allah has ordained for your wealth at some indeterminate time in the future.

Abdullah will (perhaps) have things he cannot take with him when he passes to the next world, whenever that is.  He will (probably) leave people behind, but he does not know who exactly, or what their circumstances will be.

It’s Difficult to Make Predictions, Especially About the Future

Abdullah’s planning should not incorporate knowledge of the unseen he does not have. What he is doing here is assuming the world as it exists now will not change.  In the coming years, Sarah may marry someone wealthy; she may become a successful entrepreneur, or her son may sign to become a point guard for the Los Angeles Lakers. Sarah may have also become remarried to Jack, a convicted felon and a con artist. Abdullah’s sons Ilyas and Jordan may continue to be successful, or they may become broken men leaving behind a wreckage of bankruptcy, substance abuse, unpaid child support, and tax liens. Or they may be dead.

If Abdullah dies six years later, then Jordan dies ten days after Abdullah, leaving behind five children (he has had more since), are the orphan children bound by their father’s promise?  Maybe, and maybe not, but Sarah and other family members may feel differently than those children.  Family gatherings may start to become awkward, or they may stop happening, for this or because of thousands of other hypothetical future scenarios.

According to the Social Security Administration’s actuarial tables, Abdullah, who in our example is 76, may reasonably expect to live for more than ten years.  If Abdullah makes it to 85, he may well yet live for another five years, according to the tables, which go on to 119 and assume you only have months to live for several years.  A whole lot can happen between now and Abdullah’s death, which the actuarial tables don’t have the power to predict.  Only Allah knows.

We should be clear on what Sh. Yasir Qadhi approved: A promise by sons to give away something they may never get at an indeterminate point in the future to help someone who may not need it, and even if it could help, it may be criminally unwise to fulfill such a problem.    The promise here is illusory and maybe even worse than that.

Inheritance May Not Do What You Think

Inheritance is a category of “sudden wealth.”  Heirs often spend inheritance rapidly.  While it can ease burdens for a time, it may be ephemeral.  People who started broke and received sudden wealth like inheritance are often broke again within a few years.  I have seen several situations where a woman lost all of her inheritance because her now ex-husband “borrowed” it all to start a business that ended up failing or other similar situations.

A Guide to Parental Fitna-Mongering

Unfortunately, here I must introduce you to the world of parents who pit their adult children against each other over wealth.  It sounds (and is) bonkers, but it’s supported by a history of many inheritance disputes, including fictional ones in popular literature going back centuries.  I once worked on a case where the dead mother set up her estate for a conflict between her daughters, then offered increased inheritance to one daughter if she filed a lawsuit against her sister (and the mother’s only other heir).

There was no requirement anyone wins the suit to get more inheritance, only that she sue her sister.  It was diabolical. But if you are familiar with how bad family politics can get, you probably won’t be surprised.  You should be grateful Allah has ordained inheritance in the Quran, and that parents cannot do whatever they want.  You would be surprised how frequently this power is poison.   We know from the Quran your wealth and your children are a fitna.  It’s possible to handle this badly.

So here we go to Abdullah’s wishes when it comes to inheritance.  His desire is a “halal” way to do what he wants by asking his sons (with no pressure) to make a promise they have no way of knowing they can keep. Sh. Yasir is also clearly aware that the failure on the part of the sons to make good on this outlandish promise will have consequences.  What are those consequences?  One result may be becoming dishonorable in the eyes of their sister and her children.  It means family relations will be damaged.  Siblings and cousins may not speak to each other, perhaps ever again.

But maybe the sons will have reasons not to give over their inheritance if and when that happens, which is quite literally their Allah-given right.  It is also possible Sarah or her heirs would not truly understand why and be hurt and offended.  What if one of the sons just went through bankruptcy at that exact moment (a fact you usually don’t advertise)?  What if Sarah has married someone she is fiercely loyal to that the sons knew had previously cheated a prior wife of her wealth?   Some people may be justified in acting one way; others may feel hurt.  Abdullah won’t be around to see the consequences of what he wrought.  His legacy may be descendants who hate each other.

Deal with Today’s Problems Today

Abdullah is concerned about his daughter Sarah. It is his responsibility, as well as the responsibility of Jordan and Ilyas, to deal with this now.  Abdullah can write Sarah a check, or help her in another way. Ilyas and Jordan are men, and it is their duty to look after their sister if she is struggling.  Abdullah is doing absolutely nothing for Sarah by leaning on Ilyas and Jordan to give up future inheritance that may never happen.

Another thing Abdullah can do is talk to his sons about their responsibility in taking care of Sarah after he is no longer around.  Yes, in Islam, sons get more inheritance than the daughter.  Jordan and Ilyas’ obligations to their sister will exist even if they never see a nickel of inheritance from their father.  What should give Abdullah peace of mind is not a meaningless promise about some indeterminate time in the future.  Rather, it would be the comfort of knowing he raised sons who have accepted their responsibilities.  Abdullah can incorporate this into his Islamic Estate Planning without changing shares around.

Instead of Abdullah asking his sons to give up any future inheritance, he should ask them to make sure they will do what they can to help and support Sarah when and if she needs it.  That should be enough for everyone.

What A Patriarch (or Matriarch) Can Do

Abdullah’s Islamic estate planning may also cover other potential perils for heirs, like lawsuits, divorce, or bankruptcy.  So, for example, if one of the sons is not able to directly support his sister, because he is going through a lawsuit, there could still be a mechanism to help Sarah.  If there is nothing in Islam that prevents Abdullah from creating a plan that is protective of his daughter.  However, if it’s Abdullah’s goal to hunt for loopholes around the shares ordained by Allah through some sort of “technical” path, things can start to get ugly.

Islamic Inheritance is better because it is a system of rights and responsibilities Allah has ordained.  This system helps preserve peace in families as few other things can.  It’s better than anything you can come up with because you don’t know the future.  If you try to improve on the system of inheritance, you will probably cause needless fitna.  If you decide to write a fictional novel about Islamic Inheritance done correctly, it will likely be incredibly dull.  That is as it should be.

What Shuyukh and Imams can do to avoid giving bad advice

Islamic Inheritance is a test for Muslims to accept Allah has ordained their wealth in a specific way.  It is often not easy for a lot of Muslims to take.  I have often been told by Muslims asking me to fudge on the Islamic rules, “this is what I want.”  Yes, you can do what you want with practically any lawyer, but Islam is not the religion of hedonism.  We don’t get to do whatever we want. Allah has dominion over all that is in the heavens and the earth.  It’s not your wealth to do with as you please.

The dilemma for those who provide advice on Islamic Inheritance, which includes Shuyukh, Imams, and others with knowledge on the subject, is that it’s possible to construct a way to seemingly achieve an old man’s desires through the use of “technicalities.” However, you need to be concerned that by doing this, you may be creating a monster that can harm the family.  While everything Dr. Qadi said may technically be right, the risk of fitna for the family in exchange for no real benefit it just too high.

In this case, think of what Abdullah, in our example, wants to do.  Abdullah may have a political gripe with Islamic inheritance.  He may also simply be concerned about his daughter’s welfare when he is gone.  If it’s the former, indulging his vanity makes no sense and provides benefit to nobody.  If it is the latter, there are better ways to accomplish this without risk of causing fitna in the family, as I described above.  Provide inheritance advice that results in the least potential harm to the family.

When it comes to inheritance, the right thing is what Allah has ordained.  Don’t try to improve on this.  You will fail.

To schedule a 15-minute, no-obligation consultation over zoom to learn about the Islamic Estate Planning process, click here.

 

An Announcement:

I am adding Attorney Firasat-Bakali to our Islamic Estate Planning Practice at the Law office of Ahmed Shaikh.  She has an LLM in Tax and has previously worked as the managing partner of Rex Law Firm in Orange County.  Firasat will do Estate Planning with sophisticated business, tax, and financial implications.  She is eager to educate Muslim community groups about Islamic Inheritance.  I hope to modify my websites to include her in the next few weeks and you will likely hear more from her in the future.  You can also reach out to her if you want to organize a webinar on zoom for your own community group or circle of friends.

You can reach her at (866) 403-5294 at extension 3, or email her at firasat@ahmedshaikh.com.

Her biography:

Firasat Tar Bakali is a California trusts and estate attorney practicing since 2009.  She attended UCLA where she obtained a Bachelor of Science in Political Science.  Firasat then received her JD from Loyola Law School.  More recently, in an effort to better serve her clients, she earned her LLM in Tax from Loyola Law School, graduating with distinction. Before joining the Law office of Ahmed Shaikh, Firasat was Managing Partner of Rex Law, LLP.  During her time there, Firasat practiced in a variety of legal fields, ultimately finding her passion for estate planning.   Beyond counseling clients in the office, Firasat believes in educating the community about estate planning and financial matters.  Her motivating factor is the continuing well-being of her community/clients. Firasat grew up in Santa Monica and currently resides in Orange County, California with her husband and three children.

 

As I do a lot of Estate Planning for Muslims in the United States, you would typically expect that many of my clients are immigrants.  Part of the immigrant experience for many is that there continue to be connections to your homeland for a generation or two.  Ties may include overseas property.  As time goes on, connections fade.  Foreign assets just make things more complicated.

Many of my clients own property and businesses overseas, like Pakistan, Afghanistan, Palestine, Egypt, Sudan, Syria, India, and virtually everywhere else.   When you do your estate planning, it is reasonable to wonder: what happens to this stuff after death?  How do you make sure it goes to your family?

As a general rule, the estate planning you do in the United States does not cover assets owned overseas (it could as I will describe), you need a lawyer in the country where you have assets that will give you advice on what to do with that.   The counsel I provide about these assets depends on my client’s experience.

What Kind of Foreign Assets are Problematic

When I say owning foreign assets, I don’t mean owning stock in international corporations, or anything easy to track and sell.  The examples of assets that have problems associated with them:

• Inherited property, held ambiguously by multiple siblings or other relatives.
• Businesses operated by overseas business partners.
• Rental properties and vacant land.

The main problem with foreign assets in certain countries is that they have a way of being ephemeral; your children are often unlikely to inherit them.  Inheritance is the kind of asset often stolen by the unscrupulous.  Cheating an heir who lives oceans away with no real ties to the country is usually not hard.

Many Muslims are motivated to do their estate plans as they have been cheated out of an inheritance themselves.  I have clients who were victims of inheritance-theft in more than half a dozen Muslim countries and countries with large Muslim populations, like India and Israel (though property theft is part of some country’s brand, I suppose).  Pakistan though, if I were to single one country out, is likely the place where you should be most wary of owning anything.

Ties to the Country

If you want your property to be owned by your children after you die, you should ask yourself: will your children want it?  Will they be prepared to fight for it? Fighting for it may mean overseas travel, hiring lawyers, and dealing with potential nonsense from a wide range of parties you never really expected.  I had one client who had an uncle that forged death certificates for all relatives that moved to the United States.

Fighting for inheritance is draining and often not worth it even if it is in your back yard.  It is often viewed as less worth it if the fight is on the other side of the globe.  People who want to steal inheritance know this.  Unfortunately, Muslim countries are not hurting for people who would deny their family members their rights to Islamic Inheritance.

A brief guide to handling overseas property

At a minimum, if you have property overseas, you can do an estate plan abroad with a lawyer in that country.  If this is too much of a bother, don’t own it.  Anyone who assumes everything will be ok because the country follows sharia is probably a fool.   People steal inheritance in Muslim countries all the time.

Adults who grew up in the United States would be lost trying to navigate the legal system of a foreign country.  If the asset is relatively small, say in the hundreds of thousands of dollars, it may not be worth the fight. Especially if other relatives, business partners, random squatters, and others are willing to contest ownership.  Those lucky enough to spend many summers in the country when they were younger and speak the language may still have an uphill battle.  If your children don’t know the language and only know about your country of origin from eating the food, your property abroad may be about as valuable to them as prime real estate on Neptune.

Another way to handle property overseas is to make overseas property US property.  The way you do this is to create a business entity (like a corporation) in the United States and another in the country where you have the asset.  It would be a parent-subsidiary relationship similar to an American bank owning a bank in another country.  An Islamic Living Trust would typically hold the business entity in the United States.  For those who are not international business people, this may be too expensive and not worth it.

If you insist on keeping this asset get a professional property manager who can be in regular contact with you, if this is appropriate (it depends on the asset).  There are property managers available in other countries.

Tax reporting

US persons need to pay taxes on all worldwide assets.  If you collect rent or get business profits from any asset outside the United States, report it to the IRS.  This is true even if all the money stays overseas.  You can get in trouble if you don’t, and you should never assume the government won’t find out.  One common issue with people who own property overseas is that they do not do appropriate accounting and reporting.  When they die, the business asset may be even easier to steal.

Ambiguous Inheritance Overseas

Some American Muslims have inherited property held by family overseas.  They don’t know what it’s worth or what it is really.  Only that it’s “a lot of “lands or that “my uncle is taking care of it.”  When you do your estate planning, you need to know if this is a real thing or not.  Try to get relatives or business partners to buy you out, even if it is through an installment sale.

The property right then becomes concrete, not just for you (you may not care about you, and you don’t want to have uncomfortable conversations with your siblings or uncles), but for your families.  Your children have a right to inheritance from you.  Not taking steps to vindicate your children’s inheritance rights would be the same as denying them their rights.

It needs to be worth it

The main goal of estate planning is to organize your affairs to do right by the people that you love.  You need to follow the Islamic Rules of Inheritance.  If you do everything right in the United States (something we help with) but have set up your estate to fail or made it easy to steal outside the United States, you are meting out half-justice to your family.

If you have international assets, do it right or get out.

Set an Islamic Estate Planning Appointment

To set a 15 minute consultation over video-conference (a get to know you kind of call), click on the calendar link here.

You can set a 90-minute Islamic Estate Planning meeting (to actually plan), appointment through this link.

 

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.

–Quran (17:23)

Belated Eid Mubarak to all.

I want everyone to enjoin the good and forbid the evil.   I want us all to aspire to be excellent to those of us fortunate to have parents with us.   But the relationship between adult children and parents can be complicated.  Discussing Estate Planning across generations is challenging.

I know many adult children want to advise on Islamic Estate Planning to their parents. It’s a common occurrence at my Islamic Estate Planning practice.  But also, it is common that many times children fail to get their parents to do anything at all about their estate planning, worse their parents make awful choices, like not plan based on Islamic rules and go with their sense of vanity instead.

Families are deeply complicated things.  A fundamental part of my job as an estate-planning attorney is working through family politics in service of doing the right thing.  What I say here may not necessarily be about YOUR family.   I do hope some of the ideas here will be useful to you.  If you have any questions, you can set up a 15-minute video conference to discuss.

Things Can Go Wrong

Some potentially unpleasant yet common situations:

• A family business where one of the children is more involved than others.

• There is one adult child that continues to live at home, apparently financially dependent on the parents while other children are away and economically independent.

• A blended family, with children from different marriages and various levels of access and influence over parents.

• Parents do not want their children to have any idea how much wealth they have or are embarrassed to share with their children how little they have. Parents may be especially ashamed if they have been victims of fraud or elder abuse.
• There is a lack of mutual trust among various members of the family. For example, a father may perceive his son to be greedy or too eager to poke his nose where it does not belong.

The driver’s seat

We often have adult children who set up estate planning meetings for their parents. The policy of my office under these circumstances is to speak with the parents and make sure they want to do their estate planning.

Adult children typically try to push their parents in the direction of estate planning will frequently find they have no power to do so. We need to know parents (who would be the clients) are driving this and not the adult children.  We have had to cancel many appointments at our office scheduled by adult children because their parents were not interested. Indeed, they were downright suspicious of their adult children.

Where adult children’s advice is most likely successful

One situation where we can reliably figure parents are going to listen to their adult children’s advice is when the adult children have already done their estate planning.  Advice like this is similar to how friends and advisors recommend something useful.

One reason why parents are more likely to listen is that the conversation about estate planning does not start with a discussion of their mortality: it begins with their adult child’s planning needs.  The adult child will ask their parents if it is ok if their children name them as guardians for minor children, or that a sibling was named, or will get advice from their parents on appointing successor trustees. There is often a concern about the grandparent’s ability to act as a guardian for minor children or if this is something they cannot take on because of age or circumstances.  Siblings, and sometimes even friends are better choices. Who takes on significant estate planning responsibilities is often a discussion worth having.

This conversation starts with children being the responsible adults, making sure that they are following the Islamic Rules of Inheritance, and that there are suitable guardians for their minor children.  This kind of plan also includes what happens if you cannot make financial decisions for yourself or if you cannot make healthcare decisions.

It stands to reason that when children start to do responsible adult things that their parents have not done yet, maybe it’s time to set an appointment.

An Act of Worship

 Say there is an adult son who never prays, never fasts in Ramadan, never pays any Zakat, then starts to berate his father for not paying Zakat.  The message is excellent (except maybe the berating part), but there would be an inherent disconnect between the message and the messenger.  The parent (or anyone) would wonder why it is someone who cannot bother to pay Zakat themselves (assuming he is required to do so) is telling a parent to pay Zakat.

Planning Islamic Inheritance is an act of worship.  Among Muslims, it is perhaps the least followed.  Since money and control of money, business, and real estate is often involved in Estate Planning, unlike prayer at the masjid or Zakat, the “why is he telling me this” question may well answer itself.

Suspicion and Excuses 

When you do your Islamic Estate Planning, you plan for what happens after death. You also outline how to determine that you have lost your capacity to make financial decisions. These are both essential things to plan for. However, depending on how adult children bring up these things, parents might feel that there is some sort of an ulterior motive. This kind of thing may depend on a whole lot of factors. Parents are not predisposed to thinking suspiciously of their children and in-laws, but they are generally not dumb either.

Of course, in some cases, parents are predisposed to suspicion of their adult children.  There is often a history here, and also some toxic family politics.

It should be their idea

We all think about our mortality from time to time.  Everyone thinks about the welfare of loved ones.  They won’t be loved ones otherwise.  We are all concerned about what may happen if they lose their capacity to make decisions.  If you have a genuinely close relationship with your parents, they will bring up the issue themselves just through the course of life. We all have people among our friends and family who passed away or have severe medical problems.   If you ever talk about the issues happening in your parent’s life and their circle of friends, this will come up over and over again.

If you never talk to your parents about these types of things, then you probably don’t have an especially close relationship with them.  As you get older, people around you get sick, become incapacitated, and die with ever-increasing frequency.   This is part of life.

Center Values in Your Advice, But Don’t Overreach

When your parents bring up the issue, it is essential always to circle a conversation towards their values. Fundamental to their values is Islam (of course, if it is not, you’re on the wrong website).

Islam mandates inheritance in a precise way, which of course, I’ve written about for years.  Often people make the mistake of assuming certain things are Islam when they are not.    Such assumptions often come up in ways we do not expect and are usually specific to the family.  For example, a son may try to convince his widowed mom that she is not entitled to any more than 1/8 of the overall estate after her husband passed away. The son claimed his mom did not have any property when her husband was alive, according to Islam. Overreach by children can be quite common.  I have written about this issue previously here.  I have also written recently about how a husband and wife own property.

Healthcare Issues   

Who makes healthcare decisions for your parents in the event they cannot make those healthcare decisions themselves?  Healthcare decision-making authority is something you should know and absolutely must discuss with your parents.  It may be that the person making these decisions is you, and it may not be you. Furthermore, you need to know about what their choices would be.  Part of estate planning includes healthcare decisions, and it would be valuable to give significant thought to this issue.  I have written about this issue before; however, I anticipate writing a long-form article soon and will link it here when it becomes available.

Advice on Medi-Cal and Medicaid

As some of our parents get older, the cost of medical care can increase dramatically.  Perhaps the most significant potential healthcare cost, indeed one with unique wealth-destroying qualities, is long-term healthcare.   Many older adults have assets, such as a home. Still, they often have less income, so they can qualify for both Medicare (healthcare older adults) and Medicaid, known by other names in various states, such as Medi-Cal in California, which is healthcare for the poor.  Regular health insurance and Medicare does not pay for long term health care.

The problem with qualifying for healthcare for the poor is that there is a requirement for “estate recovery.” What families will often find is that all the wealth they have accumulated over time will vanish, not because of taxes, probate, or even bad financial decisions.  It will disappear because of a medical condition and the lack of adequate planning.  Such tragedies are avoidable.

I have written about Medi-Cal specifically here and how it applies to older adults.  Estate recovery and long term health coverage involve state-specific rules.

Charitable Planning 

For many families, giving to charity is a family affair.  Parents often want children to be involved with their charitable giving legacy.  They want their children to help select charities, be interested in the causes and perhaps continue giving charity well into the future. If you have parents who are passionate about charitable giving, you should embrace this and help them with their legacy of giving.

There are rules on charitable giving in Islam; for example, the Wasiyyah is limited.  Charitable planning often increases family wealth when done correctly.  This fact might surprise you.  Often the result can be quite dramatic.  I have written about this previously.

Evaluating options for long term charitable planning as a family is an investment more should consider.

Probate

Estate Planning does not generally benefit the person doing the planning.  There are cases where this happens, but that is usually not why people do it. People plan their estates because they have loved-ones and things they cannot take with them.  If your parents don’t worry about such things too much, likely, you cannot do anything for them.

Probate is a judicial process when you need a dead person’s signature to transfer property to the living. Because dead people cannot sign things, you have a judge and a legal process deciding what happens.  A whole lot of what drives estate planning, not just for Muslims but for everyone, is to avoid this process.  Probate is one primary reason why people plan with living trusts.  However, a living trust (or any paper with things written on it) is by itself not useful.  What matters is how it benefits the people you love.

Incapacity Planning

Regardless of your age, if you have assets, you should have a plan in place for deciding how to manage your affairs in the event you have lost “executive decision-making ability.” The most common situation here is when people become more amenable to scams but deny to close family members that there is a problem.

I recommend creating a shura to resolve these issues.  To learn more about that, click here.

The surviving spouse and remarriage

We plan for justice and care when it comes to children’s inheritance.  We also want the surviving spouse to continue to live in dignity.  There is a whole lot to consider here.

Another thing to consider is what happens if the surviving spouse gets remarried.  I know men who got remarried after their spouse passed away and have had children in their 70s and 80s with women significantly younger than their daughters. Some older adults laugh at the possibility their spouse would get remarried if they die.   You know your spouse now, but you don’t know your spouse after you are gone.  Assuming knowledge of the future is silly, though, this is a common malady among human beings.   Fortune-telling, as an estate planning strategy is a recipe for injustice.  I have written about the remarriage issue extensively.

Family Business Succession

People often like the idea of passing a business on to family members.  Some children are not interested in the family business.  Often business succession is not an inheritance issue, especially if they plan it out over many years.  Some parents have more trust in some children and not so much in others.  That may lead to perceived inequities in the transfer of wealth and long term family conflicts.  Transferring a family business can often be a fraught subject.

While Islamic Inheritance rules are great when it comes to the distribution of inheritance, these rules by themselves don’t address all potential conflicts.  The family needs to have a strategy, not just to reduce taxation and transfer wealth, but to do so in a way that maintains harmonious relationships within the family.

Disinheritance

When a parent feels the need to disinherit a child, it’s an emotional moment.  In nearly every instance, Islam prohibits this.  The only situation where this will legitimately happen is when the adult child is not Muslim.  Parents may want to disinherit their children for the wrong reasons or because the Sharia mandates it.

There is a risk the parent will do an injustice to someone or another.  If the parent gives an inheritance to someone not entitled to it in the Sharia, that is an injustice to other children.  Denying someone inheritance rights ordained by Allah is also an injustice.

Often in these situations, the parents are not in touch with the adult children they are considering disinheriting.  What they know about the child may have been from an unpleasant conversation from many years ago, from social media posts or second or third-hand information.

The role of the children who have a relationship with their parents is vital here.  It is easy for parents to be sad and troubled. 

Girl’s Inheritance 

Many parents feel as though their children will think Islamic inheritance rules are unfair to daughters and, thus, will be unhappy.  Often, they don’t know this, but could easily project such views on others, especially their daughters, who likely don’t have any problem with the command of Allah.

When it comes to advise on Islamic Inheritance, this is often the elephant in the room. It’s best to introduce it and come up with a solution that would be in keeping with Islam and address any concerns members of the family have about this split.  I have written about this issue several times, but as far as solutions go, you should check out this article.

Do the Right Thing

 You should not shy away from encouraging your parents to do the right thing.  Often, its easier to avoid tension and drama and just ignore things that cause it.  If you spend time with your parents and talk to them, these issues will come up.  Your parents will bring them up.  You should approach them with the wisdom and knowledge you can muster.

To schedule a 15-minute no-obligation video conference, click on this link.

To schedule a 90-minute Islamic Estate Planning appointment, click here.

We have a series of frequently asked questions on the Islamic Estate Planning Process as well.  Please feel free to share this article to anyone you feel may benefit.