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A Guide to Replacing your Wife

August 31, 2018 By Ahmed Shaikh

Women Mourn, Men Replace

The adage “women mourn, men replace” is one of those things I came across as a lawyer going to lawyer events. It’s a truism. We usually expect that if the wife dies first, the widower will remarry quickly.

I’ve seen it happen many times in my law practice. A man loses his wife, and then he gets married. Typically, within one year. A New York Times article indicated the average wait-time for men is about 2 ½ years. It may be quicker for Muslims men though, particularly those who want a halal relationship. Now, of course, women can get remarried as well. It’s just that they often do not seem to be in a big hurry to get remarried.

If you are married, you know your husband, your wife in a particular context. You are a big part of that context. You don’t know what your spouse would be like without you as the context. If I bring up the subject of remarriage a wife might say something like “Remarriage? Seriously? Who would marry him?” Probably lots and lots of women. It’s not that hard.

So what if they do remarry?

Of course, remarriage should be encouraged. It’s a good thing when two people, regardless of their age, find companionship and love and forge a path together. There are two major problems though. The first is accidental disinheritance, and the second is just generalized fitna.

Now the “accidental” disinheritance is easy. I wrote about it in my guide to Islamic Inheritance. It is the Cinderella backstory. Parents don’t think about the issue and don’t worry too much about the possibility that their children may become orphans.

The other part is generalized fitna. Fitna happens when there are older children. It is relatively common for re-marriage to result in cut off relations or toxic relationships, because a new wife, almost universally referred to by the children as “that woman,” will be viewed as a threat. They might be considered gold-diggers or worse. If she comes with her adult children, and if the families do not seem to mesh, things can get even worse.

So what to do?

I have a few practical steps that families can address that can hopefully reduce the level of potential fitna in a family. Those steps can come both before any remarriage happens because both spouses are alive and neither knows who will go first and of course after death has already taken place and remarriage is about to happen or has already happened.

Initial Planning

One of the most important things to do is specify in writing what property belongs to the husband and what property belongs to the wife. Most people don’t bother doing that. Spouses own everything together, and everything goes to the surviving spouse. Remember, each spouse is his or her economic unit and has “stuff” that is specific to him or her.

Protect the Children

Do not assume that the surviving spouse will always look after the interests of the children at all times and in all situations. What a man is or is not is in large part dependent on his wife. Don’t assume that he will always be married to you. While the wife of a widower is often given a bad rap in popular culture and adult children often mistreat them I can say with some experience, some of them are villainous. Brilliant men often cannot tell the difference between a virtuous potential wife and one that is, well, not so much. Remember, they are usually in a huge hurry to get married again and are often not as particular as they were the first time around.

The way to best protect the children is to make sure your assets are either distributed to your heirs right away after your death or distributed to a trust they are beneficiaries of, in proportion to their rights in Islam. Don’t compromise on rights.

Don’t Marry an Enemy

My professional advice mantra: The best Estate Planning advice is not to get a good lawyer or do a living trust or anything like that. It is “marry wisely.” Even the best most brilliant plans can often not make up for a bone-headed nuptial decision. Remember, according to the Quran, wives can be your enemies. Don’t marry an enemy.

Do background checks. Check out not just the prospective spouse, but family members, including children. They are all going to be players in this drama. Know who they are. I had a case where a smart, successful man ended up marrying into a family of professional grifters, found his criminal wife from a “wrong number” call. After she and her family stole millions, you start to wonder what he was thinking. He was not.

Hopefully, you won’t go into a business partnership without checking out the background of your business partner. Did he rip anyone off before? Has he been to prison? For marriage, often people don’t bother to check. There is such an immense need for companionship that these little details usually don’t matter. Sweat the details. Your family will be the better for it.

Consider not officially getting married.

I have seen people, especially the elderly, so fear the reaction of their adult children that they end up getting “confidential marriages.” Don’t let the term fool you. In California, confidential marriages are legal and fully enforceable. You cannot look up these marriages in a public database. Confidential marriages can often be used by scammers to commit elder abuse against the elderly.

Don’t do crazy things like confidential marriages to avoid judgment from your adult children. However, it is true that children do see marriage as a threat, Moreso when we age. However, there is a way to make it not a threat. In Islam, you don’t need to get officially married. Do a nikah. You can also do something called a “cohabitation agreement” that sets out the rights of the parties involved. There would be no community property and no joint ownership of anything for example.

Prenuptial Agreements

Often prenuptial agreements are an obvious solution. Be clear from the beginning that marriage is not meant to be a financial partnership that would be disadvantageous to one party or another and certainly not for the children. It should also have provisions that protect the children and their rights.

Control Business Arrangements

One of the concerns in the family is when there is some financial disparity between spouses, and one spouse engages in a business partnership or loan arrangement with another spouse. I would strongly caution against this because for some family members; this can often wreak of exploitation or of taking unfair advantage. However, it there is going to be some business arrangement, it should be an “arm’s length transaction.” It depends on what we are talking about exactly, but in some cases, it may make sense to bring family members, outside lawyers or other third parties involved. The object of all of this is to avoid fitna. Financial transactions among family members can often lead to serious fitna.

Consider a memorandum of understanding.

Some second wives will develop a vice grip on their new husbands and isolate them from the rest of his family. This kind of thing does not happen immediately, but often over time. Other times, there is mutual hostility that develops, and it may be the adult children’s fault. To avoid problems, make sure you have principles, rules of engagement. Rules may include regular visits, no cutting off family ties under any circumstances, how money or the family business is dealt with and so forth. It may be necessary to arrange to facilitate this kind of agreement through a professional team. The benefit of this, however, is that there are always rules that families can refer to that will both reduce risk and provide a roadmap for solving problems.

Think about the end at the beginning

Look, being an adult is hard. Contemplating loss, actually losing and then starting over, often in a massive hurry, can take an emotional toll. Before every journey though, you should plan. You are always at the beginning point of someplace leading to another. You need to think about the repercussions of what you will leave behind. A widower in a mad-dash to get remarried may be one of those things.

Security for your assets

August 16, 2018 By Ahmed Shaikh

What is a false sense of security? We do common sense things to keep our possessions and loved ones secure, locking our doors and keeping passwords is a form of Asset Protection. But we know that in reality, if we ever had time to think about it, there are lots and lots of ways in which we, our property, our community, our planet and our own reality is insecure. Inherent insecurity is why we plan in the first place. So for example, we do Islamic Inheritance because we know there is nothing about our life that is secure. That creates instability for others, and we hope to fix that by doing the responsible thing, our estate planning.

You have some protection

I did not want to write about that kind of security though. But instead, the type that you seek when you want to make sure what you own is still yours when there is some calamity. Namely, there is a lawsuit of some kind. You worked hard for your home. What did you do to protect it? How about protecting your business? Your retirement plan? Your rental property? What if one liability seeps into another thing?

Now some of these things may be more simple than others. A retirement plan may have some built-in asset protection from The Employee Retirement Income Security Act of 1974 (ERISA). You might not think of thought about some forms of asset protection you already have. For example, say Mustafa owns Apple. If is Apple itself sued (it happens all the time) nobody is coming after Mustafa’s home as a result of his ownership in Apple stock. Mustafa only risked what he invested to by Apple stock. His biggest risk is that Apple shares may become worthless.

There are many things that you can do for Asset Protection. One of the most obvious ones is the Limited Liability Company. I recently wrote a comprehensive guide to LLC and I don’t want to repeat that content. Feel free to check it out.

Treat it “Security” like a verb

Real estate owners often use LLCs, but it is also used for operating a business and a wide range of other assets. The kind of protection you get from an LLC varies widely. Much of it has to do with things like (1) the operating agreement (2) the jurisdiction the LLC is in and the most important one (3) how active and vigilant the owner is in managing the LLC’s business and legal affairs. I would like to say the third one is what trips people up the most (and that maybe is true). However, you would be surprised as to how frequently the other two things do as well.

The LLC should be a verb. It requires active vigilance. Otherwise, there is a risk “judgment creditors” will say that the LLC is just an extension of yourself. This allegation called an “alter-ego.” It would be like you don’t have an LLC at all and whatever you did to protect your personal, non-LLC assets would then be at risk. It is true that there are fewer required formalities in an LLC than a corporation. This is often this is cited as one of its advantages. However, it would be foolish not to follow a set of robust formalities.

Gifting to Children and Protecting them

For many Muslim families, another advantage of an LLC is that it makes gifting to family members easier. Many families, for a variety of reasons, want to give their children portions of their property to their children, while at the same time, maintaining control of the whole thing.

So say, for example, Hamid owns a four-plex. He places in a Limited Liability Company. Hamid wants to give 85% of the property to his daughters, for her future financial security. While at the same time, he wants to continue to control it, collect rents and maintain it without involving his children.

Hamid organizes the LLC so that it is the manager. He also keeps his voting rights. He takes steps, through ownership of the daughter’s membership units in a Trust, to make sure that in the event any of his daughters were divorced, sued or bankrupt, the property won’t fall into the wrong hands.

Handing over part of an LLC while alive is not an inheritance; it is a gift (or sometimes a sale) To go further than that, say protecting the interests from children’s potential future ex-spouses, you may need to be significantly more active in how you manage the LLC.

While no asset protection is impregnable, the benefits of common-sense measures to protect yourself and your family make perfect sense for some.

If you want to reach out to my office about Islamic Inheritance or an LLC, you can call (866) 403-5294 or contact us

Spain does not like Islamic Inheritance, and I have questions

August 3, 2018 By Ahmed Shaikh

Party like it’s 2010

Islamic Inheritance and Spain The problem with getting into the anti-Sharia discussion is that it makes us feel like we were back in 2010. Those were the bad old days of the conspiracy theory that Muslims were plotting to overthrow everything with “Sha-ra-yah” which was somehow bad. While the result of this was that some more Republicans were elected (and a bunch of horrible policy things that hurt a lot of people came into existence), one thing that did not happen was that Muslims in the United States was that Muslims could still practice their religion. They can still do their Estate Plans consistent with the Islamic Rules of Inheritance if they want to.

What you might be told

Muslims usually don’t do anything about inheritance, even though it is fard. But its relatively common for Muslims to not do things that are fard (like prayer, Zakat, Hajj). A minority will often do many of these things. There are of course Muslims who live in the United States who think that it may well be an obligation, but it is not possible to do. Why? Because they were told something by someone years ago and it just stuck. Because they went to a lawyer, who advertises living trusts and tells people the only thing they can do is what is in their template. I remember one lawyer who talked to me when he set up a practice in a heavily Muslim neighborhood, that he would start to offer Islamic Inheritance. I checked in with him later; he said he decided to steer his Muslim clients away from the Islamic rules. He tried to explain the concepts were too hard, because in California (where we are) we have community property, etc. That’s fine. Lawyers can sometimes convince people of all sorts of nonsense by uttering irrelevant and meaningless jargon. Preferably in Latin, like lex situs and Res ipsa loquitur and what were we talking about again? Oh, yes, Sharia in Spain.

Foreign Law

According to a report, in Spain, an agency in Madrid that administers property deeds for inheritance ruled that Article 12 of the Spanish Civil Code prohibits foreign laws that distribute inheritance unequally because they violate public policy. No anti-Sharia legislation in Spain caused this. It is a mainstream position that other laws don’t get enforced if it violates public policy. Say, for example, a man decided to write a will stating that after his death, he wants his successors to dig a massive hole right next door to a public children’s playground where trash will constantly be burned until the end of time. A court in virtually every state (I may have question marks on a few) will say this kind of wish violates public policy. They may have other legal reasons as well. Why is less inheritance for daughters, if that is the testamentary wish of a dead person, against public policy? Well, they are not saying that. Not exactly anyway, a point I will get to below.

Another thing that stands out in the Spanish case is that the daughters of the decedent accepted “without coercion” (because we have an orientalist frame to all of this) the “divine” (their word) mandate of Allah regarding inheritance. The women are being forced to own property and cannot give it away, because doing so is against public policy.

Wishes and Laws

A testamentary wish is not foreign law. Say a Muslim wants to be bathed after death and wrote that, or wanted to give less than 1/3 to charity in a Wasiyyah after death. Nobody will claim this is a foreign law that is within the bounds of foreign policy. What is happening here is that a person’s wishes are being interpreted as being compelled. Daughters had to assert they were not being coerced, the decedent was not given the opportunity to say this. An estate plan though is nothing more than a vessel for your values.

If you value sharia, you will implement it. If you value giving everything to the 14 cats in your basement, or a giant trash hole in the ground, you might do a plan to implement that. But why not say giving less to girls is against public policy? Why this nonsense about “foreign law”? Because non-Muslims use their testamentary freedom in all sorts of unequal ways all the time and for all kinds of reasons. Famously Warren Burger, the Chief Justice of the United States of America wrote a last will and testament that gave twice the share for his son than he did for his daughter. He followed Islamic law perfectly despite not being a Muslim.

This is not about protecting Women. If women, on their own accord, cannot give away their own property because of a religious obligation, is it really their property? This is, unfortunately about practicing a faith tradition. But then the question is, can this happen in the United States?

The US Constitution

It is true that in the United States we have the First Amendment, to the US Constitution, but it is also true that freedom to worship is in the Spanish Constitution as well. A lot of constitutions are fantastic, on paper. So don’t just let that be your guide. Decisions like the one in Madrid put religious freedom in that country in question.

In the US, the First Amendment, which as you might recall, guarantees free speech, press, assembly, petitioning grievances. Of course, it also provides for the freedom to exercise religion and preventing the government from establishing a particular religion. While none of these things are absolute and it’s not like Muslims in the US live in some sort of utopia. The First Amendment is powerful law.

Not worth anything unless you use it

Of course, law, or how it is interpreted, follows the social and political environment. I expect federal courts would be quick to invalidate any law that prevents Muslims from establishing their estate plans based on their values. If it was the case that some states went the Madrid route you can always do a living trust in any state with more of a commitment to religious freedom, I could not foreclose the possibility that things can get worse. But don’t ever let that stop you. Your freedom to worship, including inheritance, is meaningless to anyone that does not worship that way.

In the United States, you should feel comfortable exercising your freedom of religion.

If you want a resource guide on Islamic Inheritance, download it here. It’s free.

The Family Home

June 22, 2018 By Ahmed Shaikh

We talk about this all the time in Islamic Estate Planning: What to do with the family home?

About more than Inheritance

Estate Planning is about far more than the shares of inheritance when someone passes away. My goal is to create a simple process, though the thought that goes into it is quite complicated. One of the reasons it has to be complex and becomes more so as we age is because there are numerous competing interests inside families that you need to balance. A lot of these are competing interests that may reside in your mind simultaneously.

In the broader sense, the idea of Islamic inheritance itself is simple. You cannot take your worldly possessions with you. Shares get distributed from what you leave behind. That is almost the easy part, though of course, most people mess that up.

The harder parts include elemental things like what is your property in the first place since that is less than obvious. The other part has to do with dealing with sometimes conflicting and competing interests around your wealth and family.

There are several such areas. However, let’s focus on the house since that is what I promised to discuss.

Abdulrahman and Fatima and their family home

Abdulrahman is married to Fatima. They have three children together, Aisha, Hafsa, and Alam. His parents are deceased. So under the Islamic Rules of Inheritance, since Alam is a boy, he gets 7/16. The daughters, Aisha and Hafsa, get 7/32 each. His wife, Fatima, gets ⅛. Rahim’s biggest asset is his house, which he purchased before he married Fatima and is his alone. Abdulrahman and Fatima have about $50,000 in savings between them, and the house itself is worth $600,000.00.

Abdulrahman wants his wife to have the house, then have it go to his children based on the Islamic Rules of inheritance after he dies. Can he do this?

Well, the short answer is that his wife cannot just take the whole house herself as inheritance and have it still be an “Islamic” plan. She is entitled to ⅛ of the estate, and the value of the home is worth more. The idea that it will eventually pass to the children is flat out not good enough. Fatima may live for decades after Abdulrahman passes away. She may outlive one or more of her children. Fatima may get remarried; adding to additional complications, she can also get sued or go bankrupt. The main reason she cannot have the entire house is that the children are entitled to shares in the Sharia.

Owning the family home together

So this brings us to another possible solution. Fatima can own a house together with Alam, Hafsa, and Aisha after Abdul Rahman dies. So, in this scenario, the house is split apart by deed, with all four people owning the family home as “tenants in common.” If the shares are correct in Islam, the form of ownership is not a problem. The problem though is that it is not really a secure home that Fatima can reliably live in through her old age.
Owning a home with children is, as you might imagine, dangerous. Children age. Their lives get increasingly complicated. We are not just concerned about Fatima getting married or bankrupt or sued; we have similar concerns for all three children as well since any of these things happening can result in Fatima potentially losing her ability to continue to live in the house. So we don’t divide up the house.

One additional solution and I emphasize this is only a solution for some people and may be inappropriate for others, is to split apart the ownership and “equity” in the house. We do this through a combination of trusts and other arrangements. This formulation contemplates inheritance not just as cash, but as beneficial ownership in the property. The goal is to protect the inheritance of the heirs, while at the same time, it allows for the surviving spouse to continue to live in the home.

Like a Business

This type of arrangement is similar to creating a business partnership or other business entity, which is another way we can distribute inheritance. However, we do this for the family home.

Such an arrangement can be flexible, allowing for families to fulfill their If one of the children wants inheritance in the form of cash and that cash is available, the Trustee of the Trust can write a check. There is also the possibility the surviving spouse sells the house before he or she passes away, resulting in a cash distribution. The most likely situations where this happens is if the surviving spouse gets remarried (and thus moves to another home) or leaves the geographic area.

Different features in Estate Planning come with both opportunities and risks. How we develop them is about balancing different interests and goals. Unless everything is getting sold off and distributed after death, you have some level of complication. Family businesses, real estate, and other assets can cause problems. The family home is a common concern.

Control is always an issue. Control leads to the possibility of oppression. We worry about abuse in some families more than others, though we never know what the future goes. That is knowledge of the unseen.

This process, estate planning, is more about people and relationships than it is about lawyers and documents. Those things are, and you really cannot do the half-way decent plan without them. We always try to focus on relationships, the planning follows. This is for the family home and everything else.

Before you leave, get our free resource guide on Islamic Inheritance by clicking here.

Muslim Prenuptial and postnuptial agreements

June 7, 2018 By Ahmed Shaikh

Muslim Guide to Prenuptial Agreements

Why are we discussing prenuptial and postnuptial agreements? I often tell people my best Estate Planning advice, more important than getting a good lawyer or doing a living trust or really anything at all, is this: Marry wisely. It is perhaps the most critical decision you will make. It amazes me how often people don’t think through the implications, or they don’t have the right people in their universe there to tell something is a bad idea. Too often, it is a bad idea. It’s just not enough to say marriage has a high divorce rate. For those previously married, the divorce rate can be as high as 80%.

But people marry hoping for the best. You don’t look at someone you want to spend the rest of your life in a manner that is suspicious. Marriage is a relationship of trust after all. At the same same, if you are a grown up and have lived and breathed for a few years, you don’t want to be nieve either.

Prenuptial and Postnuptial agreements are Similar to Estate Planning

Prenuptial and postnuptial agreements are similar in some respects to Estate Planning. In the event of estate planning, you are trying to change lousy default circumstances, like the way you own your home or the state intestacy statute, into something that better fits your values. If you are Muslim, you want it to be done consistently with Islamic Inheritance. When it comes to prenuptial or postnuptial agreements, you are trying to get a set of laws, parts of the state Family code, not apply to you by creating your own rules.

There are limitations to this sort of agreement. Certain things may not be binding. That may include things like some support or child custody issues. But that does leave open lots of problem-solving opportunities.
Being married without being “married.”

It would be a mistake for me not to mention the possibility that you can marry in Islam without being married under state law. Couples do this all the time. Of course, you want to make sure that you have exactly the rights that you want from the marriage if things don’t work out.

Adult Children

Hafsa is 67 years old. She has been widowed for ten years. Hafsa also has three adult children as well as some property. She married Abdullah, a 70-year-old man who has been a widower for one year. He also has adult children. Adult children typically see marriages such as this as a threat. They would like to show that it is not a threat to them and that money has nothing to do with this relationship.

They both sign a “cohabitation agreement”establishes the relative rights and responsibilities of each person. It also makes clear that there would be no common property ownership, no community property, no joint bank accounts and so forth. They also do their separate Estate Plans that list each other as beneficiaries, but based only on the rules of Islam, meaning that if Abdullah dies first, Hafsa gets no more than ⅛ of his estate, and if Hafsa dies first, Abdullah gets no more than 25% of her estate. They make sure they keep their children in the loop as successor trustees in the event of either death or incapacity. You do this through an incapacity plan.

The benefits they have from doing this include:

There are no complications that come with marriage under the family code.
They protect the relationship with adult children.
Protection for themselves in the event of attempts at elder abuse or alienation from their families.
Inheritance is consistent with Islamic rules.

Starting out in life

Adil, 22, wants to marry Zarina, 21. Neither of them has any assets on their own and plan to rent an apartment together near the university where they both study. They both plan on being in well-paying professions when they graduate, however. Zarina’s parents Abid and Aisha, do have some substantial assets. Abid and Aisha would like to make sure that anything Zarina gets would be for the benefit of Zarina.

The parents do not want Zarina’s assets, including any gifts they give her, as well as any inheritances, co-mingled with Adil’s assets. Abid and Aisha are worried in the event of divorce, Adil may end up with with a significant amount of the family’s wealth. Zarina’s parents are also not wholly content with Adil just yet. They think the marriage is risky for Zarina and would like to do something to protect her.

Community property does not, by default, include gifts and inheritance. So if Zarina’s parents want to give something to her, it does not mean that half of it automatically goes to Adil. As a practical matter though, it often works out that way.

Abid and Aisha have a couple of different options. These are not mutually exclusive (they can do both):

To protect Zarina, it would make sense to encourage a prenuptial agreement. She and her family have more of an ability to negotiate the terms of any divorce before the marriage than they would after it has taken place. So they can address issues like support, mahar, and determine what property would be “community property” and what property would be separate.
They can do their estate plans, which may include a plan for both inheritance and gifting. An Estate Plan can be done to protect their daughter in the event of divorce, or in case there are efforts to exploit Zarina’s future wealth.

The Second Act

Firdaus and Alam are both divorced. Both want to marry each other. Both are wounded from their prior relationships. Neither wants to go through another painful divorce that costs them immense sums of money. They both have a child each from their prior marriages, but are still young and want to have more children if possible. They both have some assets from the time of their previous marriages.

Firdaus and Alam need to negotiate the terms of their marriage. There is no established way of doing this. However, they would likely want to keep their property separate, perhaps owning one community property account to share expenses.

To do a prenuptial agreement, and this would be the case in all situations, it is necessary to do it in a way to make sure it is enforceable. Prenuptial agreements are considered by the law to be presumptively coercive. Courts may be inclined to think whoever it getting the short end of the stick in a prenuptial agreement was essentially forced to sign away their rights. It is a paternalistic system. A prenuptial agreement is no ordinary contract.

Firdaus and Alam will need to get their separate attorneys who are independent of each other. They will need to negotiate an agreement as an arm’s length transaction. There will also need to be a waiting period to demonstrate they both had the time to read the contract. Preferably, there would be a record of redlined drafts.

Talking about it

Prenuptial agreements are difficult to discuss. The problem is that it goes against our ideals. There is generally a lot of hope and a whole lot of fear that the dream can quickly fade if you only bring up the possibility that the marriage may not work out.

I understand that. However, if you are getting married, know that your marriage will end. It is not a matter of if. You either leave your marriage horizontally or vertically. Don’t think of this sort of planning as only planning for divorce. It’s often about the same thing Estate Planning is for: taking care of those you love.