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.
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.
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.
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.
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.
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.
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.
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.
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.
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.