When I speak about Islamic Inheritance, or when people ask me a question, they often ask a variation of “Can Islamic inheritance work in our courts?”. Another version of this question wonders what happens if someone challenges the Islamic Rules of Inheritance: say, for example, a daughter who gets less inheritance than a son can go to court and challenge this.
The answer is complex and fact-specific. This should never prevent someone from planning based on Islamic rules. Only understand that a lawyer can never offer certainty or guarantees about anything, and there is usually nuance even in questions that should seem simple.
Let’s draw out a hypothetical:
Abdullah has two children, Haris and Ishaq, both boys. Haris, to Abdullah’s great disappointment, has left Islam. As a result, he is no longer entitled to inheritance in Islam. Abdullah has an Islamic Living Trust, but he decides to disinherit Haris, which means he writes that Haris will get nothing in his living Trust.
Haris can sue after Abdullah dies. If he wins or not is another question. If Haris can prove that Abdullah lacked the legal capacity to write his living trust or will, or if there was fraud, duress, menace, or undue influence, Haris may win if he has evidence. Even if he fails, the mere act of litigating an estate in court is a loss.
Abdullah can prevent this by doing a couple of things. The first (in some jurisdictions like California) is that he can go to court, giving Haris notice, to preclude challenges after he passes away. The second is that he can write a no-contest clause. However, the “no-contest clause” is useless in this specific case.
What a No-Contest Clause Does
To simplify, the no-contest clause says that if a beneficiary contests aspects of the estate plan, the beneficiary will not get anything. Now, if a beneficiary is getting nothing, there is no cost to contesting the plan. Abdullah’s successor, Ishaq, may want to settle with Haris by paying him something, or he can take the case through trial and potentially years of appeals.
Another possibility is that Abdullah does not disinherit Haris completely. Instead, he gives Haris a “wasiyyah” (Haris is still not entitled to inheritance in Islam). He still does not get what Ishaq gets, but if Haris feels like litigating, he has something to lose: the wasiyyah amount.
What About Contesting Shares with a No-Contest Clause?
Okay, now let’s assume Abdullah has a son, Ishaq, and a daughter, Firdaus. Firdaus is Muslim, but she does not like getting half of what Islaq is calling and wants to sue? What happens? Firdaus needs grounds to challenge the estate plan. However, the successor Trustee of the Trust will need to expend a portion of the estate on attorney fees to defend it. Abduallah has testamentary freedom. If he wants to plan based on his religious beliefs, he is free to do so, which is his right. However, if Firdaus can claim about Abdullah’s capacity and get a Judge to agree with her, she may win.
So, this gets us to the no-contest clause. If there is a no-contest clause in Abdullah’s estate plan that says Firdaus would take nothing if she sued, that would be harsh. Firdaus is Muslim, and she is entitled to inheritance in the Quran. So, can she be penalized if she comes up with a spurious challenge to Abdullah’s estate plan?
What if Firdaus Just Wants Her Rights?
I believe a no-contest clause should not apply if all Firdaus wants is her rightful share of the inheritance, and if she has a challenge related to that and brings it through arbitration, there should be no penalty. So, if she is contesting the valuation of an asset being distributed and claiming the allotment is less than what she should get, she should be able to do this. Another possibility is that even if Firdaus goes through with a spurious lawsuit against her father’s estate, she still not be denied inheritance outright. Instead, any cost of litigation should be charged to any share she would receive.
So, if Firdaus is entitled to $500,000, but the Trust had expenses of $250,000 successfully defending against a lawsuit by her that went on for two years, the distribution to Firdaus would be $250,000.
What About Challenging things other than distribution?
Beneficiaries challenge estate plans for many reasons. They may be okay with the plan’s substance, but they don’t like how the successor trustee handles things. Should we penalize beneficiaries for challenging this?
My preference is to find alternatives to litigation. This includes mediation, arbitration, and a trust protector. However, the denial of inheritance to someone entitled to it in Islam is a serious matter. I would avoid drafting in a way that would do that whenever possible.
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