Islamic Estate Planning is a fixed proposal for the management and outlook of an individual’s assets throughout their life and upon their passing, created by means of existing Islamic estate planning tools, e.g Fara’id (Inheritance), Wasiyyah (Will), Hibah (Gift) and Waqf (Endowment). In this edition, we will be discussing Islamic Estate Planning in respect of Jointly owned Property.

Joint Ownership of Property

Joint Ownership is known as Sharikah or Shirkah, where more than one person shares ownership upon a property as co-owner. After the death of co-sharer, his share will be inherited by his heirs.

Joint ownership of property implies that there are two or more persons who contributed resources to purchase and own title to a property for residential, commercial, or industrial purposes as a way of resident or jointly inherited or jointly gifted.

Islamic Estate Planning of Jointly Owned Property

In a scenario where Mrs. A loses her husband and wants to know what her inheritance will be in joint property, she owns with him in the absence of a Will.

• Will she inherit the entire share of her husband or does she get 50% of her share in the jointly owned property, plus one-third of the share of her late husband?

• Will the children inherit the remaining two-thirds share that belongs to her husband?

Islamic Law Approach

In order to determine the share you would be entitled to, upon the death of your husband, in the property held jointly by both of you at the time of his death, it would be important to first determine whether the property was held jointly.
 
Under Shariah Law, the property owned by you and some other person(s) can only be distinguished by evidence to that effect. In the absence of evidence, those properties are considered the property of whomever they are registered under the name. If the properties are registered in your name and that of your husband (Joint ownership), this means the property is owned by both of you.
 
If for instance, there is a claim by one of the beneficiaries that you do not have a joint ownership agreement, and the properties are registered in your husband’s name but you truly owned the property with him, for you to claim joint ownership, you have to produce evidence supporting your claim, or else, the property would be taken to be that of your husband.

Ibn Abbas reported the prophet to have said that:
“were people to be given everything that they claimed, men would (unjustly) claim the wealth of and lives of (other) people, but the oath must be taken by the defendant (in the absence of any proof against him)”

The above Hadith is of the view that a person’s mere claim should not be simply accepted. It must be supported by evidence or the defendant’s endorsement.

On the other way round, if there is no evidence proving your claim and the beneficiaries do not endorse you, then you are entitled to whatever has been registered under your name from the deceased properties and that should not be included in the estate. In addition, you would be entitled to 1/8 (one-eight) of the properties registered under the deceased name.

What does this connote?

In opposition to common law principle, whereby in a jointly owned property, one inherits the share of the other directly after his death. The reverse is the case under Islamic Law. Under Islamic law, if you jointly own property together with any of your relatives or any other person, when he or she dies, his heirs will be entitled to a proportionate share of his portion of the property.
 
However, in order to clarify any ambiguity relating to any property owned jointly with another person, it is advisable to plan your estate, that is undertake proper Estate planning.
 
The essence of Islamic Estate Planning amongst others is to plan for possible contingencies in relation to your assets vis-a-vis the available beneficiaries and to ensure there are no contention or dispute relating to assets when they are held jointly with others.

Are you planning your estate?

Fiduciary Services Limited Limited offers Islamic Estate Planning services, the natural burden associated with having to plan and provide for loved ones can be professionally handled by us. You can contact our Islamic Estate Planning Advisors via contact@fiduciaryservicesltd.com for more inquiries.

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