In the Name of Allah, the Most Gracious, the Most Merciful

Australian and Islamic Laws

of Succession
Wills under Islamic Law
- A brief outline

© Iqbal Lambat
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Australian Law
• Freedom to distribute assets to whomever
• HOWEVER: Due to abuse of freedom – Aus law now
allows a spouse/child/dependant to challenge a will in
court if insufficient assets left for them to maintain
themselves
• Court will consider size of estate, relationship and
financial needs of claimant, etc
• Can set conditions for inheritance – example marriage
• Where there is no will: Each State and Territory has a
formula (similar to each other) for the distribution of
estate – in most cases spouses and children benefit
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Islamic Law
• The Almighty, in the Quran, clearly articulates who can inherit
The Quran states:
• “There is a share for men from what parents and near
relatives have left, and a share for women, whether the
property be small or large, - a determinate share.” (4:7).
• “To (benefit) everyone, We have appointed shares and
heirs to property left by parents and relatives.....” (4:33).
• The Prophet (PBUH) decreed that a person has freedom to
distribute a maximum of 1/3 of his/her net estate
• Therefore limited freedom
• Importance: Quran stipulates shares for each heir.
No reference to number of rakaats or zakat % in Quran

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As an Australian Muslim
• You have a choice:
• Not have a will – estate distributed in accordance with
State and Territory laws which determine who will inherit
(does not comply with Islamic law); or
• Have a will & exercise your freedom under Australian law
to distribute to whomever you please (subject to possible
litigation should spouse/child/dependant be left out); or
• Have a will that applies Islamic law

• The Quran promises a reward for those who obey.

• The Quran and the Prophet (PBUH) warn of the
implications of not distributing your estate correctly

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Under Islamic law you need a will
• Both the Quran and the Prophet (PBUH) state that a person
should have a will:
“It is prescribed, when death approaches any of you, if
he leaves any goods, that he make a bequest….” (2:180).

The Prophet (PBUH) is reported to have said, “it is not

permissible for any Muslim who has something to will to
stay for two nights without having his last will written and
kept ready with him.” (Bukhari, Abu Dawud and Muslim)

• In a country that applies Islamic law:

A will contains details of off-balance sheet debts and any
distributions you choose to make up to the 1/3 you have
freedom over
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As an Australian Muslim

• As an Australian Muslim you need a will:

• To outline any off balance sheet debts due by or to
you
• To outline any legacies you choose to pay (up to 1/3
maximum of net estate)
• To communicate that the remainder of your estate
will be distributed in accordance with Islamic law of
succession
• By doing the above you exercise your freedom under
Australian law to chose how your estate will be
distributed
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Your Will needs to be correct
• Your will is the most important document you will write –
you cannot change it after death
• Get it wrong = Potential: family conflict, liquidity crises,
loss of property through executor negligence, inefficient
taxation, litigation
• Most cases: wills prepared prior to a journey or prior to
medical procedure. Not the time to do it – Rational
thought low
• Make sure you understand your will – too much legal
jargon = ditch it! You need to be certain that your wishes
are correctly captured in the document

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Distribution

Pay Funeral Costs (these should not be „excessive‟)

Pay all debts (fundamental in Islamic law)

Pay Legacies – up to maximum of 1/3 of estate after

paying all debts

Residue distributed in accordance with Islamic law

Can include unpaid zakat, fidya, etc under either debts or
legacies (only difference between schools)

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Legacies
• Prophet (PBUH) decreed that a person has freedom to
distribute a maximum of 1/3 of his/her net estate
• Commonly referred to as a legacy
• You cannot distribute more than 1/3
• If you do, the adult „sane‟ heirs can elect to carry out
your wishes – but out of their share of the inheritance
• You should not use the 1/3 to beneficiate your heirs
• If you do, it is only valid if all the heirs agree to it (some
scholars are of the opinion that it is not valid)

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Shares (Simple)
• Quran stipulates who will inherit.
“[Between] your father and sons, you do not know who
is nearer to you in benefit. Allah is Most knowledgeable
and Most wise.” (4:11).
• Basic principle: A person qualifies through a blood link or
marriage

* Mother receives 1/3 if less than two brothers or sisters.

Does not mean brothers & sisters inherit – a father will
exclude.
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Persons you need to appoint in your will

Witnesses:
Ideally, two Muslims. People of the Book can witness under
some circumstances. Preferably not a person who is benefiting
under the will.
Executors:
• Muslim
• Be careful – this is a major role – appoint a competent person
– not just your friends
• Person you TRUST (business and ethics)
• Takes control of assets and distributes them
• Can have more than one person

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What your estate comprises
• All tangible assets – property, furniture, jewellery, personal
effects, bank accounts, shares, business assets, clothing,
etc
• Intangible assets – goodwill, rights
• Superannuation
• Insurance (some of the view accrues after death)
• Assets held in a trust (gets complex)
• Joint tenancy assets
• Debts
• Spouse‟s assets do not belong to you
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Assets
• Make sure each spouse has correct ownership in
assets
• Is your spouse effectively your partner?
Does the ownership of assets reflect this?
• Clearly specify who has ownership over common family
property – example furniture, kitchen utensils
• Need to sort out the above to avoid potential costly
litigation if will is challenged
• Assets need to be valued at market value
• Assets need to include fair value of intangibles:
goodwill/brands

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Home
Type of
On Death Islamic Law
ownership

Joint Tenants Surviving spouse Not permitted.

inherits – by-pass Deceased
Default position
will. Good estate spouse‟s
on purchasing
planning tool if beneficiaries
property jointly
used correctly must inherit
with spouse
Tenants in Common Deceased‟s share OK.
included in estate Complies
Need to elect this
option
Joint Tenants similar to SA Community of Property

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Superannuation

Beneficiary On Death Islamic Law

Surviving By-passes will Problem

spouse/children
Who have you
nominated?

Deceased estate Controlled by will OK.

Complies

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Trust Assets
• In Australia trusts are a great tax mechanism
• Also a good generation skipping device
• Under Australian law trust assets do not form part of your
estate (unless you are a fixed beneficiary)
• If fixed interest trust – can be argued that property
distributed during lifetime
• If discretionary trust – who determines
ownership/distribution?
• A number of options available to ensure distributed in
accordance with Islamic law and still protect estate plan

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Will Templates
• Will template designed to comply with Australian and Islamic
laws
• Template includes arbitration clause
• Template affirms belief in Islam and request for beneficiaries
to respect choice and not challenge will
• Executor and Trustee powers
• Two versions exist – simple and complex
• Copies available for free
• Do not support use of such forms as it detracts from planning
and consideration of family dynamics

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Challenging a Will
• Usually for a challenge to be successful the person
challenging your will must have been reliant on you for
financial support and in the opinion of the Court, is still in
need of financial support over and above what you have
provided for them in your will.
• Option – transfer assets to a trust and distribute from trust.
Popular in North America
• Template contains specification that will must comply with
Islamic law and that will should not be contested.
• Judge‟s perspective of Islamic law contained in Quran?

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More Information

In an Australian context:
• Australian and Islamic Laws of Inheritance:
• Part 1 – Drafting a will and estate planning tips
• Part 2 – What should be included in your estate. How to
deal with trust assets, superannuation, insurance, etc.
• Part 3 – Shares stipulated in the Quran
• Part 4 – How to wind up an estate
• Books available free
• Contact me at: lambat.trust@bigpond.com (info only)
• Will templates available free of charge

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