Wakaf

Legacy Planning

Legacy planning is about making arrangements for your assets that will be left behind upon your death. Other than leaving behind wealth for your loved ones, legacy planning for Muslims should ideally include planned giving for beneficiaries beyond your family or as sadaqah jariyah for your hereafter (akhirah).

You can establish your planned giving through several ways. According to faraidh laws, you can give away up to one-third of your assets to beneficiaries other than your rightful inheritors. Out of this one-third, you can create a Wakaf or make infak donations to beneficiaries and pious charitable causes.

Below are some legacy planning tools that you can use to set aside assets for planned giving and Wakaf creation.

  • Wasiat
    This is a legal document that you sign while you are mentally sound to express your wishes on how one-third of your estate is to be distributed after your death. It can also include the name of your appointed executor who will distribute your assets according to your wishes. You can use your wasiat to create a Wakaf.
  • Hibah
    Hibah is a gift in physical form (such as cash or property) and is generally used to honour someone. You must arrange for this while you are mentally sound.
  • CPF nomination
    As a CPF member, you can specify who will receive your CPF savings and how much each nominee should receive upon your death. Find out more about making your CPF nominations.
  • Insurance nomination
    Nominations on your insurance proceeds are not subjected to faraidh laws. Contact your insurance provider on how to make your nominations.
  • Property Ownership

      • Joint-Tenancy
      This is a form of ownership where all co-owners have equal interest in the property, regardless of the individual owner’s contribution in purchasing the property. In joint-tenancy, there is a right of survivorship. This means that when a joint-tenant passes away, their interest in the property will automatically be passed to the remaining co-owner(s), regardless of whether the deceased joint-tenant has a written will or rightful inheritors under faraidh laws.

      • Tenancy-in-Common
      Tenancy-in-common is a type of property ownership where each joint tenant holds a separate and distinct share in the property. An owner’s share in a tenancy-in-common contract becomes a part of his estate upon his death.

    Read the fatwa on tenancy-in-common and joint tenancy.

  • Deed of Family Undertaking/Agreement
    This allows a beneficiary mentioned in a will, or a legal beneficiary to redirect their benefit to another person of their choosing.

Find out more about faraidh laws.