Mawarith – Introduction to Islamic inheritance 03 – With Yaser Ali
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Channel: Hatem al-Haj
Series: Hatem al-Haj - Mawarith - Introduction to Islamic inheritance
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AI Generated Summary ©
The speakers discuss the challenges and opportunities for estate planning in the US, including the need for more research and education to ensure the distribution of estate proceeds. They stress the importance of avoiding negative behavior and creating a mechanism for disputes and prevent future problems. The speakers emphasize the need for legal binding obligations, setting up a fight to avoid future problems, and avoiding risk of failure and building a stable income. They also touch on the history of HIPAA laws and the potential for legal arbitration.AI Generated Transcript ©
Calamba that I gave you, and I will end by this before Chaturanga that I gave you.
This is the book of inheritance. Ah, oh yeah.
No The Book of inheritance.
The very beginning of the book of inheritance
Okay, can you come here? Come here, come here, read it here. Okay, so this professor America, Ramsey Ramsey.
He was a professor at the King's College in London, between 1825 and 1899. He's the author of many works on the subject of the Muslim law of inheritance. That's what he said. The Mohammedan law of inheritance comprises beyond question, the most refined and elaborate system of rules for the devolution of property that is known to the civilized world. And its beauty and cemetery are such that it is worthy to be studied, not only by lawyers, with a view of its practical application, but for its own sake, and by those who have no other object in view, then their intellectual culture and gratification. So that's some Allahu Allah Muhammad Ali he was
okay. So, now that we, you know, because because it is the next segment is going to be very important.
I wanted to say, We're clear why the father is getting 1/6 and the rest now, right in the presence of daughters or sons daughters, we are we are concerned for him that he may walk away without nothing. So we give him 1/6 And the rest if there is rest, okay. You know, we survived with the by two daughters, and our father survived by two daughters and a father, the daughters will get two thirds the father will get 1/6 and the rest he will not get 1/3 He will get 1/6 and the rest.
They happen to be 1/3 but he's getting 1/6 and the remaining sixth he will get it as a residuary. Err. So,
yes, now we don't say 1/3 because 1/3 is not, you know, yeah, we'll stop here. We will have a 10 minute break and we will come back and then we will push Shafi answers
10 minute. We'll give him his 10 minutes inshallah. Okay, we'll stop here and come back in 10 minutes for Yasser segment.
Smell from the reliability middle salatu salam ala shuffelin Bo and will Cillian se Nabina Muhammad Ali was returning. Allahu melanoma and Ferno and finally, Mr. Olympia now is it namond footlocker Edmonia Kareem. So first off,
thank you all for joining today. And it really is an honor to be in front of the Messiah at Imja Schuchat to have you to Allah
to refresh our understanding of me loss and the follow up.
And this is Paola, such a virtuous and noble science, and one that is impacting every single person in our society.
And yet Subhan Allah is the prophecy of the Prophet Alayhi Salatu was Salam that
it's something that is not discussed. Right? So for the average Muslim, perhaps they have attended 1000s of HeLa plots and and what was in their life. And maybe they've never had a discussion about the
obligation of Mira despite the fact that it comes as the most explicit injunction in the Quran. Similar to the three is from certain Nisa, or the most explicit, detailed injunction, that is an obligation to fulfill now everything that the sheriff is covering
has to do with how to distribute the estate after death.
How to distribute the estate after death. Now, what we're talking about in this session, is the reality that that
would not be possible but for some work you have to do before death.
Okay,
so I'll say that again, this notion of estate planning, in most Muslim lands,
doesn't require you to affirmatively do something before you die. Is that true or no? Right. So if you grew up in a Muslim country or Muslim majority country, or even in countries with sizable Muslim populations in India, for instance, it's not a Muslim country, but they will apply Muslim law to Muslims, you don't actually have to make a will. So the Hadith that the chef mentioned, about writing the will and most Muslim societies doesn't have to be implemented. But here, that's not the case, that it's not going to happen, that your estate will be distributed, per the Shetty era, per the science and the room that we are studying. But for you taking some action. So the point I'm
trying to make is that the objective of studying this science is to implement it, and to implement it requires some work. Now, I would say we have potentially a few evidences or delille for this notion of estate planning as well. So the chef mentioned two of them.
He mentioned two Hadith. The first was the Hadith about not allowing two nights to pass without making a will. The second one he mentioned was the hadith of side below cost or the line. So this is a very interesting Hadith.
Anybody knows I've been bosses buried
you know where he's buried?
And China?
So maybe not then. Okay. It's not correct. So they have a great, but it's not correct. Then I had the point here is he was he passed away.
Correct me if I'm wrong, much later, much later, meaning when he was when this hadith narrated, he didn't die shortly thereafter, but he died? Well, after the death of the Prophet, I thought it was time well after. In other words, he's thinking affirmatively about how to distribute his wealth prior to his death. It's not something that just happens after his death. But he's making a discussion with the Prophet. I just thought to Sam about such In other words, he's planning his estate, right? We have in sorts of KEF, that
most artists that
are traveling, and they come to the city and they find the obviously the story with the orphan and he explains it well, multi data for Kennedy's will that mania team at Medina to kind of tackle qinzhou Lahoma, what kind of tech tokens kind of Buma slot, he had that cans that was under the radar, that wasn't something that just happened. But it was against somebody taking some sort of step to protect the wealth for the orphans that were there. So what I mean to say is that this is something that in America actually has to be done. And so what we're going to talk about today is how do we do it, and where are the conflicts that arise? So the thing about our legal system is that
there are default rules about who gets what. So just like the photo that the chef is explaining, in whatever state you can live in, it has some default rules. So if you don't do anything, the state rules will apply.
Meaning the state has some sort of plan for you. Now, the beauty is that you have the ability to override those rules, if you choose to do so correctly, the state will allow you to do whatever you want. So now it's really interesting is that when we talk about shutting out in this context, there's potentially two groups that will oppose this conversation.
So the first you would expect are people that say, Oh, this is shady or creepy, and this that and and external, people who are not wanting to see or afraid or causing hysteria about *tier in America. So when I do this work as an attorney, you know, that's one of the people that say, Oh, you're you know, implementing study are imposing study this and that. The other one very interestingly, is actually from within the Muslim community.
And I think this takes a point back to the theme of the lecture, I mean, the conference rather, which is that for many, many Muslims, these rules are extremely uncomfortable. People are very uncomfortable with these rules and not willing to submit. So I would say that one of the things that's very important in educating our community is educating our community about the importance, educating as Imams educating the community about the importance of these rules.
In the community about some of the wisdoms of these rules, right, as well. And ultimately that is part of the submission. And so for instance, he the chef mentioned the quote of this professor, and SubhanAllah. I thought it says at the end of that first I have number 11, about Okuma, Veneto caminata thrown at him acabado kunafa. So, in other words, if it was up to us, and I have $100, should I give it to my dad? Or should I give it to my son?
I mean, you could make good arguments for both of them. You could make an argument my dad, I owe everything to him, you can make an argument My son has the rest of my life in front of me. And so ALLAH SubhanA, Allah says, Allah, can I Lehman Hakima. And
Allah subhanaw taala sets these rules. And so we want to create a system in which we can implement them. So what are we going to talk about? We're going to talk about what is the state planning? I want to use some terms. You know, the chef mentioned that terminology is so critical. And this was another theme of the conference is that we want to be able to be conversant as Imams as community leaders in a language that people understand. So it's important to know the Arabic terms, it's important to know the English terms as well. You know, I often tell people, I'm an estate planning attorney, they say, oh, mashallah, I'll tell my friend.
Meaningful what?
I don't have an estate. That's the assumption is that that is for somebody else. Right? And so we'll talk about I want to pause, I want to just as the shift did as well, I want to allow questions to get through, I mean, the presentation to get through, and then I'm going to give you time, Inshallah, to ask questions, because this will lead to all kinds of questions is this conversation? And then we're going to talk about what are the tools and practices? So in America, how do we what what framework can we use to achieve this? What are the tools that exist? So we want to understand what they are? What do they mean, how do they work? And then that way, again, we can advise our
communities
correctly with what we're supposed to be doing. Now. This question, the shift mentioned about, how do I ensure my wife has enough? How do I ensure this? What about the fact that my daughter gets half? What all of that questions about the application of the federal in the context of American society? We're going to talk about these right, how do we actually apply them within this question? And then where are the challenges? Where are the conflicts? Where are the places that we're going to see?
And this last point is very important, I think, for MGM, and I think for the organization for the AMA, that there's a lot of unanswered questions still in this space. There's a lot of potential conflicts, there's a lot of areas that will require inshallah bodies like Anja to do more research collectively, and to come up with some fatawa that people will be able to apply and benefit from inshallah. So.
Okay, now, estate planning, generally, when somebody comes to me, for estate planning, what are their objectives? And I think these apply across the board for Muslims. Okay. So generally protect family, right? So everybody says, I, as a parent, anybody who's a parent, obviously, you want to protect your children, your family, those who care for you, those who are dependent upon you, right? This has nothing to do with Islam. This is just inherently human. Obviously, it has to do with Islam. I don't mean to say that, but it's driven whether you're Muslim or not. Right. Another thing here in America is that with the advent of modern medicine, is that most people don't actually die
suddenly, statistically, there's a period perhaps of sickness, illness, incapacity, you see this within your communities. And so part of this work, obviously, moved me off, and it'll have to do with the theme after death. But even prior to that, what happens, right, and so we want to think about that a little bit. Now, this third one is very, very, very, very, very important. I will not, cannot over emphasize this point, which is to say there is a system in the US in every state, that after you pass away, the court will administer the distribution of the estate. Okay, and this is known as what
probate? Does anybody dealt with probate?
Almost nobody, right? So very few. Okay. So this is really critical, because this idea is that the court a secular judge, who knows nothing about Islam is going to manage and oversee the distribution of the of the wealth. Now this occurs and I will repeat this throughout the presentation, this occurs even in the presence of a will. This occurs even in the presence of a will. Okay, so just bear that in mind as we go through this. Most people Muslim or non Muslim, do not have any interest in being involved in the probate court. Whether you're Muslim or not Muslim, you generally have no benefit.
Have going to court. Some people describe this almost as a lawsuit against yourself. You have to pay a lot of fees, lawyers make a lot of money. The court has a bunch of things. Now imagine if you have a two year old, a four year old, the court will will administer and see this distribution for the next 16 years annual report filing just totally inefficient process. So we want to generally try to avoid the court system. Okay. Now, this is not talking about disputes. If there's disputes again, we were before a secular judge. So we're going to talk about the need to develop some dispute resolution mechanisms outside of the court system. Now, of course, right?
The *ty rules need to be implemented for real but Amina law. This is not like something for most Muslims, they think this is something optional. I mean, this really, if you interact with people, they're not hearing enough about how this is obligatory. They think it's something if I can do it, great. Otherwise, I'll just do whatever I want, right? I'm in America, I'll just we follow American rules, it's very common response, right? American rules do not prevent you from doing what you want. You're totally allowed to follow the rules of the era, with some caveats that will come or some challenges that will come. But it's important to understand this point, then family disputes and
conflicts. I mean, this is universal. This is not something American, this is something in every society.
The disputes about me it off exist, and they're bitter. And so how do we again, preempt them? The other thing to know is that there are certain taxes that are really important to consider. So there are so many different kinds of tax, there's income tax, there's capital gains, there's regular income, there's sales tax, there's property tax, there's one more tax after death, it's called estate tax. Okay? Estate tax is something that generally can be avoided.
Okay, I have no problem saying this, right? People come to lawyers to avoid paying that tax, there are structures you can create to mitigate those tax obligations.
People who don't do that kind of planning will be subject to that tax. Okay. And that tax is very dramatic in certain cases. Now, this doesn't impact the average person, but it impacts wealthy people, and it impacts wealthy people within your communities, the current estate tax is 40% of the estate, above a threshold. Now, that threshold right now is very high. Right. But nonetheless, some states New Jersey, I think, for instance, Jeff has in the state tax, certain states have mostly in the northeast, have state estate taxes on top of federal estate taxes. So I would argue almost, that, you know, this is a squandering of wealth, you know, the profit is laziness, and I'm tells us
to avoid the law talking about just wasting your wealth. This is something that can be really avoided with some front end planning, and it can benefit your family, you can benefit the community rather than having it pass to
the government.
And then this notion of sadaqa jariya. And this will sia as well as the concept of the HIPAA and the lifetime gifting these are things to do now. Shall Hatem mentioned, you know, let's use correct terminology. So I just dropped a few words that I want you to try and understand. So we said this didn't this was the first term on the on the the slide. This is the patient who passes away then may it right, this is known as a decedent, the estate. And this is going to be important one, we're going to come back to this again, and again, we're talking about a state here defined, if we were to define it back.
From the third looking of mid off, this would be called manually for immediate right, everything that the May it leaves behind. Everything that the decedent leaves behind would be known as his or her estate. Okay.
And this is critical, this is absolutely critical that we cannot do any of this. We can't do any of the application of alimony made off without first defining the estate. So when it comes to who owns what in a married in a household, this question is generally not discussed, not resolved and not clear. Okay, so we're going to come to that point. In air. This is the person who inherits by law in air inherits by law. A beneficiary is somebody who inherits through a will a trust or a designation you have a 401k you have a beneficiary, right. And so this person is known as a beneficiary. So the the word in Islam would be known as an Islamic air, that the Sharia gives this person a
share, so he would be an Islamic heir
Now, for instance, take a take a parent, somebody has a wife, and survived by a wife and two children
and a father. So under the shed era, the father is Oh, and he gets an Islamic share under every state law, every state in the United States, does the father get anything?
No. Okay. So this is, again, the importance of planning, you don't plan you will, you will absolutely ensure that that father doesn't get anything. Okay. But you can plan such that, that whatever you wanted to do to distribute the shares the way you want, and your father, your mother, whoever, who would not be an heir under state law would be able to inherit visa V. A will a trust or some mechanism that you create. Okay. Again, terminology, we said we'll see usually people say I need to make a CEA and they mean will. Okay. Now, sometimes people use the word living well, sometimes people use the word last will. Okay.
First of all, I don't think we should use the term will see a two will, because I'm going to explain this next point. But what's the difference between last will and living will?
No, no,
no.
Health Care Directive, a Living Will has to do with pulling the plug. A living will has to do with what to do end of life. It's a Medical Directive. It is I am Chicago sees this all the time. I am you know, in the hospital, Allah protect us and guys, I feel what do you do? Do you pull the plug do you do this do all of that stuff is with found within a living will. So utilize the correct terminology when talking to the community, that if you say to somebody, you all need to make living wills, that's not a false statement, they can make living wills, but that's not going to solve the problem of meat off. That's a different document. Okay. A living will. A last will is the common
document that we hear I want to make a will usually that's referred to as a last word.
Family Trust, anybody knows what a trust is.
It's like a walk, like a guy go off actually, the commentators, American or Western
historians, and
I guess law professors and such, I've written that the trust was actually something that is adopted from Islamic civilization. It's not the same, but it's something that is similar. Now, here, this, I'm going to talk about as being the potential solution for most
cases in the US that the trust is going to be better than the will. I'll say that, again, the trust will generally be better than the will. Why is that? It's because the trust is an entity, you create kind of like a wealth, you put all your assets inside of it, you can put your home inside, you can put bank accounts, you can put different investment accounts, you can do all these things. This is what if you want to call it that, but it's not exactly that this trust becomes the owner. Now, it's a very technical difference in FIP, because it's not a walk, the outcome of Milan will still apply, you are still the manager. But as far as US law is concerned, and state laws are concerned, you are
now known as the trustee, and you manage the wealth and the walk. So I keep saying the wealth, the trust will never die. So therefore we never have to go to court.
The trust, no, it's different, the trust will not die. And so therefore we don't need to go to court. And because we don't need to go to court, we avoid probate and we can do everything we want according to study, we can define who owns what, who gets what, and who's in charge of doing that. All the things that the Jeff covered and will cover can be applied within the framework of the trust. It's a private administration.
Whether you're Muslim or not, this is generally a better solution with because you're a Muslim and your constituents, the people in your community or Muslim, this will generally be the better solution. Okay. We talked about taxes.
I mean, there can always be disputes, we can't prevent disputes, Disputes can arise. But yes, you can do you can build a mechanism for resolving the dispute, right? It's not it. I mean, it's America, anybody can sue anybody, like we can't stop that. But we can try. And we can try to preempt and prevent those disputes. And when they do arise, we can make sure that there is a mechanism for resolving them from within the trust. So for instance, you know, you could name it, you could name a scholarly body, you could name whatever to resolve those disputes, and that would be binding upon the people who are now disputing. This is beautiful, right? It's a solution that is absolutely
necessary, I think, in society, because the alternate is this. What would happen is a secular judge would be tasked with resolving a dispute of religious law.
I mean, this is nonsense, right? Like, that's there's no situation in which that should happen, or whether they even want to resolve. The secular judge doesn't have any interest in doing so. And so we're going to talk about a lot of disputes that can arise that will be better suited for a arbitration type panel rather than a court. Okay, Advanced Directive is we said living will advance directive, I think this one's important to
who makes decisions. So you have family members, you have community members who don't have Muslim family, or they have, you know, their don't have any family in the country, they should have these documents in place to ensure that they have somebody to make decisions. Otherwise,
as you know, the next of kin will generally make those decisions, right.
Okay, so there's a slight difference, the Living Will has to do with in some states, it's the same in some states, you can have two documents. One is specifically for end of life. Okay, specifically about instructions about end of life. And then this one can be who's going to make those decisions for me? Right, so I named him to make those decisions for me, right, I named my brother I named so whatever, right? And so that's fine. And the living wills specifically might guide those instructions. Okay, there's a whole nother conversation about Islamic bioethics and end of life care decisions. And so I'm not going to touch on those, I just want to flag for you that they're
important to consider and to ensure that they are resolved.
Often oftentimes, you all have seen these probably where there'll be a fight between a parent and a spouse about what to do about the
the sick, you know, person who's in the hospital and instead of DA and Ron and Salawat, and whatnot, they're fighting right. So, these things can be an advance resolved at least with some clarity.
executor is the person who is responsible for administrating the will also known as a personal representative. Okay, just terminology, I want you to familiarize yourself with personal representative, a trustee slightly different, but functionally doing the same work. In the context of a trust, the person who administers the trust is known as the trustee. Okay.
Power of attorney is for incapacity, so in the event of incapacity, this person will be managing financial affairs. This is pre death. So there's post death and there's pre death, somebody is in the hospital from an accident or some sickness, they can't manage their affairs anymore.
And this becomes more and more common and for extended periods of time, the more advanced the medicine becomes people are lingering and neither here nor there. And so this becomes important that they have this. And then Guardian is the person who is responsible for the children. This is different, potentially who is watching and has custody of your children is known as the guardian who is responsible for their financial matters.
You know, Jeff talked about rushed Wabi Tallulah Tama had a double O Nikka. Webb totally uttama test that orphan right finiteness to minimoto, Stanford, fairway Hemenway alone, that person doesn't in American society can be two different people. It can be somebody who, let's say you want your children, one person is well suited to take care of the children, but they don't know anything about finances. So maybe the person managing the money is somebody else. Right? This can happen. Agent is just general term. Okay. So now,
we said a state cannot be divided according to study. Unless and until we clarify who owns what
we cannot, we can't do it, it's logically impossible for me to give forth a quarter and a third half to anybody unless I know what it is I'm cutting up. Right. So a couple things to know about property ownership in America are a few things. Now, states differ. This presentation is general, every state has some nuance, most of them are kind of the same. But every state has a little bit of different things. This is why you have to build relationships with your local lawyers, right? You need to teach them you need to benefit from them and have a good relationship so that we can, you know, work on these things jointly. So joint tenancy with the right of survivorship is perhaps the most common
form of property ownership in the United States. What does that mean?
What does that mean?
Spouses co own. But what happens when one dies?
The other one gets 100%. Okay.
Spouses co own, it's fine. The other one gets 100%. Okay, the right of survivorship is going to be the best
problematic part with regards to the application of meat, right? Because the spouse is going to get 100%. Now, let's say I've got that house with the joint tenancy with right of survivorship. Now point number two is essentially the same. In some states, this is called tenancy by the entirety, I'm just giving you terms so that you familiarize yourself with them. In some states, this number two and number one are the same for a married couple,
I make a will I go to a lawyer I make a Will I get it witnessed I get it notarized. I have everything proper. It says, according to study, my wealth will be distributed, it says such in the following shares. And if not, everything is legal, everything is proper, everything is clear.
Who gets the house.
Still the spouse, this is a very important point, which is that certain things are going to trump the will.
So even if you make a will, you have to understand that this Right of Survivorship will supersede what is written in your will. At that point, what happens it's just in a manner. I when I say just in a manner, it's a very heavy Amana. It's not like some light thing. But there's no legally binding obligation on anybody to do anything. So if that person, if we flip it, because this is more common, that the wife passes away, the husband gets the house, the husband goes and gets remarried, the husband then goes and purchases a new house with joint tenancy with right of survivorship, the husband now passes away who gets what?
New wife gets 100% What about his kids? What about his mom? Okay, very, very important. Even if he has this Islamic will.
Um, we're coming, we're coming, we're coming. I'm just making you worried a little bit, and then we're gonna get to inshallah.
So very, very critical community property. Who knows what that is?
Who's from California, Western US.
Okay, so community property is not an Islamic concept. It's a different concept is an interesting concept. And it's rooted in this notion that
this is the same in Arizona, where I am, which is, the idea is that whatever is earned inside of a marriage is considered 5050. Doesn't matter who earned it.
So the notion here is that your wife, we're going to start with this example. And then I'm going to flip it, but you work, the husband works. And the wife does not work. She's home taking care of the children, and the husband makes $100 community property law would say that the wife owns 50, and the husband owns 50.
Community property law would say husband owns 50, and wife owns 50. Okay, Islamic law would treat is a more is a separate property regime with financial obligations upon the husband. So people say this is fair look, she gave up the opportunity to work. And so therefore, she should be compensated in some manner. And so for that reason, the law would give her half in the case of divorce or in the case of death. So she dies, the law would say that he makes a will or he makes a trust or whatever, and it follows city, the community property law would say that his starting point is $50.
Okay, so the 50 gets distributed, all he has the ability to do is 50. The 50 is already hers.
Okay? Now, if the couple I mean, the if the couple agrees to this understanding, then fine. Okay. But most of the time again, this conversation hasn't necessarily happened. Now, invert it. And let's say the husband doesn't work and the wife makes $100, this happens to right wife makes $100 husband doesn't do anything. I've had these cases, the husband is literally doing absolutely nothing. And he says, you know, divorce me, because I'll take half your wealth. So this woman, you know, she's hostage to this guy. He's completely not fulfilling any religious obligation, any secular obligation. But he. So in that scenario, and this is really important, why? Because people will
lodge objections about the fairness of Islamic inheritance system and say that, Oh, Western civil systems are more fair, or this or that. And it's important for you to understand these points, which is not necessarily even to a liberal, in Western society, with the community property presumption seem fair if it is the wife who is earning, because in Islamic law, what would that wealth be? Hers. So in this scenario, she would keep 100% under community property law, the law would give half of it to the husband who's useless who doesn't do anything. Right. And so even from that scenario, it's important to push back a little bit on these notions of, you know, fairness and such.
Okay, beneficiary designations. So I said retirement accounts, life insurance, these types of things. We're not going to debate life.
Insurance and whatnot. It's just as a as a notion here. That is if you have these kinds of assets, they tend to have what's known as a beneficiary option. So somebody comes to you is that shift, I've got a 401k. At work, who do I name is my beneficiary, it's important to understand what is a 401k? What does it beneficiary? How do I do it? Again, the beneficiary designation will trump the will
say it again, the beneficiary designation will trump the Will you put your wife as 100%, you make your Islamic will, according to the file shares, it doesn't matter. In fact, you make a will, and you leave a sea of 1/3. And you have debts and you have funeral expenses. What happens to the 401k, 100% to spouse? None of that stuff has any legally binding impact? Okay, none of that stuff has any legally binding impact? Again, this is why I keep saying the trust will be better. Because yes, she has an Amana and she might do it, and inshallah she does. And that's fine then. Right?
So
where would you say? The the the funny law lies upon the person? Is it in creating a legal instrument? Or is it like a verbal Sia, you had a conversation? That's good enough? Like, what would you what would we say? Like how do we ensure that this is my right was fulfilled
state will be divided according to the survey
with the last one ever, whatever the laws of the environment, give you the most use all
that ensure that you fulfill your obligation.
So this is not gonna fit in. So I'll repeat that, which is to say, some people are just like, hey, you know, I told my kids, I sat them down, I told everybody after death to do this, and they think that's good enough. Now, if they do that, then Inshallah, you know, it's fine. But this is a good chance, that's not gonna happen. It's a good chance somebody gets remarried is a good chance somebody objects, etc. So it's very important, then to make sure that these things are done accordingly. Now, pension benefits, this is like a different category of, of asset. Okay, why? Because a pension is something that the company would give you, in which you can pick a beneficiary.
So there's like different options, there's, I take a lump sum, or I take an amount, and my spouse will get an amount for the rest of her life. Okay, so this is something I'm flagging, that potentially would be treated from an Awadhi perspective as something slightly different Social Security, pension, things like that. Yes.
Yes.
Okay.
I love the shell answer.
The question was, so these these assets that we talked about here, and this would go for this point, and this point, then essentially, and I think they're different.
Do they have to be distributed according to the GM of Madras? Or can you just give them to someone is the question right?
During your life ownership that has been transferred during their life, or beneficiaries, that are that have been designated during your life by the law, not by yourself, such as if the law for instance, gives the wife
the pension that like in, in certain countries, for instance, the pension is not something that you necessarily contribute to it's just given to. So So in Egypt, for instance, you die, your wife gets a pension that is determined by the state that has nothing to do with the morass, the mash that the wife gets or the pension that the wife gets, but the retirement plan here is actually money that he that is your money, so any ownership that has not been transferred in your life?
That should be part of the morass.
Does that look good? And so this would go fall under the definition then of right part of the estate of the decedent, this is what he leaves behind.
Life insurance is complicated life insurance gets
It's not voluntary, and you have no control over it. And you have no say what how it gets distributed? You have no say in Egypt about the beneficiaries who gets the mass? No, say, whenever you have no say, it's out of the question. We're only talking about the whatever, wherever you have control. Okay. So at this point is really, again, my emphasis here is to create an awareness of the complexity that exists. Okay, so we're not going to answer every question. The idea is that this is, from an Islamic perspective, a an important obligation, a very sophisticated science, and a rich science, and then overlay on top of that entire another legal system. Okay. And this is what we need
to be aware of when we're having these discussions. So yes, your question is life insurance is different. Yes, life insurance is a complicated sort of no precedent type of
thing where it doesn't maybe has $0 When you're alive, but on debt, you know, there's all kinds of different discussion. I'm going to table that so we finished the presentation, partnerships, this is also really complicated.
That somebody is in a partnership.
There's no contract. Unfortunately, within our communities,
far less people will write contracts, despite our you know, tradition, despite, you know, debt contracts in the Quran, the that today intimidating version was someone who I mean, this is is giving us instructions. And yet at the same time for Muslims, most people don't write anything. And so now we see all these conflicts somebody dies. And what happens to the business? Do we have to sell it? Do we have to liquidate it? What if there's no money to liquidate it? Can we just give income to the surviving spouse? How do we do all of these things? They have to be planned before. Otherwise, you're just setting up a fight? You're just purely setting up a fight? Okay, so the chef
covered these things, right? The funeral burial expenses, the obligations of debts, and then we'll see and then the federal, okay, I'm going to mention a few points that I think are worth noting, in each of these categories. Okay, as a practical matter, so funeral burial issues. And this is may not, again, purely off related, but just funeral and burial issues. So normally these are taken care of, if somebody doesn't fulfill them doesn't have the money Alhamdulillah almost every Muslim community at this point has some type of fund and we'll cover this for Muslims. Right? I think that's generally the case in every community. Some communities have prepaid lots. So we're seeing
more of these. I don't know if there's any physicians on these things, but a lot of communities have these prepaid. Is this something you recommend is just optional thing or like,
you can pre purchase your slot in the Muslim cemetery?
Yeah, so some people do this.
Go back on the site.
So so we see that and then that way, at least they know they're, you know, buried in some cemetery? Well, I'm obviously nobody knows where they're going to die.
But this point is very important.
People who have non Muslim families, and who are converts, I would highly emphasize that they create a will in which their instructions are clearly articulated for Muslims that hamdulillah with Muslim families, it's maybe not that important. Like at Hamdulillah. This happens, people get buried and people generally want to follow however far a person may be from the masjid, generally and Hamdulillah this happens. But when people's families are not Muslim, this is absolutely critical. There can be fights, people want to cremate. I don't know if anybody's familiar with these statistics. But I was floored when I saw this. That currently, as of today, they this is I just
looked this research up that currently about 60% of people in the US are getting cremated. And they estimate that by 2040 20 years from now 80% of people who die in the US will be cremated.
I mean, Paola, let's 80% And the cost differential is very significant between the cremation and the burial. Right. So the burial costs, I don't know what your communities range could be anywhere from three to 10,020 500 to 310 1000 Different Muslim communities I've seen.
75% have cremations. Yeah. So that's the thing, actually. Yeah, this is I mean, the tracking that they're they're describing is incredibly, you know, substantial percentage of people are being cremated. Now, when you leave it up to a family member with no decision and that family member has to choose do I spend $600 or $800? Or should I spend $8,000 to bury this person? What are they going to pick?
They're gonna pick the cheap one, right? So this has to be written in advance as a protection for these community.
The members who don't have any anybody to decide this point yes
absolutely, absolutely. This is what I'm pointing this for Alhamdulillah for most Muslim families is not an issue. But for converts people who have have non Muslim family members is very important. Yes.
Yeah,
yeah.
Yeah. Yeah. So if the will is done properly, the will will govern. This is important. If legally binding meaning you have a proper thing, you have two witnesses, generally every state requires two witnesses. Generally, every state requires two witnesses. And most of some states, I think one state might require three. And most of the time those witnesses should not be related to anybody in the document. So don't use like a lot if there's somebody uses someone independent, just to avoid any dispute. And that should be legally binding, you get it notarized on top of that even better, I'm going to come to the will and all of these things. But I just want to point one more point that's
important here is the notion or the question of an autopsy. So the law generally when someone dies as a suspicious death,
they will do an autopsy. Autopsy is very invasive. And they will defer to religious tradition of the family and the loved ones if they say no, often, but if the person themselves wrote in advance, I don't want to I don't want to have an autopsy, then that will be
that will be generally honored. When I see it suspicious somebody dies in their sleep. Somebody healthy dies in their sleep in at home. So the coroner might want to make an autopsy autopsy and they may defer to the know if it's written in advance. So another thing that Muslim non Muslim convert non convert doesn't matter. should do this. Yes, quickly.
And
I think as soon as dates if there is a reasonable suspicion for a crime, the
option absolutely whatever my suggestion to the mountains is to work with their federal homes more closely be be a liaison between the federal and the autopsy because I've been at the coroner's office to facilitate the waiting for the autopsy is done. Because sometimes differently
Yeah.
Agreed 100% I'm going to keep going. But this is a very important point, build those relationships. And if there's a crime, you can avoid the autopsy it is what it is. Okay, now please, if I can just get through I really want to I'm going to run out of time with the same problem and I have a lot more slides inshallah. So debts. Not much to say here, as the chef already covered most of this stuff. Again, the Quran enjoins upon us the writing of these debts. This is I mean, incredibly emphatic within the tradition, as we know that somebody who didn't have who has debts outstanding that are unpaid the profit and loss was some is not, you know, the idea of not praying janazah over
this person until such things are resolved, that this is really important. This is another one that we see in conflict is the method
shows that treated generally as a debt. So this is important. Most of the time, there's a lot of homophobes, sometimes people come up with really ridiculous offers, didn't think anything of it. Now upon death, they realize that this was a very substantial amount that actually has to be paid. And if it's paid as a debt, it has to be paid first. And so this is important to consider. Now, debts to individuals versus institutions. I make this point to say that we live in a society unfortunately, where people are just loaded with debt, all kinds of different debts, right? It's like this massive weight. I don't remember what the statistics are, but the amount of debt that the average person has
is is unbelievable.
And so it's important to note that some of these debts will be treated differently from a on a fifth perspective. So for instance, some debts can be assumed by heirs. So frequently you have a house that is has a mortgage on it, right that the heirs can then potentially refinance and things like that and assume mortgages and all of that, right. Same thing can go for different large items that exists and in some cases, you can't in which there might be some only equity portion that is distributed, is it directly related?
Yes.
Go ahead.
That's very quickly.
Very quickly that that's, that's the institutions, every death that will be dropped like forgiven, you don't have to pay it off. And many of these debts are sort of the student loans, things like things like that. So you don't have to go and figure out how to pay them off, because it's not possible. There is no mechanism, actually, to pay them back. That's to individuals. The other debts, the heirs are responsible to pay the debts off from the estate. But the heirs are not if the if the debts are larger than the estate, that that's the heirs are not Islamically responsible to pay the debts off, are they recommended, like if your father died, and he was, you know, older of money, are
they recommended to pay it off, of course, they are recommended, but they are not required the debts to individuals versus that that's to Allah.
You know, if I'm humbly so that that's to Allah actually compete with it. That's where two individuals in the madhhab, they, they are all paid off. But most of the time the fatwa that we give to people nowadays, is that is that that's to Allah,
we go by the Hanafi madhhab, here, and we say that that's the individuals have to be paid off. And if they want, that, that's basically Nero had had that was not done, and things of that nature, if they want to pay it off, and then that will be recommended. So and if I can just maybe add to that point, and the Hanafi school, this comes from the max of the we'll see amount, right? So that's all you can do.
But this is interesting if we get to a question of the cat. And if we come to a question of the cut. And this is another separate longer fifth question. But if we come to a position of zakat being owed on retirement accounts, if that's a position that you arrive at, most people have very large retirement accounts that have never been paid to God. And if they take that position, and then this would be important to consider.
We said the mortgage can be assumed refinanced and things like that.
Under some certain debts.
So a couple practical points here. One is that oftentimes,
if you have a husband who is living, I mean, a breadwinner, and the wife is not and there's a mortgage on the house, and there's not going to be enough assets to pay continue paying the mortgage, you're gonna run a just a practical problem, which is she's not gonna be able to pay these these things off, right, in which case, maybe you have to sell the house and maybe you have to move into something smaller. Sometimes people are terrified by these things. But these are just practical things. If you chose to buy a house that you can't afford and you die in the interim, then this is just likely the result that would arise.
I don't know.
Yeah, so this is a debt and the debt has to be paid first. The offset is a debt that has to be paid first. That's the principle. And so now people play some sort of games with this question as well, which is, I guess if done properly on the outset, this question of I want to make sure my wife has enough. Okay. So I want to make sure my wife has enough. Before getting married, you can add them all up.
It's totally fine. Right? You can add them a third that's going to come off the top that's going to come prior to the woman that she's going to get from the thing that can be in my head agreement that can be in a prenup, a premarital agreement, a prenuptial agreement, it can be there and it would follow and it wouldn't violate anything. Sometimes people come up with interesting things about like creating a Mahara post, just to give her something with some type of debt instrument. I'm going to skip that.
The shift can answer there
okay, specific one, we're going to come later 69 That's too specific to specific.
Yeah.
She wants the community we have the 69,000
before what's the leak of
the house. This is this is a that is sort of
guaranteed by the house itself. So that is not a debt that is basically a burden on her that she does not know
if she will have to pay off the rest of it, or she will have to sell the house today after death. This is not just a pure that you have the capital. There's a security, which is the house?
No, you don't do that. Yeah. The community is not responsible. The house.
She has equity on the house, and the rest of
the
she has equity on the house, she can always sell, you can move. This is I mean, so there's a few things sometimes people get really caught up with, you know, this attachment to a house, I get it. But if you don't have the cash to buy the house in cash, and you take this, this is a risk you take and people should understand this. And it's common sense. So now we come to the CEA This is practically my intention is to give you the things I see as a practical matter what this comes up in practice. So people that cannot inherit adopted children. This is I mean, not tremely common, but it's common, right? They're not going to inherit under state law and adopted child I don't know
every state but I'm assuming every state adopted child takes the place of a biological child. They're equal. It's not the case in Islamic law, right? Doesn't matter.
So this will see a can be used here stepchildren, right? Somebody gets remarried, the father on stepfather wants to leave, we'll see fine, great non Muslim relatives very important, right? If somebody wants to leave this can come from the sea at this point, you know, high dimension ability to establish endowments off is so critical
that there's a quick story
this doesn't clip that's why I'm
pro two
clips. Okay.
If you can just turn the mic slightly lower. I'm pretty loud. That'll be I'll be good. It'll stop the interference. I know for the recording inshallah.
So John Harvard, anybody heard of him?
John, Harvard, religious immigrant to the United States. Young man dies at age 30. leaves half of his wealth to build a University in Cambridge, Massachusetts.
Making sense now? Harvard University. Okay.
1638 is the year the value of that endowment today is what?
No way more than that. Way more than that. Okay. It's above $40 billion.
Okay. I mean, it started somewhere. So all of our institutions are masajid. Right? The reality is, I'm going to be candid, the founders, the big donors, all of these people in the next 20 to 30 years for the most part are going to pass away. Okay, so build some legacy, some institutional capacity, our institutions should be self sustaining. I mean, the work is such an Islamic model. But we went ahead and built all of these institutions with no income generation. Right. So this is one mechanism by which we can build off that are investments that will pay for the expenses and the Imams and all of the facilities and all of these things really critical to do this. Okay, I'm going to skip this
I'm just going to run through the example we have SATA she passes away so she's got Akhmad Armada Sowmya for Deja and ISIS her mother so from the city are based upon everything that we've covered as a reminder who what is I shall get
one six, what is that gonna get?
1/4 and the bottom is little deputy Mr. Hubbard and then to the, to the children to the one boy to girl and those are the shares. Now under state law, state law, what happens who gets what?
Generally speaking, I will get everything under state law, generally speaking, I will get everything in some cases they'll give some portions to the children depending upon your state. Okay, so it will take depending community property this that all of that I haven't might likely get everything. So what happens in practice is that I met lonely guy
gets married, has kids. Now what Optima dies.
So now
not necessarily the states are generally not that unfair, this Hydra would get a large portion. Okay.
Not everything unless he puts her name on everything. If he puts her name on everything, then call us then it's all it's gone. Right. But and this is not a typical I know people are laughing but this is very common.
scenario.
Very good. I'm coming to them. Okay. Hi. Just death. Do these kids inherit from her? Not at all. Almost no. meah for detail, we'll get a portion who gets nothing?
Eisah Yeah, it's just listening. Right? I said it's nothing. Her mother. She's gone from the picture. She's still alive, but she had nothing in context. Okay, so she was deprived of her rightful inheritance by virtue of not doing anything. Okay.
Now
can we do?
Okay, so Achmed dies. He's married to her? Yes, yeah.
Perfect.
Okay, so, uh, okay, so now athma dies. Hajer is his second wife, she is going to get a portion under state law, if she is named as the beneficiary, if she is a joint tenant on the house, if she is a joint owner of the bank account, she's gonna get 100% She's gonna get 100%. Regardless, again, of if he went and made a will, I don't care if it's an online will, I don't care if he paid a lawyer, it's still gonna end up in the same result. Okay. And I would argue that the only way to resolve that is for him to either have a trust, put everything in his name separately with nobody else, and then potentially point to the trust, or he has beneficiary designations that are according to city as a
technical point, I reason I don't like naming the beneficiaries, according to city or inside of your 401k directly is because you never know who's gonna die when, okay, so I put someone sued us and a robot and whatever, on my account directly. And then there's a car accident, and three of the four people die now what? Now you're back in this, you know, unknown scenario. So most of the time, things will work out, but it's possible that they will not. And so therefore, again, we would recommend the trust would supersede okay has your dies, of course, she's not going to give anything to hurt ex husbands, children from another wife, that's, nobody's going to do that. So her kids are
going to get everything. And then these kids will get something under state law.
And then Ayesha will get nothing. Notice, interestingly, everybody looks the same
scenario. Alright, so
what was our stop time show?
1240 1240. Okay, so four things, if you're advising your community for documents, this is and nobody should feel like they're immune, that this is only for the wealthy of my community, this is for everybody.
Everybody should have a will. Now I just said a wheel is kind of useless for a lot of people, there's still some function, it's better than nothing. It also is the place you named guardianship for children. We didn't really discuss this. But the worst scenario of all scenarios is that the state, two parents die, or a single parent dies and the other one's not alive. And who takes custody,
child protective services or whatever, right? Absolutely the worst scenario that you can envision. So therefore, at least in the will, you can stipulate who will be guardian and my children, even if the middle stuff doesn't work out. It's still at least you have that taken care of. Now, if somebody is single and not married, the will, I think is valuable. Somebody is single, I think the will is valuable. You can stipulate who gets what, but if somebody is married, it's not very great. Power of Attorney, I said for incapacity is important. Health Care Directive, living wills, slash all of these things, I think is important to have. Now, a trust, I think is more useful in most cases. I'm
going to mention those cases. All of this is in the slide if you want and the PowerPoint as well. Okay, so this is the core you asked how do we actually do this? Right, this is the core one or two slides, then I'm going to talk about some conflicts from a study or an American law perspective. Okay, guardians for children, a shift mentioned, pick somebody to administer, otherwise, the court is going to appoint somebody. So you know, do you want some random lawyer who knows nothing about you to be the administrator? Or do you want to pick your friend, your brother, your whatever, don't volunteer as a piece of advice. Don't volunteer to be the administrator of people's estates, but
don't say name me as the Imam. I'll take care of it. Okay. You will have headaches for the rest of your life. Okay. So you can be in pain, potential helper, but don't volunteer yourselves to be the administrators unless somebody has no relatives or something like that, in which case, fine, right, but understand that they should name someone and they can consult with you and so on and so forth.
And then who gets separate probate assets. So, the only thing that will is going to cover is going to be something that is not have a beneficiary designation does not have a joint tenancy with right of survivorship. Okay. So something that is not jointly owned and something that is not already have a beneficiary designation. For most married couples, that's almost nothing. Okay, for most married couples, that's almost nothing.
So downside is it still goes to court? Most people think I made my will I'm the law, I'm done. No, you're still gonna have to go to court doesn't control joint assets or assets with beneficiary designations. And tax is not really the point here. But that's important as well. So we talked about this trust, I want to emphasize why I think this is important, okay, because you can transfer and continue to own. So we didn't talk about HIPAA. But, you know, shift in his answer said that if you give something away in your lifetime, then you don't have to do any of this. So if the third rookin of me, Roth is not present, meaning there's nothing left, we already gave everything away in your
lifetime than possible you don't have anything to worry about. But of course, nobody does that. Nobody gives everything away. And so therefore there will always be something you still want, and you potentially want to use and benefit and control. So you can do that in a trust.
You can do it in every state. Oftentimes people live in a state where there's a close border and maybe you have properties in different states realize that if that's the case, then you potentially have probates in two states, three states four states if you have things in different states even worse result so the trust can help there as well.
avoid probate I like I said this is really useful according to Shetty, obviously, we said you'll see from Allah Viola DICOM the whole I can't be done unless that's the whole motivation. This last point is super, super important.
Have a couple sit down look, I know this should be done with a lawyer. There's not that many lawyers that do this stuff. But even as a couple as just counseling as general advice if you're giving them thing, a couple should have an understanding between them as to who owns what.
Because even the Amana side can't be done without this even as an Amana you. I don't know what my wife wanted or what my husband wanted. Because I we never clarified who owned what.
Now
I'm just saying if someone's asking you questions, that one of the first things you should I'm not telling you to go be a lawyer. I'm just saying that it's really important. Somebody comes to you, let's say for premarital counseling, have some idea down show.
lunch
in the next room.
Can you go to 1240 and I'll be done.
Yeah.
Okay.
After this, we can check out
Okay, can I can you give me 10 minutes to so we don't? Okay, so
20 minutes, 20 minutes, I meant an extra I already took the 10. So
who this question is somebody comes to premarital counseling, somebody comes inside of a marriage conversation, who owns what is something that I would advise that we have clarity over again, you know, so that people understand this point, or if you're generally speaking about my body, that it's important to drill home this point again and again, that you know, who owns what, make sure that that point is extremely clear. Okay. So now this two slides are areas of potential complication. How do we make this more complicated? How do we make this practically speaking, what comes up as we see all the time, where I think some of these points are ones that we need further discussion to fill?
Again, the answer or the objective that I'm trying to bring in this presentation is not to give you an answer for every one of them, but rather to get you thinking, and Inshallah, that next time we'll have more development of this marital property, community property, spousal elective shares, what's the spousal elective share? Anybody know?
Okay, so I said, the state allows you to do whatever you want.
The state allows you to do whatever you want, so long as you make a will you make a trust or you put a beneficiary so on and so forth, right? That's not 100% accurate, actually. There are certain rights that a surviving spouse is entitled to under many states laws.
So this is why it's so important again, to do this
planning together. And it's so important to decide who you marry in advance is something sound and logical. Okay? Because people, I mean, again, as the month people come in, they want to get married, no concept or consideration whether this person is going to adhere to any rules of video or not, right? The person dies. They wanted to fulfill the firewall, they wrote a will they met with the lawyer, they made a trust, let's go, they did everything.
And it said that the wife got 1/8. And what happens?
She says, I don't care, right? She says, Huh?
The man dies, He's survived by a wife who gets 1/8. In every state that has these rules, she's entitled to more than 1/8. Okay, by state law, and a spousal elective share means she can choose to override the will and take more than what is
allocated to her by virtue of demands will, okay. Now, again, the only way you avoid this is both people being on the same page. If both people are not on the same page, just essentially forget about it. This is not something you can do without consent. So you made a mistake, you went down the wrong path. People come to me Oh, like my spouse is not in agreement? Well, you sort of thought of that earlier. Right? This is important spouse elective shares. If the spouse is not Muslim, she can get from we can talk fifth all day. But as a practical matter, she's not going to be bound by any of this stuff, she can completely throw it out and say, I don't care. Even then, even then it will be
I'll finish this point. And I'll take the question. Even then, this trust that you make, it has to be with both spouses engaged in the marital conversation, you cannot unilaterally, you cannot unilaterally apply these rules. Now, for somebody separate property in a community property jurisdiction. I mean, I can't cover every single notion, I just mean to say that a married couple has to do joint planning, and that the married couple has to be on the same page or otherwise this will not work. Okay.
It will not matter. I mean, they're the lawyer can draft some sort of waiver of like a spousal share and such. But she can sign your will and doesn't mean anything.
Correct, because it's a state law. Right. So there's some caveats to this point. I just mean to say, you got to make sure this is a this is a therapy a question. This is a question outside the scope of pure legal like you enter into a marriage contract. Understand that there are implications of that marriage that will extend beyond the you know, the ratification ramifications to your children and to your religious obligations. Yes, sir.
Yeah, yes. Yeah.
prenups are okay, this is a great question. Do I advise Prenuptial agreements? Do I advise post nuptial agreements? Absolutely.
Absolutely. Look, should people do prenups? It's a marriage. It's a contract before marriage? Look, it's not easy. It's not easy to do. Okay. So it's not easy to convince a spouse that we're going to enter into a prenup that might break off the whole marriage conversation. But is it sound? Is it religiously grounded? Does it memorialize the Islamic framework? Does it prevent disputes down the road? Yes. So generally, the answer to that question is yes. Okay. Number two, this is very common. I own a house, it's for my sister in Egypt. Nobody has any papers, nobody has anything, what happens when the guy dies?
This his sister doesn't get anything, the kids are gonna take everything and call us and then you fight and this and that. You own something for somebody else, make sure that you have some writing some documentation, some something, this is extremely common, you know, people are investing for their family members overseas, with no understanding that their kids will not care about these things, potentially. So make sure they're memorialized in your now in your will in your trust, we would as a specific distribution, say first, my home should go to my sister. Number one, right? It's not it's not in this framework. It's not a it's not in Dune. It's not in anything. It's just
outside. This is a specific distribution before we start, right, so very important, this is common. Okay, this question she alluded to, everybody asked this question. Everybody asked this question. I want to make sure that my spouse can continue to live in the home. Okay. Everybody asked this question.
So it's really complicated because what happens is, everybody wants the spouse to continue to live in the home
and they don't want to Okay, option one is you give the spouse the home outright, in your lifetime.
So option it's not a
great option. Why? Because
you could get divorced now the guys on the house on the street, so not a great option, right?
Or what the guy gives it to the girl, he she divorces him and then he's out. Okay? So not a great option.
Right? So not a great not a great option.
Okay, we can go 5050, we can go 5050 Fine. But in some states, a 5050 is still not going to be enough. It, those of you in California was prices are so expensive, right? So her 50% plus her 1/8 is still going to be less than the total value of the rest of the assets. The math is not possible, such that she will be able to take the entire thing. Okay, now, this gets more, you know, maybe there's young children, maybe she's holding chairs for other this gets into a question of when does this axiom have to happen? How long can we hold? What are the questions? More if I just mean to say this is a question that is extremely extremely, extremely common. There are some different things
here that are in this part of the analysis. But I would like to see a little bit more from the football bodies, bodies. Okay.
Now, can we make it our?
Because that's, that's the Islamic way of solving this correct? Is it doable? Can we make the
Islamically we can make the house? Yeah, we can designate the wife as the first beneficiary? Yes. And then when she dies, the we can designate the beneficiaries,
basically, but we restrict the ability to sell, do we not? Yes, it does. But you can designate the beneficiaries and after the third generation or
so if we so the only way we get outside of the mudra
framework is through HIPAA or walk, right, that's all there's only options you are, it's gone, you donate it, or you gift it to somebody else, or it's in walk. Now, if we're going to operate in walk framework, we've got to, we've got to make sure we fit under this walk framework, how many people are comfortable with the idea of my house will eventually go to charity. I don't think too many. The other problem is, while I think that that would solve part of the problem, this restriction on selling becomes problematic, because now in the third second generation you're going to have it doesn't have to go to charity, you could make it you could make your children and grandchildren and
grandchildren, the beneficiaries.
So
the first beneficiary will be the wife, yeah, when the wife dies.
The beneficiaries will be the athlete for the for the family for perpetuity
until the day of judgment. So possible. My point here is I think this is something we can explore. We can talk about, we can discuss.
I see benefit, and I see some problems potentially with that scenario as well. I'm going to run through it again, not let me launch everyone has to go. So dividing illiquid assets. Okay, again,
this is so complicated, not complicated, but important that in an illiquid, I'll give an example. There's two partners in a in a business, the business is worth, let's say, $2 million. Okay, partner one dies. Okay, partner two, has to continue making his business has to continue working right, and doesn't have any liquidity to pay off the 50% ownership to the other.
Family, right? Now. He says to her, his wife, I'll give you income for whatever we keep running, you get income. And then in a year or two, because this partner was important in the business, the business fails, you get zero, everybody ends up with nothing, making sure that these things are thought out and decide tax considerations. Okay? This is really actually important, because there are structures by which the tax code advantages transfers to spouse, if I leave everything to my wife, I pay zero tax. So the code works, I can have $100 million, I can leave $100 million to my wife, I pay $0 in tax. If I just the way the code works, if I apply the Islamic inheritance rules,
I might end up paying $40 million in tax.
Okay.
Can we avoid some of that? Yes. Through some you know, arbitrage of some sorts. Yes. Okay. There has to be some design some intelligent thinking that goes into how do we mitigate that kind of thing.
Some states for instance, have an inheritance tax. If you leave children money to your children on top of an estate tax, they have an estate inheritance tax. If you leave money to your children, you pay a flat
percentage. If you leave things to your spouse, they get zero. If the spouse then subsequently gifts to the children, there's no tax. Just gotta go a little bit bill got to be a little smart. Right? Okay. This one.
Okay, so now people are the amount of people that are uncomfortable with the idea of laser chemists to help the vein is incredibly significant. Okay, we talked about different things in the context of
what people have, you know, in the whole conference theme, right? This wasn't one of those that was addressed. But I will tell you that this is one that you can imagine many children will object to when time comes for them to inherit, and many parents, frankly, just don't want to apply. Okay, so again, this comes back to an education piece. My point here is not to give you some sort of magic solution, but rather just to bring this point here. I mean, yes. The
how light people view this hokum and this obligation is incredible. I mean, particularly, if you look at the ayat that follow the IATA Mirotic, uncertainness. Alright, so go do the law, and, and such. So I think it's really important. Now notice, I said this?
I said biological sex, rather than gender. Okay. Because I don't see view it as that far fetched that people will challenge on the basis of gender distributions as well. I don't see that as something that people will like it's not unforced unforeseeable in our community. Right. So I think this is really important, somewhat, I mean, okay, let's just be real. Somebody can turn around and say, I'm a male, I want to get double.
Now, what do you do? Okay. It's, you can laugh about it, but actually, who's gonna decide that question is what I come to at the bottom?
Is he gonna go is he she, whatever, gonna go to some court and make this argument.
And then who's going to decide it?
Why, again, make a mechanism so we can resolve these kinds of disputes as they may be? Okay. rushed. Okay, almost every parent says when they come in, I don't want to give things to my child, they're not mature, etc. So I think a, a deeper dive into the concept of rushed with some contemporary analysis is warranted here, and does rushed, is rushed, impacted by the amount of money that they are receiving is $100,000 inheritance, the same as a million dollar inheritance is a is 21, as the shift alluded to, if a 21 year old boy today, I say boy, because I think generally like young men mature slower in today's society by far than women.
So a 21 year old man inherits 21 year old boy inherits a million dollars, is that good or bad?
I don't answer the question. It's just something to think about. And if not, then what are the legal restrictions by which we can limit or provide some discretion to the trustee? Right. So I think this is important.
Ibn Khaldoun mentions that wealth lasts only for about three generations, is a very fascinating analysis he has, and he has a thing where he looks at Desert Bedouin tribes, and he says that the first generation works really hard. The second generation sees the
previous generation working really hard. So they instilled some sort of work ethic, the third generation has just luxury and comfort. Okay, the fourth generation, the squanders the wealth, and then this is a perpetual human cycle. So be cognizant of the fact of obviously we have we want to protect our family, we want to fulfill the gap. But at the same time, we don't want to we don't want to ruin this, this next point. Another question. Who gets to define who's Muslim?
Who gets to define who's Muslim?
We just said millennial is still teen right, who gets to decide.
I'm talking about the method.
We went through the conference and said some large amount percentage of people are not identifying as Muslim. Who gets to decide that question. That's going to be one of the messiest court cases. The court doesn't want to decide that we have to have a body by which now the other thing is remember,
everything that we're covering in that Chicago is covering isn't post hoc analysis. It's an analysis after death.
Problem is we have to do all of the planning pre death.
So somebody has to decide these things and identify these things prior to death. This is really complicated. Okay, HIPAA, everybody comes and says I want to make a HIPAA. I want to gift this to my child when I die.
This is what people believe a HIPAA is, I will give this to you when I die. In other words, this house, it's a HIPAA to my wife when I die. It's just understanding what a HIPAA is understanding what needs to now I want to hit up, let's say, Okay, let's get him to hold on to and I want to make a HIPAA for my daughter because I'm worried about her and this and that, and the the lifetime gift would be okay, the problem is She's a minor.
So now what, right chef? Don't want to discuss now or?
Okay.
Three minutes. Okay, does that got a revocable trust? This last point is the one I want to finish on, which is to say,
in the Jewish community, there's something known as Beth Dean, anybody's heard of these things?
Beth Dean's, what are their
religious courts, rabbinical religious courts, the rabbi's will decide cases of Jewish law. And they're binding legal arbitration bodies that are recognized by US courts. Okay. Now, I think that we should develop these things. I think that the dilemma and different lawyers can work together, and that we can build these things. And there will be some pushback. I know this has been recorded, but whatever. There will be some people who will say this is you know, show do this and that it's totally fine. It's totally fine. Other traditions, faith groups do these things. And it's part of the development of our society, to be able to have channels to resolve business disputes and
inheritance disputes and family disputes without going before a secular court. Okay, I'll stop here.
We're out of time. If you have questions, inshallah we can address them in the afternoon session at the end of the day, or you can contact me Inshallah, I will do my best to answer if I don't answer please don't get offended. I will try inshallah. Email is better than phone as well. Does. Aquilo Clayton Tronic along with English to light Island and Suffolk