Purpose This paper aims to develop the best practices of Islamic estate planning for Muslims. 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, for instance, farāʾiḍ (inheritance), waṣiyyah (will), hibah (gift) and waqf (endowment). Design/methodology/approach The paper used an interview method to obtain information on the best practices of Islamic estate planning. Semi-structured interviews were conducted with the respondents and estate planning providers in the northern region of Peninsular Malaysia. The data gathered was analysed using thematic analysis which involved five phases to construct the best practices of Islamic estate planning. Findings The paper identifies important elements in Islamic estate planning. The elements were outlined as the crucial things that Muslims should do to plan for intergenerational transfer and earning a good share in the hereafter. Research limitations/implications The first limitation of the paper is that the best practices were developed based on a qualitative method. There is no evidence of its validity, which is a gap that can be explored in the future. Second, it involves the perceptions of two types of respondents (individuals and Islamic estate planning providers), which may be broadened to other related stakeholders such as regulators, in future studies. Originality/value This paper presents a framework of best practices of Islamic estate planning, it being one of the first studies to do so, which is not only useful and relevant for Malaysian Muslims but also for Muslims in other countries.
The aim of this study is to investigate factors that influence the practice of making will among Muslims in Malaysia. In Malaysia, it can be noted that some progress towards enhancing Islamic estate planning has taken place, particularly in the practice of Islamic will. Islamic estate planning industry in Malaysia has grown and now offers a variety kind of products to facilitate Malaysian Muslims to manage and improve their estate planning matters. Nevertheless, the value of unclaimed and frozen assets in this country keeps growing annually. Hence, this study aims to look at the practice of making wills in Malaysia and investigate factors that influence Muslims to do it. Using a quantitative analysis, a total of 338 questionnaires were used to achieve the objective. The method of analysis employed in this study include Independent Sample T-Test, One-Way Analysis of Variance (ANOVA), Pearson and Correlation as well as Multiple Regression. The results of this study indicate that there is a significant difference between gender (male and female), educational levels and monthly income levels towards Islamic will practice. Nevertheless, only ethnicity showed no significant difference towards Islamic will practice. The correlation analysis showed a significant and positive correlation between knowledge, wealth management, institutional factor and religiosity toward Islamic will practice. The results show that knowledge and wealth management are the main variables that influence Muslims towards Islamic will practice. This explains that higher level of knowledge and wealth management among Muslims will lead to a higher practice of Islamic will. These results suggest that the government and Islamic estate planning industry should put a greater emphasis on attracting and educate Muslims to manage and plan their wealth well during their lifetime.
When a Muslim die, there are four main things should be settled upon his death: funeral expenses, debt settlement, wasiyyah and faraid. Upon settling funeral and debt of the dead, estate management is one of the obligations required to be carried out by the heir using faraid. Nevertheless, based on the recent statistics issued by Amanah Raya Berhad, there are more than RM60 billions worth of properties of the deads in Malaysia have been frozen from being distributed to the respective heirs. Unfortunately, 95% of the properties belong to Muslims. Among reasons of the undistributed properties are due to awareness of the heirs, cost of property claims and law restriction. If this situation continuously happens, there will be a waste of capital in economy. To avoid this problem, hibah (inter vivos) and wasiyyah were suggested to be used as tools to avoid problems in distributing the wealth and properties to the heirs. Hence, the purpose of this research is to investigate behaviour of Malaysian Muslims in managing their estate specifically on wasiyyah and further to determine the factors that influence Muslims to choose wasiyyah. This is an empirical study which employed Logit Model analysis of data collected from surveys to Muslims in Malaysia. This study managed to collect 406 questionnaires and based on the result, it shows that age, health, religiosity and advantages are significant in explaining the Muslim behaviour to choose wasiyyah. The results also imply that Muslim would less likely to choose wasiyyah as to their estate planning if they have more age, good health condition and high level of religiosity and may tend to use the other tools available in Islam.
When a Muslim die, there are four main things should be settled upon his death: funeral expenses, debt settlement, wasiyyah and faraid. Upon settling funeral and debt of the dead, estate management is one of the obligations required to be carried out by the heir using faraid. Nevertheless, based on the recent statistics issued by Amanah Raya Berhad, there are more than RM60 billions worth of properties of the deads in Malaysia have been frozen from being distributed to the respective heirs. Unfortunately, 95% of the properties belong to Muslims. Among reasons of the undistributed properties are due to awareness of the heirs, cost of property claims and law restriction. If this situation continuously happens, there will be a waste of capital in economy. To avoid this problem, hibah (inter vivos) and wasiyyah were suggested to be used as tools to avoid problems in distributing the wealth and properties to the heirs. Hence, the purpose of this research is to investigate behaviour of Malaysian Muslims in managing their estate specifically on wasiyyah and further to determine the factors that influence Muslims to choose wasiyyah. This is an empirical study which employed Logit Model analysis of data collected from surveys to Muslims in Malaysia. This study managed to collect 406 questionnaires and based on the result, it shows that age, health, religiosity and advantages are significant in explaining the Muslim behaviour to choose wasiyyah. The results also imply that Muslim would less likely to choose wasiyyah as to their estate planning if they have more age, good health condition and high level of religiosity and may tend to use the other tools available in Islam.
There has been an increased public interest and awareness in waqf practices which is one of the most effective social finance instruments in Islam. History has proven that good governance practices affect the effective use of waqf property which has become one of the mechanisms for wealth creation in a country. Unfortunately, most of institutional mutawalli are facing challenges in their governance practices, leaving the waqf properties not fully utilized for the benefit of society. Thus, this chapter aims to examine in-depth the utilization of waqf property and governance practices of an institutional mutawalli under State Islamic Religious Councils (SRIC) in Malaysia. A qualitative method applied in this case study where formal and semi-structured interview conducted on a focus group involving those in leadership positions such as CEO and the top management of the institutional mutawalli. The first part of discussion is on governance practices of the institutional mutawalli, followed by discussion on their experiences and current execution in utilizing the use of waqf properties. This study identified the crucial characteristic in the waqf property. Several recommendations are made on how to improve the effective use of waqf property and best governance practice that can be implemented to help the institutional mutawalli attain their growth performance.
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