Faraid law - Muslim estate distribution

Note: To use this table, the reader should first ascertain whether the deceased left a wife or husband, and if she or he survived, should look under the appropriate heading. Only in default of either should search be made under “sons and daughters”, “father and mother” and the rest, and then in the order given in the first margin. In each instance it is supposed that there are no nearer relations than those named.

If a person dies leaving Division of Real and Personal Property WIFE: Wife and no relations ¼ to wife, ¾ to the Bait-ul-mal(1) Wife and son (sons) 1/8 to wife, rest to son (sons equally) Wife, son and daughter 1/8 to wife, 7/12 to son, 7/24 to daughter (2) Wife, two sons and two daughters 1/8 to wife, 7/24 to each son and 7/48 to each daughter. (2) Wife and one daughter 1/8 to wife, ½ to daughter and 3/8 to Bait-ul-mal. Wife and daughters 1/8 to wife, 2/3 to daughters and 5/24 to Bait-ul mal Wife, daughter and one son’s son (h.l.s.) 1/8 to wife, ½ to daughter, rest to son’s son Wife, daughters and one son’s son (h.l.s.) 1/8 to wife, 2/3 to daughters equally, rest to son’s son Wife, daughter, one son’s son and one son’s daughter 1/8 to wife, 1/3 to daughter, ¼ to son’s son and 1/8 to son’s daughter. (3) Wife, daughter and son’s daughters 1/8 to wife, ½ to daughter, 1/6 to son’s daughters equally and rest to the Bait-ul-mal. Wife, daughters and one son’s daughter 1/8 to wife, 2/3 to daughters equally and rest to Bait-ul-mal Wife, daughter and three full brothers 1/8 to wife, ½ to daughters, 1/8 to each brother. Wife, daughters and two paternal uncles 1/8 to wife, 2/3 to daughters equally and 5/48 to each uncle. Wife, daughters and four true grandmothers 1/8 to wife, 2/3 to daughters equally and 1/6 to the grandmothers equally and the rest to the Bait-ul-mal. Wife, son and father (h.h.s.) 1/8 to wife, ¼ to father, rest to son. Wife, daughter and mother 1/8 to wife, 1/6 to mother and ½ to daughter. Rest to Bait-ul-mal. Wife, daughters, father and mother 3/27 to wife, 4/27 each to father and mother, 16/27 to daughters (4) Wife, father and mother ¼ to wife, ½ to father and ¼ to mother (5) Wife, four full brothers and two full sisters ¼ to wife, 6/40 to each brother and 3/40 to each sister. (6) Wife, four true grandmothers and two paternal uncles ¼ to wife, 1/24 to each grandmother and 7/24 to each uncle. Wife, mother and true grandmother ¼ to wife, 1/3 to mother and the residue 5/12 to true grandmother. Wife, mother, full sister, uterine brother and sister, consanguine brother and consanguine sister 3/15 to wife, 2/15 to mother, 6/15 to full sister and 4/15 equally between the uterine brother and uterine sister. The consanguine brother and consanguine sister get no shares. (7) Wife, mother, two sons 1/8 to wife, 1/6 to mother and residue 34/48 equally to sons Wife, daughter, two paternal uncles 1/8 to wife, ½ to daughter and the residue 6/16 to the uncles equally. Wife, uterine sister, four sons of brother, son of uncle 1/8 to wife, 1/6 to uterine sister and the residue 28/48 to the sons of brother equally. Son of uncle gets nothing. Wife, mother, sister 3/13 to wife, 4/13 to mother and 6/13 to sister. (7) Wife, mother, 2 sisters 3/13 share to wife, 2/13 share to mother and 8/13 shares to sisters equally. (7) Wife, two daughters, fathers mother 1/8 to wife, 2/3 equally to daughters, 1/6 to mother and the residue 1/24 to Bait-ul mal.

(1) Re Mutchilim [1960] M.L.J. 25.
(2) The daughters in such case being residuaries with the son.
(3) The son’s daughters being residuary with the son’s son.
(4) An example of the doctrine of aul or increase.
(5) The mother gets 1/3 of ¾ (that is after deducting the wife’s share). This follows a decision of the Caliph Umar.
(6) The brothers and the sisters are residuaries.
(7) An example of aul.

If a person dies leaving Division of Real and Personal Property HUSBAND: Husband and no relation ½ to husband and balance to Bait-ul-mal Husband and son (sons) ¼ to husband, rest to son (sons equally). Husband, son and daughter ¼ to husband, ½ to son, ¼ to daughter. Husband, two sons and two daughters ¼ to husband, ¼ to each son, 1/8 to each daughter. Husband and one daughter ¼ to husband, ½ to daughter and rest to State. Husband and daughters ¼ to husband, 2/3 to the daughters and rest to State. Husband, daughter and one son’s son (h.l.s.) ¼ to husband, ½ to daughter and rest to son’s son. Husband, daughters and one son’s son ¼ to husband, 2/3 to daughters equally, 1/12 to son’s son (h.l.s.) Husband and father ½ to husband and ½ to father. Husband, daughter, one son’s son and one son’s daughter ¼ to husband, ½ to daughter, 2/12 to son’s son and 1/12 to son’s daughter. (8) Husband, daughter and three full brothers ¼ to husband, ½ to daughter, rest to brothers equally. Husband, daughters and two paternal uncles ¼ to husband, 2/3 to daughters equally and 1/12 to uncles equally. Husband, daughter and true grandmothers ¼ to husband, ½ to daughter, 1/6 to grandmothers equally. Rest to State. Husband, son and father (h.l.s.) ¼ to husband, 1/6 to father, rest to son. Husband, daughter and father ¼ to husband, ½ to daughters, rest to father. Husband, daughters and mother 3/13 to husband, 2/13 to mother, 8/13 to daughters equally. (9) Husband, daughters, father and mother 3/15 to husband, 8/15 to daughters and 2/15 each to father and mother. (10) Husband, daughter, mother, father, son’s son and son’s daughter 6/13 to father, 3/13 to husband, 2/13 to mother and 2/13 to father. The son’s son and son’s daughter are excluded. (10) Husband, daughter and paternal uncle ¼ to husband, ½ to daughter and ¼ to paternal uncle. Husband, daughter, son’s daughter and two full sisters ¼ to husband, ½ to daughter, 1/6 to son’s daughter and 1/12 share equally to sisters. (11) Husband, daughter, son’s daughter, one full sister and one consanguine sister ¼ to husband, ½ to daughter, 1/6 to son’s daughter and 1/12 to full sister. Consanguine sister gets nothing. (11) Husband, daughter, son’s daughter, two uterine sisters ¼ to husband, ½ to daughter, 1/6 to son’s daughter. Residue to Bait-ul-mal. Husband, daughter, father, mother, son’s son and son’s daughter 3/13 to husband, 6/13 to daughter, 2/13 each to father and mother. (10) Husband, father and mother ½ to husband, 1/6 to mother, rest to father. (12) Husband, father, mother and two daughters 3/15 share to husband, 2/15 to father, 2/15 to mother and 8/15 to daughters equally. (10) Husband, mother and three full sisters ½ to husband, 1/6 to mother, 2/3 to sisters equally. Husband, mother, full sister, consanguine sister 3/8 to husband, 1/8 to mother, 3/8 to full sister, 1/8 to consanguine sister. (10) Husband, two full brothers and three full sisters ½ to husband, 2/14 to each bother and 1/14 to each sister.(13) Husband, mother, full brother and two uterine sisters ½ share to husband, 1/6 to mother and the balance of 1/3 between the two uterine sisters and the full brother. (14) Husband and daughters of two daughters ½ to husband and rest to Bait-ul-mal. Husband, mother, sister and grandfather Husband 3/9, mother 2/9 sister 4/27, father’s father 8/27. (15) Husband, mother, grandfather, one consanguine brother, one or more uterine brothers. Husband ½, mother 1/6, grandfather 1/6, consanguine brother 1/6, uterine brother excluded. (16)

(8) The son’s son and son’s daughter are residuaries.
(9) Example of aul or increase.
(10) Examples of aul or increase
(11) In these cases the daughter and son’s daughter get their Quranic shares while the sister takes as residuary.
(12) The mother gets 1/3 of ½ (that is after deducting the husband’s share).
(13) The brothers and sisters are residuaries.
(14) This is the case of himariyya or musharaka. The full brother and the uterine sisters share the 1/3 share. See Fitzgerald Muhammadan Law p.135 and Nawawi Supra, p.250.
(15) This is the case of Al-akdariya – see Tyabji Muhammadan Law (3rd Edn.) p.874 and Fitzgerald Muhammadan Law p.128 and Nawawi p.253 Supra, (p.22 supra)
(16) This is the case of al-Malikia – see Fitzgerald p.128.

If a person dies leaving Division of Real and Personal Property SONS AND DAUGHTERS: One son and no other relations All to son One daughter ½ to daughter and rest to State. Daughters 2/3 to daughters equally and rest to State Sons and daughters Equally between all sons and daughters, but so that the share of each son is double that of each daughter. One son and son’s son or son’s daughters All to son. One son and father (or mother) 1/6 to father (or mother) rest to son. One son, father and mother 1/6 to each father and mother, rest to son. One daughter and son’s son ½ to daughter, rest to son’s son One daughter, son’s son and son’s daughter ½ to daughter, 2/6 to son’s son and 1/6 to son’s daughter Daughters and son’s son 2/3 to daughters equally, rest to son’s son One daughter, one son’s daughter, and one full brother ½ to daughter, 1/6 to son’s daughter, rest to full brother. Daughters, one son’s daughter and one full brother 2/3 to daughter and rest to full brother. Daughters and son’s daughters 2/3 to daughter and rest to Bait-ul-mal (son’s daughters excluded unless there is a lineal male descendant of the same or lower degree). Daughter and father ½ to daughter and ½ to father (1/6 as Quranic heir and 1/3 as agnatic heir). Daughters and father 2/3 to daughters equally and rest to father Daughters, son’s daughters and father 2/3 to daughter, rest to father. (17) One daughter, father and mother ½ to daughter, 1/6 to mother, rest to father One daughter, mother, four full brothers ½ to daughter, 1/6 to mother, 1/12 to each brother. One daughter and mother ½ to daughter, ¼ to mother and rest to Bait-ul-mal. Daughters and mother 2/3 to daughters equally, 1/5 to mother and rest to Bait-ul-mal. Daughters, father, mother and son’s son 2/3 to daughters equally, 1/6 each to father and mother, nothing to son’s son there being no residue. Daughters and four paternal uncles 2/3 to daughters equally, 1/12 to each uncle Daughter (son’s daughter) and full (consanguine) sister ½ to daughter (son’s daughter) and ½ to full (consanguine) sister. Daughters (son’s daughters) and full (consanguine) sisters 2/3 to daughters (son’s daughter), and 1/3 to full (consanguine) sister. Daughters, four true grandmothers and six paternal uncles 2/3 to daughters equally, 1/6 to grandmothers equally (i.e. 1/24 each) and 1/36 to each uncle. Two daughters, one consanguine sister, one brother’s son 2/3 to two daughters and 1/3 to sister. Brother’s son gets nothing Two daughters, a son’s daughter and a son’s son 2/3 to daughters, 1/9 to son’s daughter and 2/9 to son’s son. (18) Two daughters, a son’s daughter and a son’s son’s son 2/3 to daughters, 1/9 to son’s daughter and 2/9 to son’s son. (18) Two daughters of a son, daughter of son’s son, son of son’s son’s son’ 2/3 to daughters equally, 1/9 to daughter of son’s son and 2/9 to son of son’s son’s son. (20) Son’s daughter, daughter’s son and brother ½ share to son’s daughter and ½ share to brother. Daughter’s son gets nothing. Son’s sons and son’s daughters (of same degree) Equally between son’s son and son’s daughters but so that the share of each of the former is double of each of the latter. (19) Son’s daughters and son’s son’s son 2/3 to son’s daughters, rest to great-grandsons equally Son’s daughter and son’s son’s daughter ½ to son’s daughter and 1/6 to son’s son’s daughter and the rest to the Bait-ul-mal. (20)

(17) There is a doubt whether the son’s daughters (who are excluded as Quranic heirs) are nevertheless entitled to take as residuaries together with the agnatic ascendant or collateral. See Fitzgerald Muhammadan Law, p.124.
(18) In all these cases, as there are two daughters the son’s daughter cannot inherit as Quranic heir. She therefore takes as an agnatic heir and shares the residu with the lower son’s son.
(19) The son’s daughter is a residuary with an equal son’s son.
(20) As there is a “nearer” daughter, the share of the son’s son’s daughter is 1/6 that is the remainder of the 2/3 share of daughters.

If a person dies leaving Division of Real and Personal Property FATHER AND MOTHER: Father and no other relations All to father. Father and mother 2/3 to father, 1/3 to mother Father, full brothers and sisters All to father. Father, mother, three son’s daughters 1/6 to father, 1/6 to mother and 2/3 to three son’s daughters in equal Shares. Father, mother, daughter, four son’s daughters 1/6 to father, 1/6 to mother, ½ to the daughter and 1/6 to the son’s daughters in equal shares. Father, mother, two son’s daughters and son’s son’s daughter 1/6 to father, 1/6 to mother and 2/3 to son’s daughters in equal shares. The son’s son’s daughter is excluded by the two son’s daughters. Father, mother, son’s daughter, son’s son’s daughter 1/6 to father, 1/6 to mother, ½ to son’s daughter and 1/6 to son’s son’s daughter (the son’s daughter and son’s son’s daughter share the Quaranic share of two or more daughters). Mother and no other relations 1/3 to mother and rest to Bait-ul-mal. Mother, and full brothers 1/6 to mother, rest to brothers equally. Mother, full brother and uterine brother 1/3 to mother, 1/6 to uterine brother, rest to full brother. Mother and full sisters 1/6 to mother, 2/3 to sisters equally and rest to Bait-ul-mal. Mother, full sister, and consanguine brother and sister 1/6 to mother, ½ to full sister, rest to consanguine brother and sister but so that the former receives double the share of the latter. Mother, full sisters, consanguine brother and sister 1/6 to mother, 2/3 to full sisters equally, rest as in preceding case. Mother, two full sisters, a consanguine sister and a uterine sister (or brother) 1/6 to mother, 2/3 to equally among the sisters, and 1/6 to the uterine sister or brother (the consanguine sister is excluded by two full sisters). Mother, consanguine sisters and uterine sister 1/6 to mother, 2/3 to consanguine sisters equally, 1/6 to uterine sister. Mother and paternal uncles 1/3 to mother, 2/.3 to paternal uncles equally.

(Amanah Raya)

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Islamic laws of finance a cushion in hard times

The recession gripping the nation has taken less of a toll on American Muslims who follow age-old Islamic laws against paying – or charging – interest.

They've also been shielded by socially responsible retirement plans because Shariah– Islamic law – forbids investments in banks and mortgages as well as tobacco, alcohol, gambling, pornography or weapons.

"If everybody was Shariah-compliant, there would be no recession," said Farouk Fakira, a Yemeni immigrant who moderated a discussion on Islamic finance at Sacramento's Masjid Annur last week.

Fakira, 57, rents a home – like hundreds of other local Muslims – because "interest is pretty much forbidden. If you're making money off of money, the only person who benefits is you."

Shariah – 1,400 years of Islamic legal knowledge based on the words of the Prophet Muhammad – guides Muslims in daily life, said Imam Muhammed Abdul Azeez of Sacramento Area League of Associated Muslims, or SALAM.

Shariah prohibits usury, which often took advantage of a desperate person who needed to feed or protect his family, Azeez said. "There's an element of exploitation here."

The bottom line for many Muslims is, "if I don't have the money to buy something, that means I can't afford it," said Deya Dean Elghassein, who's Palestinian American.

His family helped him buy his home in Folsom with cash. "I do use credit cards, but they have to be paid off in full at the end of the month," he said. He wouldn't invest in Costco because it sells pork and alcohol, but he and others shop there "out of necessity."

About 20 percent of the Sacramento area's 50,000 American Muslims closely follow Islamic rules of finance – especially the prohibition against interest – said Irfan Haq, an economist who's president of the Council of Sacramento Valley Islamic Organizations , an umbrella organization representing 10 mosques.

"Muslims in general have been much less affected by the recession because they're very cautious and conservative in matters of finance and take a longer-term view of life," Haq said. "They want to invest their funds in a way that pleases God so they can sleep peacefully – they care about the afterlife."

Along with avoiding interest, another tenet of Islamic finance is not to invest in enterprises that violate Shariah: alcohol, gambling, banking and weapons. Azeez counsels his Muslim flock not to buy businesses that sell alcohol because "you cannot be in the business of spreading sin: Drunk driving kills."

Mohammed Memon, a Pakistani American project manager for Oracle in Rocklin, has a 401(k) through Amana Mutual Funds – a Shariah-compliant fund based in Bellingham, Wash.

"They're relatively better than other funds; I'm down 15 to 20 percent while many of my friends are down over 50 percent," said Memon, 38.

Amana's income and growth funds avoid bonds and interest-paying securities.

"We screen about 5,500 stocks a month for our 75,000 shareholders, and 2,200 to 2,400 pass," said portfolio manager Nick Kaiser. "The growth fund's biggest holding is Apple Computer. We buy technology, health care stocks and stocks with low debt. The income fund focuses on drug companies, energy stocks, mining."

Shariah also prohibits gharar – the Arabic word for uncertainty or risk – and maysir – gambling – which includes real estate speculation.

Metwalli Amer, founder of SALAM, said he knows Muslims who speculated in real estate and lost their shirts.

Amer, 75, said Islamic finance is about living within your means and helping the needy. "If Muslims had followed that, we'd be much better off," said Amer, an Egyptian immigrant.

But he said the majority of Muslims he knows "became greedy."

Islam doesn't prohibit wealth as long as you give back, he said. "The Quran promotes going into business and trading ventures that share the profits and loss."

Amer said one Sacramento Muslim who was able to become a millionaire while adhering to Islamic financial principles is Kais Menoufy.

(The Sacramento Bee)

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Waqf - The Lasting Charity

Definition

'Wuquf' and 'awqaf' are the plurals of 'waqf' and its verb is 'waqafa', though 'awqafa' is also rarely used. The word 'waqf' literally means 'to detain' and 'to prevent', as in wuqiftu 'an sayri, i.e. 'I was prevented from making my journey.'

In the context of the Shari'ah it implies a form of gift in which the corpus is detained and the usufruct is set free. The meaning of 'detention' of the corpus is its prevention from being inherited,sold, gifted, mortgaged, rented~ lent, etc. As to dedication of the usufruct, it means its devotion to the purpose mentioned by the waqif (donor) without, any pecuniary return. Some Jurists consider waqf to be illegal in the Islamic Shari'ah and regard it as contradictory to its basic principles except where it concerns a mosque. But this view has been abandoned by all the schools of fiqh.

Perpetuity and Continuity

All schools, excepting the Maaliki, concur that a waqf is valid only when the waqif intends the waqf to be perpetual and continuous, and therefore it is considered a lasting charity. Hence if the waqif limits its period of operation (such as when he makes waqf for 10 years or until an unspecified time when he would revoke it at his own pleasure, or for as long as he or his children are not in need of it, etc.) it will not be considered a waqf in its true sense.

Many Imámi Jurists hold that such a condition nullifies the waqf, though it will be considered as valid habs1 (detention) if the owner of the property intends habs. But if he intends it to be a waqf, it will be void both as waqf as well as ,habs. By a valid habs is meant that the

usufruct donated by the owner for a particular object will be so applied during the period mentioned and return to him after the expiry of that period. However, this is not something which contradicts the provisions of perpetuity and continuity in waqf, although al-Shaykh Abu Zuhrah has made a confusion here due to his inability to appreciate the difference between waqf and habs in Imámi fiqh. Consequently he has ascribed to them the view that perpetual and temporary waqf are both valid. This is incorrect, because according to the Imámís a waqf can only be perpetual.

The Málikís say: Perpetuity is not necessary in waqf and it is valid and binding even if its duration is fixed, and after the expiry of the stipulated period the property will return to the owner.

Similarly, if the waqif makes a provision entitling himself or the beneficiary to sell the waqf property, the waqf is valid and the provision will be acted upon (Sharh al-Zarqan'i, vol.7, baab al-waqf).2 If a waqf is made for an object which is liable to expiry (such as a waqf made for one's living children, or others who are bound to cease existing) will it be valid? Moreover, presuming its validity, upon whom will it devolve after the expiry of its object?

The Hanafis observe: Such a waqf is valid and it will be applied after the expiry of its original object to the benefit of the poor.

The Hanbalís say: It is valid and will thereafter be spent for the benefit of the nearest relation of the waqif. This is also one of two opinions of the Shafi's.

The Málikís are of the opinion that it is valid and will devolve on the nearest poor relation of the waqif, and if all of them are wealthy, then on their poor relatives (al-Mughn~, al-Zarqan'i, and al-Muhadhdhab). The Imámís state: The waqf is valid and will devolve on the heirs of the waqif (al-Jawaahir).

Delivery of Possession

Delivery of possession implies the owner's relinquishment of his authority over the property and its transfer to the purpose for which it has been donated. According to the Imámís, delivery is a neces sary condition for the deed of waqf to become binding, though not for its validity. Therefore, if a waqif dedicates his property by way of waqf without delivering possession, he is entitled to revoke it. If a waqif makes a waqf for public benefit (e.g. a mosque or a shrine or for the poor), the waqf will not become binding until the custodian (mutawal~i) or the hakim al-shar' takes possession of the donated property, or until someone is buried in the donated plot of land, in the case of a graveyard, or prayers are offered in it, if it is amosque, or until a poor person uses it with the permission of the w~aqif. in a waqf for the benefit of the poor. If delivery is not effected in any of the above-mentioned forms it is valid for a waqif to revoke the waqf. If a waqf is made for a private purpose, such as for the benefit of the waqif's children, if the children have attained majority, it will not become binding unless they take possession of it with his permission, and if they are minors the need for giving permission does not arise because the waqif's possession of it as their guardian amounts to,their having taken possession. If the waqif dies before possession has been taken, the waqf becomes void and the property assigned for waqf will be considered his heritage. For example, if he makes the charitable waqf of a shop and dies while it is still in his use, it will return to the heirs. The Málikís say: Sole taking possession does not suffice and it is necessary that the donated property remain in the possession of the beneficiary or the mutawalti for one complete year. Only after the com pletion of one year will the waqf become binding and incapable of annulled in any manner. The Sháfi`ís , and Ibn Hanbal in one of his opinions, state: A waqf is completed even without delivering possession; rather, the ownership of the waqif will cease on the pronouncement of waqf (Ab& Zuhrah, Kitab al-waqf).

Ownership of Waqf Property

There is no doubt that prior to donation the waqf property is owned by the waqif, because a person cannot make waqf of a property that he does not own. The question is whether, after the completion of the waqf, the ownership of the property remains with the waqif, with the difference that his control over its usufruct will cease, or if is it transferred to the beneficiaries. Or does the property becomes owner less, being released from ownership?

The Jurists hold different opinions in this regard. The M~likis consider it to remain in the ownership of the waqif, though he is prohibited from using it. The Hanafís observe: A waqf property has no owner at all, and this is the more reliable opinion according to the Shaafi'ee school.3 (Fath al-Qa~ir, vol.5, baab al-waqf; Ab& Zuhrah, Kitab al-waqf) The Hanballs say: The ownership of the waqf property will be transferred to the beneficiaries.

Al-Shaykh Ab& Zuhrah (1959, p.49) has ascribed to the Imámiy yah the view that the ownership of the waqf property remains with the waqif. He then observes (p. 106): This is the preponderant view of the Imámís.

Abu Zuhrah does not mention the source relied upon by him for ascribing this view, and I do not know from where he has extracted it, for it has been mentioned in al-Jawaahir, which is the most important and authentic source of Imámi fiqh: According to most Jurists, whel~ ~ waqf is completed, the ownership of the waqif ceases; rather, it is the preponderant view and the authors of al-Ghunyah and al-Sara'ir have even reported an ijma' on this view. Though all or most Imámi Jurists concur that the ownership of the waqif ceases, they differ as to whether the waqf property totally loses the characteristic of being owned (in a manner that it is neither the property of the waqif, nor of the beneficiaries, and, as the Jurists would say, is released from ownership) or if it is transferred from the waqif to the beneficiaries. A group among them differentiate between a public waqf (e.g. mosques, schools, sanatoriums, etc.) and a private waqf (e.g. a waqf for the benefit of one's descendants). The former is considered as involving a release from ownership and the latter a transfer of ownership from the waqif to the beneficiary.

The difference of opinion regarding the ownership of waqf property has practical significance in determining whether the sale of such prop erty is valid or not, and in the case where a waqf is made for a limited period or for a terminable purpose. According to the Maaliki view that the waqf remains the waqif's property, its sale is valid and the corpus will return to the waiqif on expiry of the period of waqf or when the object for which the waqf was made terminates. But according to the view which totally negates the ownership of waqf property, its sale will not be valid, because only owned property can be sold, and a waqf for a limited period will also be invalid. According to the view which con siders the ownership of waqf property as transferred to the beneficiaries, the property will not return to the waqif. The consequences of this difference will be more obvious from the issues to be discussed below. It is necessary to understand this divergence of viewpoints because i, affects many issues of waqf.

The Essentials of Waqf

There are four arkan (essentials) of waqf: (1) the declaration (al ghah); (2) the waiqif; (3) the property given as waqf (al-mawqufah); (4) the beneficiary (al-mawquf 'alayh).

(Huquq.com)

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Sukuk, the Way Forward in Emerging Markets

Recent innovations in Islamic finance have changed the dynamics of the Islamic finance industry, resulting in tremendous growth in Shari'ah (Islamic law) compliant, structured financial instruments such as Sukuk.

Shari'ah regards money as a measuring tool for value and not an asset. It prescribes that one should not be able to receive or generate income from money. This receipt or

generation of money from money (i.e. interest) is defined as Riba. Shari'ah strictly forbids Riba.

Sukuk is defined by the Accounting and Auditing Organisation of Islamic Finance Institutions (AAOIFI) as "certificates of equal value representing undivided shares in tangible assets,usufruct and services or the assets of particular projects or special investment activity".

Essentially, Sukuk is the Shari'ah-compliant equivalent of a bond.

A Sukuk structure operates on the principle that Sukuk holders each hold an undivided

ownership stake in an underlying asset. Sukuk holders are entitled to a share in the

revenues generated by such underlying assets, as well as being entitled to a share of the proceeds from the realisation of these assets. It is important that suitable assets are identified for purposes of investment (e.g. assets unrelated to industries involving alcohol,gambling or pork).

Types of Sukuk

Sukuk can take many forms depending on the type of Islamic modes of financing used in its structuring. The AAOIFI recognises 14 types of Sukuk, the most common of which are summarised below.

Al-ijarah Sukuk

Al-ijarah Sukuk (leasing notes) are issued where assets are sold by the issuer into a special purpose vehicle, then leased back for the duration of the leasing period. When the notes mature (i.e. when the lease period expires) the issuer has the right to buy back the assets.

Istisna'a Sukuk

Istisna'a Sukuk is used for the advance of funds in respect of real estate development, major industrial projects or heavy equipment such as turbines, power plants, ships or aircrafts. An Islamic financial institution (the investor) funds the manufacturer or contractor during the construction or manufacturing of the asset, acquires title to that asset and upon completion, either immediately passes title to the developer on agreed deferred payment terms, or leases the asset to the developer under an Al-ijarah Sukuk.

Murabaha Sukuk

Murabaha Sukuk is based on a 'cost-plus' financing model whereby a mark-up is added to the selling price of an item with a deferred payment structure. In practical terms, the financial institution concerned would take ownership of the goods or assets for onward sale to its client at a price. The price would include a profit margin on the goods or assets. The financial institution will therefore amortise its cost and return over the period of instalments.

Salam Sukuk

Salam Sukuk refers to a sale where the seller undertakes to supply a specific commodity to a purchaser at a future date, which is paid for in cash and in advance. As a form of financing,the purchaser is able to acquire the asset at a discounted price and subsequently sells the asset upon delivery.

Although this type of 'forward contract' would in principle be forbidden under Shari'ah, Salam Sukuk attaches certain strict conditions aimed at eliminating uncertainty, thereby establishing Shari'ah compliance.

The way forward

Sukuk has proved viable as an alternative to mobilise medium- to long-term savings and investments from a huge investor base. It is expected that the development of various Shari'ah-compliant financial structures, such as Sukuk, will encourage Muslims to participate in financial markets, and will be instrumental in expanding these markets, particularly in emerging countries.

by Nathisha Maharaj, Senior Associate: Finance Projects and Banking,
Cliffe Dekker Hofmeyr Inc

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Alfalah Consulting:  http://alfalahconsulting.com

CEO / Consultant:  http://ahmad-sanusi-husain.com

Islamic Investment: http://islamic-invest-malaysia.com

Inner Dimension of Zakat - Excerpts from Ghazali's Inner Dimension of Islamic Worship

Certain inward attitudes and duties are incumbent on those who seek, through the payment of Zakat, that which leads to good in the Hereafter:

1. Knowing Zakat's purpose and significance

To understand the necessity of paying Zakat, how it represents a test of character, and why it has been made one of the fundamentals of Islam, even though it is a financial transaction and not a physical  act of worship.

Three points deserve consideration here:

(a) Testing the degree of love for Allah

To pronounce the two sentences of the Confession of Faith(Shahada) ("There is no God but Allah-Mohammad is God's Messenger") is obligatory as affirmation of the Divine Unity and testimony to the singleness of the One to Whom all worship is due.

Complete fulfillment of this obligation requires that he who affirms the Divine Unity should direct his love to none but the One, the Unique.

There is little value in mere verbal affirmation.The degree of love is tested only by separating the lover from other things he loves.

Worldly goods are an object of love in everybody's eyes, being the means by which they enjoy the benefits of this world. Because of them, we become attached to life and shy away from death, even though death leads us to meet the Beloved (Allah).

The truth of our claim to love God is therefore put to the test, and we are asked to give up the wealth which is the apple our eye.

That is why Allah said: "God has bought from the believers their persons and their goods,

Paradise being theirs for the price " (part of Quran: 9:111).

Allah also says that true piety means giving away one's wealth, in spite of love for it, to close relatives, orphans, the wayfarer and beggars, and for the emancipation of slaves (see Quran 2: 177) .

(b) The elimination of miserliness

The Divine decree by which Allah bids His servants to spend their wealth, is also significant  in purging the habit of miserliness, which is a deadly sin.

"And whosoever is saved from his own covetousness, such are they who will be the successful" (Quran 59:9).

The habit of miserliness is only eliminated by making oneself accustomed to spending money, for to break an attachment one must force oneself away till a new habit is found.

The purity he acquires is in proportion to his expenditure, to his delight in giving away and to his joy in spending for the sake of Allah.

(c) Expression of gratitude

The third factor is gratitude for benefits received, for the servant is indebted to Allah for personal and material bounties

2. Payment of Zakat at the proper time

The second duty with regards to Zakat concerns the time of payment .

A good practice is to anticipate the moment when payment is due.

This demonstrates a willingness to comply by bringing joy to the hearts of poor, forestalling the obstacles time might place in the way of charitable action, being aware that there are dangers in delaying payment, as the servant runs the risk of disobedience should he or she postpone beyond the appointed moment.

Whenever the impulse to good arises from within,the opportunity must be grasped at once as the believers heart lies between the two fingers of the All-Merciful. Yet how fickle is the heart! The devil threatens poverty and bids us to commit atrocious and abominable deeds.

Demonic suggestion follows hard on the heels of angelic inspiration. One should therefore seize the opportunity and fix a definite month for giving Zakat (if one is used to paying it all at once.)

One should endeavor to choose one of the most opportune times to pay Zakat, resulting in more closeness to Allah and compounding the value of the Zakat.

One such favorable time would be month of Muharram, since it is the first month of the Islamic year and one of the sacred months. Another is Ramadan.

3. Give In Secret

The third duty is secrecy, for this is farthest removed from hypocritical display and reputation-seeking.

Allah says, "If you disclose your Sadaqat (alms giving), it is well, but if you conceal it, and give it to the poor, that is better for you. (Allah) will forgive you some of your sins. And Allah is Well-Acquainted with what you do" (Quran 2:271).

According to one Hadith, the Prophet said, "Seven people will be shaded under Allah's Throne on the Day on which there will be no other shade: (1) a just ruler, (2) a young person who worships Almighty Allah, (3) a person whose heart is attached to Masajid, (4) two people who love one another for the sake of Allah, and who come together and part for His sake, (5) a man who is called by a beautiful woman of good family, but refuses her, saying ‘I fear Allah', (6) a person who gives his money in charity so secretly that his left hand does not know what his right hand gives, and (7) someone who remembers Allah privately, so that his eyes brim with tears." (Bukhari, Muslim).

According to one of the scholars, " Three things are accounted among the treasures of righteousness, one of them being to give Alms in secret."

Whenever fame is the donor's objective, his work will be in vain, since the purpose of alms giving is to eliminate miserliness and to weaken the love of wealth. But the love of status has a stronger hold over the soul than the love of wealth, and both of them have deadly consequences in the Hereafter.

4. Give openly

The fourth duty, when one knows that such conduct will tend to encourage others to follow suit, is to let one's giving be seen.

In doing so, however, one must be inwardly on guard against hypocritical motives.

Apart from the expectation of gratitude and the risk of hypocrisy, there is another danger in visible alms giving, namely that of offending a poor man's dignity. It may be hurtful to him to be seen to be needy.

But someone who begs in public is bringing the disgrace upon himself; there is therefore no sense in being wary.

5. Avoid Taunting and Hurting

The fifth duty is not to invalidate one's alms giving through taunting and hurting.

As Allah said, "Do not make your Alms giving void by taunting and hurting."(part of Quran 2: 264).

Taunting is reminding a person of a favor, while hurt lies in making it known. According to others taunting is to exploit a person in return of a gift, while hurt lies in making him feel ashamed of his poverty.

Still others say that taunting means making one's gift an excuse for arrogant behavior.

One should therefore realize that giving alms is actually paying Allah,Great and Glorious is He, what is due, while the poor person is actually receiving his sustenance from Allah.

Anyone who grasps the significance of the three points mentioned above while discussing the purpose and importance of the Zakat, or even one of them, realizes that he is a benefactor only to himself , through spending his wealth either to demonstrate his love of Allah or to purge himself or herself of the voice miserliness, or to give thanks for the blessing of wealth in the hope of receiving more.

6. Adopt humility

The sixth duty to think little of one's donation, for to regard it highly is to invite that pride which is one of the deadly sins, making good deeds worthless.

It must be recognized that ten of two and-a-half percent is a tiny fraction, and that to pay only this is to content oneself with the least generous level of expense as we have explained above.

This is something to be ashamed of rather to boast about. Even if one rose to the highest level, disbursing all or most of one's wealth, one should still reflect on where it came from in the first place, and for what purpose it is being spent.

For all wealth belongs to Allah. It is to Him that one should be grateful for for being given it and being enabled to spend it, so why pride ourselves on spending for the sake of Allah when it is actually His property?

And, if one's situation is such that one must look to the Hereafter, spending for the sake of spiritual reward, why boast of giving what one expects to receive many many times over?

As for action, one's giving should be done with a sense of shame at one's meanness in holding back the rest of one's wealth from God, Great and Glorious is He.

One's demeanor should be humble and abashed, like that of someone who is asked to hand back a deposit but returns only part of it and holds on the rest.

For all wealth belongs to Allah and He would prefer to see us give all we possess. If He has not commanded His servant to do so, it is only because that would be too hard on them by reason of their greed.

As Allah says: "If He were to ask you of it, and press you, you would covetously withhold, and he will bring out all your (secret) ill wills'" (Quran 47:37).

7. Give the best and the dearest

The seventh duty is to select from one's wealth what is best and dearest to one: the finest and most excellent part, for God,exalted is He. Allah is good and accepts only what is good.

If the offering has been acquired by dubious means, it may not strictly belong to the donor and will then be disqualified.

"O you who believe! Spend of the good things which you have (legally) earned, and of that which We have produced from the earth for you, and do not aim at that which is bad to spend from it, (though) you would not accept it save if you close your eyes and tolerate therein. And know that Allah is Rich, and worthy of all praise." (Quran 2:267).

8. Seek the Worthy and Deserving

The eighth duty is to seek out the truly worthy recipient for one's offering (Sadaqa), rather than be content with just anybody who happens to fall within the eight categories of legally qualified beneficiaries.

For among those generally eligible there are some with special qualities. Attention should be paid to these five qualities:

First, one should seek out those pious people who have renounced the world and devoted themselves exclusively to the business of the Hereafter.

Second, the recipient should be chosen from among the people of learning, to support him in his quest for knowledge. Learning is the noblest form of worship, so long as it is based on right intention.

Third, the recipient should be a person who kept his need to himself, not being given to fuss and complaint.

Fourth, the recipient should be someone with a large family or disabled by illness or some other cause.

Fifth, the recipient should be a close relative, whether paternal or maternal.

Each of these points should therefore be taken into consideration, for they represent the desired qualities. Within each quality there are further gradations, so one ought to seek the highest .

If anyone can be found in whom all these qualities are combined, that is the greatest treasure and the supreme prize. If one does one's best and succeeds, one gets a double reward, but even if one fails, there is still a single reward for the effort.

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Alfalah Consulting:  www.alfalahconsulting.com

CEO / Consultant:  www.ahmad-sanusi-husain.com

Islamic Investment: www.islamic-invest-malaysia.com