Estate planning in China

Estate planning holds great significance for Muslims in China (People’s Republic of China), who form a substantial portion of the population. To adhere to Islamic principles, Chinese Muslims must consider various aspects of Islamic estate planning, such as creating Islamic Wills (or Wasiya, Wasiyya, Wasiyat), Islamic Trusts (or Waqf), Powers of Attorney, and Living Wills (or Medical directives) that comply with Shariah law and legal requirements. Wassiyyah, a specialized service, offers tailored and comprehensive solutions for Muslims residing in China, considering tax considerations in legal and Islamic contexts. Failing to establish a proper estate plan can lead to numerous complications for beneficiaries. Muslims cannot distribute their estates solely based on legal laws, compromising Islamic inheritance principles. Therefore, it becomes imperative for Muslims living in China to seek the best Islamic estate planning solution to ensure compliance. Wassiyyah places significant emphasis on meeting these muslim estate planning requirements. Various factors contribute to the lack of attention required for Muslim succession planning. The complexity of the estate planning system, uncertainty regarding future issues, and individuals being occupied with their daily lives all contribute to this oversight. However, these challenges can be overcome by drafting a robust Islamic estate plan approved both Islamically and legally. This Islamic estate planning guide caters to governmental tax and estate planning laws, encompassing deed tax, inheritance, testamentary bequests, Wills, Trusts, and other tax implications that may affect surviving spouses, children, grandchildren, parents, and grandparents. By taking into account these intricacies, individuals can get confidence that their estate is distributed according to their wishes while staying in compliance with legal and Islamic requirements. A well-crafted Islamic estate plan offers peace of mind and safeguards future generations' interests, providing a seamless transition of assets and minimizing potential disputes. So, the importance of estate planning for Muslims in China cannot be overstated. By availing themselves of the specialized services offered by Wassiyyah, Chinese Muslims can create a comprehensive Islamic estate plan that adheres to Shariah law and aligns with legal obligations. This ensures the protection of their assets, minimizes complications for beneficiaries, and provides a solid foundation for transferring wealth under their beliefs and the law.

The government recognizes five official religions: Buddhism, Taoism, Islam, Protestantism, and Catholicism. Muslim forms 28 million (1.7%) approximately. There are 39,135 mosques in China which tell that the religion of Islam is well established. So, Islamic estate planning is important for Muslims in China.

Effective January 1, 2021, China introduced the Civil Code of the PRC (the 'Civil Code'). This is the first unified civil law framework created to integrate most of China's former substantial civil substantive laws. In Article 124 of the Civil Code of the PRC (the 'Civil Code'), A natural person has the right to succession under the law. Private property lawfully owned by a natural person may be transferred through inheritance following the law. Also, per the Constitution of the People's Republic of China, Article 13 states, "Citizens’ lawful private property is inviolable. The state shall protect the right of citizens to own and inherit private property in accordance with the provisions of law." So, as long as you meet the legal requirement under law, there should not be an issue of following the inheritance according to your wishes as a Muslim. However, since China is non-muslim majority secular country, you would need a strong and solid estate plan to meet both Shariah and legal compliance otherwise, estates distribution may not follow Islamic inheritance. Wassiyyah offers the solution that can help you comply with both Shariah and legal laws of China. Additionally, Wassiyyah aims to inspire Muslims to create an estate plan that complies with Shariah and legal laws. This is one of the most important obligations, and you can learn more by visiting the Islamic inheritance law website. Also, you would see, that Islamic inheritance was studied, and you can find many works HERE by Muslims, and non-muslims.

In the People’s Republic of China, the main governing law for will issues is the Civil Code of the PRC (the 'Civil Code'), enacted on 1 January 2021. This code includes approximately 1260 articles. The "Book 6" of this code refers to Inheritance, testamentary bequest, and provisions of Wills. A person who creates Will is called a Testator, and the person who looks after the estate administration is called an executor. Notarization of the Will is necessary under the laws of China. The Will can be made in writing. Debt must be paid before estate distribution takes place.

In the People’s Republic of China, A trust can be created only for lawful trust purposes. There must be definite property under the trust, which the settler must lawfully own. A trust must be in writing and contain trust contracts, testaments, or documents specified by law and administrative regulations. The name and addresses information of the settlor and trustee must be accurate. Apart from this, the trust period, proper designation of beneficiaries, and the provisions for the administration of the Trust are equally important. The duties of Trustees must be written clearly.

In the Civil Code of the PRC (the 'Civil Code'), marital property is divided into jointly owned property and separately owned property. Prenuptial agreements have been traditionally frowned upon in Chinese culture, but because of increased awareness of personal assets, more and more couples are accepting the division of premarital property. During a marriage, a couple may also produce an agreement to clarify which parts of their property are jointly owned and which shall constitute separate ownership. This agreement shall be made in written form. Notarisation of such an agreement is recommended but not compulsory. In the absence of an agreement or missing clauses in the agreement, the provisions of Articles 1062 and 1063 of the Civil Code shall take precedence to determine the jointly and separately owned properties.

In Article 1153 of the Civil Code of the PRC (the 'Civil Code'), when partitioning an estate, where community property of husband and wife is involved, unless otherwise agreed upon, half of the community property shall be allocated first to the surviving spouse as separate property, while the remaining property shall be part of the decedent’s estate. When partitioning an estate, where the decedent’s estate is a portion of the common property of the family, the portion of the property belonging to the other family members shall first be separated from the decedent’s estate. This provision can help you comply with the Jointly owned property under Islamic ruling. The only difference is, the Will determine the estate distribution for the deceased portion of estates. Under this provision, if not contrary to the law, your Will can help you distribute estates as per Islamic inheritance law.

Usually, in China, no surviving accounts type of arrangement exists (i.e., no right of survivorship apply). The estate distribution takes place based on the Will, so creating Will is important for the Chinese.

DISCLAIMER: We strive to offer users accurate information to the best of our knowledge. However, laws are subject to change; therefore, the user assumes full responsibility and should utilize the information on our website as a reference per our terms and conditions. If you believe any part of the information is incorrect or contains errors, we kindly request your feedback here.