The “Letter of Wishes” is a non-legally binding document; however, it is an important estate planning tool that helps comply with Shariah without court proceedings. You should create Last Wills and/or Trusts (including Pour-Over Wills) in addition to this “Letter of Wishes.” for the following reasons.
1. IT IS A BACKUP
If you create Trusts or Letters of Wishes (with or without Beneficiary designation), the Last Will covers the assets left out right before death or mental incapacity. So, it provides backup to assets that have the potential to be left out. There is no prediction of the situation of assets throughout life. For example, suppose you have purchased a house or investments but forgot to include them in trusts or assign beneficiary designation. In that case, that specific house or investment shall be covered under last wills and must go through probate (court proceedings). Also, Individual retirement accounts are not covered under Joint accounts or beneficiary designation. These have the named beneficiaries, with regulations determining when you can begin making withdrawals, or how they are taxed. So, these accounts must be passed through Last Wills, Trust, and/or similar agreements. If there is no Last Will, then the Intestacy law of the country may apply, and your estate distribution may not comply with Shariah. Without a Last Will, it may take years to resolve the estate issues because it takes at least a year (approximately) for the decision to be made for creating a “Statutory Will” as per the Intestacy case (before it is discussed and provided resolution) in court in many countries.
2. IT IS DETAILED
The “Letter of Wishes” gives an overview of your wishes, but a more detailed and technical explanation concerning Islamic inheritance law is described in the Last Will. So, having the Last Will can give beneficiaries and inheritors a sense of technicality and details of what goes behind.
3. LEGALLY BINDING
The “Letter of Wishes” is legally non-binding. So, if you create a Last Will, that will give a legally binding backup to a “Letter of Wishes” in case one or more beneficiaries (or inheritors) disagree or disregard your “Letter of Wishes” to get all assets out of arrogance and betrayal. Wealth is the source of all good and evil, so having solid protection is necessary. Protecting the wishes and assets is necessary so that the beneficiaries and inheritors abide by that to ensure compliance to achieve salvation as per the two important Islamic rulings below. When you read the Holy Quran verses in Surah An-Nisa (4:11-15), Allah (Subhanahu Wa ta aala) mentions them below at the end of the verses.
“These ‘entitlements’ are the limits set by Allah. Whoever obeys Allah and His Messenger will be admitted into Gardens under which rivers flow, to stay there forever. That is the ultimate triumph! But whoever disobeys Allah and His Messenger and exceeds their limits will be cast into Hell, to stay there forever. And they will suffer a humiliating punishment.” - Holy Quran, Surah-An-Nisa, verse 13-14
4. BINDING INHERITANCE RIGHTS
Inheritance rights are binding for Muslims under Shariah (i.e., Islamic law).
It was narrated from Anas bin Malik that the Messenger of Allah (Sallallahu alayhi wasallam) said, "Whoever tries to avoid giving the inheritance to his heirs, Allah (Subhanahu Wa ta aala) will deprive him of his inheritance in Paradise on the day of resurrection." -Sunan Ibn Majah, Book 22, Hadith 2806
5. SPECIFIC REFERENCE TO WILL
There is a lot of Islamic literature pointing to the urgency and need for an estate plan in place for Muslims, but one is very direct and refers to a “Will” that you should note. You can fulfill Sunnah as per this Hadith.
Prophet Muhammad (Sallallahu Alayhi Wasallam) said, "It is a duty of the Muslim who has anything to bequeath not to let two nights pass without including in his Will." (Reference: Sahih Al Bukhari, Chapter 1, Book 13, Number 3987).