TRUST OR WAQF

 

What is the difference between Waqf and Muslim Trust?

The usage, concepts, and principles of "Waqf "or "Wakf " are limited for Muslims, but the concept of Trust is vast and can apply to any individual, whether Muslim or non-muslim. It may include many types of Trust used worldwide and differs from one country or jurisdiction to another.

What are the different types of Muslim or Islamic Trust?

Different trust types may include and the most common for an individual and family are revocable (Living Trust, the most popular), irrevocable Trust, Testamentary Trust (can be created under Will), and Discretionary Trust.

How the Muslim Trust or Waqf can be formed?

The Trust could form between an owner called a Grantor and Trustee (one or more persons) or a Trust firm, company, bank, association, or charitable. The only Trust that will stay longer is the Charitable Trust. The other type of Trust, such as individual or family trust, terminates automatically upon successful estate distribution to the beneficiaries as per the Trust agreement completed.

What is Pour-over Will? and why do I need it?

There is the belief that if you create Trust, you would not need Will but Pour-Over Will works as a backup for any unfortunate situation. The assets left out of Trust or waqf can be covered under Pour-Over Will. Trust requires updating from time to time, and there is a possibility that the Grantor or Owner of Trust dies right before he or she purchased large assets and missed including in his or her Trust which will not be covered under Trust. In such a scenario, your Pour-Over Will plays a significant role as a backup estate plan.

 

Can Muslims create Trust or Waqf in Islam?

Muslims can create Trust, Waqf, or Wakf in general. Laws of Trust (or Waqf) differ from one country or jurisdiction to another. Laws of Trust may not be the same as Laws of Waqf because Waqf is a purely Islamic concept of Trust. Also, not all countries offer the mechanism of creating Trust and/or Waqf. You can create many types of Trusts (besides individual or family trust) based on your needs. You should consider creating Trust, especially if you have significant personal or business assets. Trust requires more cost and effort upfront than Wills, but it pays off in the end if appropriately established and maintained.

 

What is the difference between a Trust agreement created by a Muslim and a non-Muslim?

The Trust or Waqf created for Muslims follows the Islamic law of inheritance (i.e., Faraid), while non-Muslims other than Jewish and Hindus, in general, would rely on legal succession laws. Jewish follows the Jewish Inheritance law, and Hindus in India follow the Hindu succession laws.

 

Do the laws of Wills and Trusts exist worldwide?

The laws of Wills, on the other hand, do exist for most nations as per Wassiyyah's research to date. Trust or Waqf's laws are still yet to develop in many countries worldwide. Creating Trust is more complex. There are many things to consider outside the Trust document. You should not use online Free templates that may pose incompliance risk.

 

Which Muslim world countries use the Waqf the most?

The Waqf is not just a legal concept but has been widely used in many Muslim countries, including Singapore, Malaysia, Indonesia, Saudi Arabia, Dubai, Qatar, etc. 

 

In which countries do the Trusts' laws differ from one Jurisdiction (i.e., state, province, territory) to another?

Trusts' laws may differ from one country or Jurisdiction (i.e., state, province, or territory) to another for the United states, Canada, Australia, and some European countries, so your Trust agreement must comply with jurisdiction-specific laws for these countries.

 

What are the Islamic implications of Trusts for Muslims or Waqf?

The Trust agreement is a powerful legal document mainly relying on moral, legal, and religious obligations. The Trust agreement must comply Islamically, meaning the estate distribution must follow Islamic inheritance law (i.e., Faraid), similar to Islamic Wills. Your Trusts must appropriately include clauses and legal terms as well as Islamic wording so that the Trustee can not ignore from adhering. Especially for countries where Muslims are a minority, creating Trust can be an option for many.

 

What is the main difference between Islamic Trust and Will?

Having an Islamic Will is excellent, but you can not manage estates before death. Establishing Trust is the best way to handle assets while alive. Also, your estates do not have to go through a long Probate process if you have a legal Trust. A carefully drafted Trust can also minimize inheritance taxes, especially if you have substantial national and/or overseas assets. Creating and establishing Trust is not as simple as creating Will. Trust requires many things to be in place (including land titles updated) before you say your Trust has been legally established.

 

When do Islamic Wills work best compared to Trust?

Creating Trust will not be worth it for those who do not own significant assets. Then, Islamic will can be the best option because making and maintaining Trusts are complex and expensive compared to Will. Also, not all countries have adequate laws allowing you to create Trusts. Wassiyyah offers exclusive blog articles for Premium members to help you decide between will vs. Trust. Click HERE to learn more about premium membership.

If you are confused or don't know where to start, please JOIN US​ to receive your free E-Book "Beginners guide to Islamic estate planning," specially designed for those who seriously want to make their estate plan completed in the easiest and quickest way.

If you want to start an Islamic estate plan, click HERE.

Please feel free to drop your FEEDBACK about this page or overall experience.

 GO BACK TO HOME