I have had the honor of speaking at both location multiple times in the past and look forward to discussing what continues to be an almost universally overlooked fara’id (obligation) of Muslims and easy ways to prevent tragedy.

                          

In case you missed it because of that reason, the post that month was a well considered one on Waqf, and how giving to one can be a bad idea.  Check it out if you have not yet.

                          

Please check their website for details as they emerge.

ISNA’s annual convention is in Chicago on the 4th of July weekend.  I am speaking there on July 3, 2011, though there may be changes to the schedule.  Please go to their website for updates.  I enjoy visiting ISNA and would like to see as many people as possible go.  Visit their website for more information.  Their complete schedule  is not up yet.

                          

In some cases, organizations would like to be able to build for the future.

They would like to build new buildings, hire staff, and many cases, simply bulk up their bank accounts into what is often being referred to as a “waqf”  with the promise that they can continue doing these things for generations to come.

As an Attorney specializing in Estate Planning, I am often asked to advise on long term giving for particular organizations within the Muslim community.  Oftentimes, I find myself reluctantly recommending against planned giving for programs I like run by people I admire.   I do not discourage giving in charity during lifetime in order  to benefit worthy causes and love to plan gifts.  However people work hard for their money, and we need to carefully evaluate who the estate is given to.

It is easier to give more in charity after you do not need it anymore, because you have died. The Islamic rules of inheritance actually restricts how much you give after your death, including to beneficial purposes such as charities.

You can get up to one third of your assets to a wasiyyah after your death.  The Quran mentions this term,  and also mentions that it comes out before inheritance is distributed. However, exactly how much you can give in a wasiyyah is not itself specified.   What is specified,  is how much is distributed in inheritance,   which is ordained (Quran 4:11-14).

The one third restriction comes from a hadith where it is clear that one third may be too much (though plainly permissible).   While Muslims are encouraged to give to charity (zakat is an obligation), after death, the money is no longer yours to give away.

Some Islamic organizations are beginning to promote various sorts of planned giving mechanisms. Though admittedly, these are typically in the infancy stages. One of the major problems with much of what occurs and planed charitable giving is that some of the techniques violate Islamic rules on riba, gharar, or the Islamic Rules of Inheritance.   Violating one or more of these rules, ostensibly to benefit a charity (though mind you they frequently benefit the donor as well) would of course seem silly.

When giving your estate to charity, make sure you follow the following steps:

The charitable remainder trust is a popular technique. It is a wonderful tool. When it’s done right, individuals may save a substantial sum of money on taxes and may actually be financially richer for having done it.   Also,  they end up giving a lot of money to charity.  There are assumptions involved  that may or may not make the thing work.

Most of the time, these trusts  are set up in order to  give an individual and income interest or a “unitrust”  interest during their lifetime, and the balance goes to a charity. It becomes a questionable transaction when you are tying the arrangement to death, since children are disinherited in the deal.   However,  if the gift is done over a period of years, I do believe you are and much safer territory.   The problem however is that such a trust may become less attractive for some, particularly for those using this as a retirement tool.

Planned charitable giving  often provides  us with a gray area  we are not usually familiar with when it comes to giving and charity.   You are giving a “split interest.”  This means it’s partially your property and partially the property of the charity you have given it to.   If you do it right, who exactly have given it to may well be up in the air throughout your entire life.

This is because institutions, just like people, are constantly in transition. People move, elect new boards of directors, go bankrupt  or deal with monstrous litigation costs. You won’t know these things in advance.  If you lock yourself into a situation where  a charity once adored have now fallen out of favor, you won’t get much peace of mind that you will not be happy with the donation that you have given, which in many cases would be a large portion of  your wealth.

Planned charitable giving programs frequently like to lock people in to their own charity for decades, This is of course in their best interests. However, it is not in the donor’s interests.

Even well-established institutions are more vulnerable than people might think.    Some people are able to raise large amounts of money through sheer force of their personality  or celebrity. However, if you evaluate what may become of their organization should that individual leave the stage, you may find the organization looking weak and unsuitable.   When evaluating an organization, it’s best to simply ignore the famous people promoting it.   If you are not sure why I want you to ignore the famous person at the help you should google “Crystal Cathedral financial troubles” and you will begin to understand.

Preachers in all faiths have a way of mesmerizing us while separating us from our money. This happens in Islam to.  Thats all wonderful when good happens with the money.  But estate planning is business.  Lets stop being mesmerized for a few minutes and look at the facts.  Particularly when we are being asked to contribute to a fund that will sustain an organization forever while partially disinheriting our own children:

• Some Factors to consider when naming a charity to your plan:

• How long has the organization been around?  I would say  the lower it goes from 20 years, the weaker case it has to be part of your estate plan.   No matter how promising they appear, give them a chance to prosper.  Donate to them to help them during this time if you like them, stop if you don’t.

• Do you have a personal connection to the work, have you been involved?  If not, why not?  If you are giving away up to 1/3 of your estate to an organization, you may consider an institution to be somewhat on par with your children on an emotional level, at least thats what frequently happens.  Make sure your not just adding an organization to your estate plan just because you heard nice speeches or powerpoint (hopefully you are not doing that).

• Does the organization suffer from some version of “founder’s syndrome” – where one or more founders fancy themselves as indispensable?  If so, there is a risk this will be a self-fulfilling prophesy.  Its not a newsflash for me to point out that the founders of every organization will die.

• Do they have a leadership succession plan/ a strong leadership bench? This goes back to the issue of personality driven organizations.  If you go to the organization’s website and see one person’s picture and name over and over again, and the whole website looks like a love letter to that one person, its probably a weak candidate for your estate plan.

• If the organization’s “heavy” leaves and starts a rival organization, what would happen to this institution?  Of course you don’t truly know, but if there is a risk the organization may collapse, its a weak candidate.

• Do they have a plan set up that protects their endowment from lawsuits?   Occasionally, organizations say they have a separate “waqf” but there is little legal substance to the arrangement. Future generations can easily squander it, as we have seen many times in the past.  Make sure and have this evaluated before putting the organization in your plan.

• Is funding an organization forever really the best use of your wealth?  It may be. After all its your money and you want it to be directed in accordance with your values.  However do consider money is a renewable resource and if the parents of today can figure out how to charge tuition and pay teachers, put cash in a donation box at the Masjid, future generations may be able to do the same.  An endowment may also change an organization and make it less accountable to the people it is serving, since the people running it have their money guaranteed by dead people.

These are various factors that you may consider looking at, they are not absolute rules. Of course, you do not know what an organization is going to be like 100 years, 50 years, 20 years or even one year from now.   However, like I said, if you are going to partially disinherit your children in order to benefit a charity’s bank account, you should go through  an analysis to see if  there’s a good chance this will benefit humanity over the long-term in the way you intend.

This type of analysis is unnecessary when we are NOT talking about giving an organization an endowment, but rather doing other sorts  of sadada jaaria (continuous charity), such as irrigation programs, getting clean drinking water to those who need it, certain types of building programs and so forth.

Such analysis is also unneeded if you establish a Family Foundation so that charitable dollars  for a particular purpose, such as education, scholarships, salaries for worthy charities, building projects and so forth  are awarded by successors.   If you do not have the means to fund such a charity while you are alive, you may be able to mandate one be created after you die (stay within the 1/3 rule).

This will ensure that your overall charitable goals are met over the long term, but its not necessarily tied to an organization, the fortunes of which may be fleeting.

Lastly, its far better and less complex to give in charity now, while you are alive and healthy.   See the benefit of it while you are alive.  Go to those fundraisers and build those institutions.  A disclaimer: Some of you reading this may have specific charities popping up in your head figuring I am attacking them.  I am not.  I am recommending prudence when planning an estate but encouraging charity to those organizations you like.

                          

Here is a link to the event.

                          

Next weekend in Northern California I will be speaking at two different Islamic Centers.   On Friday March 25, I will be at the Yaseen Foundation at Belmont, CA.  On Saturday March 26 I will be at the Islamic Society of the East Bay after Maghrib.

On April 20,  I am invited to speak at a continuing education event on Islamic Inheritance at Karamah , Muslim Women Lawyers for Human Rights.

On May 13, I am speaking at the Chino Valley Islamic Center in Chino, CA.

On September 10 I am invited to speak in Buffalo.

I enjoy educating the Muslim community about this “forgotten faridah” and an honored to have the opportunity to do it whenever I can.

                          

Even in Muslim majority countries use of  Islam based rules (Sharia is generally a pretty heavy word but has never been, and never will be codified) is spartan at best.  Yet American political discourse is now dominated by the lunatic conspiracy theory about how Muslims have already infiltrated all levels of government and are preparing to take over with a new totalitarian system.

Much of what I do in Islamic Inheritance is to talk about it and educate people about a forgotten Faridah (obligation).  Its an obligation deeply rooted in justice and peace, guiding principles in the Sharia.  Because of how property law is structured in virtually all of the United States, a legal and political culture that is increasingly hostile to Muslim families practicing their faith should not prevent most people from applying the Islamic Rules of Inheritance, if they wanted to.

The problems with this culture is that when there is a dispute within the family, or in any institution, one party, or sometimes both parties, will use the other side’s adherence to Islam as a hammer and exploit Fox News and Talk radio induced prejudices against the other side.  Women in a divorce case may be more likely to attempt to exploit these prejudices against Islam to try to get a better judgement against a divorcing husband, indeed this has been a common tactic for years.  What we are also seeing is the use of this tactic in Masjid disputes.   Disputes among Muslims often end up with allegations of “extremism” in open court.  A prominent case in San Francisco such  allegations against an Imam were rejected by a Jury.  Similar allegations are being thrown about in a dispute in the San Fernando Valley based on local media reports.

In inheritance disputes, I was recently involved in a case where a member of the family, who is Muslim, will attempt to deny legitimate Islamic Inheritance rights of another member of the family.  From my perspective as a practitioner who is focused on helping Muslim families live based on Islamic Rules, the bigger problem is not the fact that American society is becoming increasingly hostile to Muslims and the practice of Islam, its that some Muslims themselves will work to exploit these prejudices for their own benefit and create injustices against others.

Political tides can turn in an instant.  The capacity of human beings to do injustice to each other, particularly in the area of inheritance, will always remain.

                          

Historically in Europe people kept estates together by favoring the eldest male heir. Another thing not mentioned is the church may also be favored, since a priest may grant absolution for giving all a person’s estate to the church. The argument goes this was good because inequitable distribution means more control.

Women historically did not inherit anything until much more recently in history, though in Islam women inherit by right in the Quran.

By tradition now in the United States, inheritance passes to the surviving spouse and assuming no re-marraige, family disharmony or other problems, people usually distribute their assets equally. However under US law you can do almost anything you want (Free alienation of property), including disinherit children. Spouses do get a forced share in many states, though not in California.

Attacks on the Islamic system of inheritance as hindering economic development are incoherent. For one thing, inheritance is about distribution after a property owner’s death, not economic development. The Islamic Inheritance system is far better at what it does than any other system: older male heir, the church or our current system, “free alienation.”

As we move in time from one system of inheritance system to another, there has never been any evidence that one is better than another when it comes to the prosperity of societies.  Those things come from commerce, development policies, the kind of government footprint on society.  It has little to do with what children get from their dead parents.

                          

The divorce program would include:

• Historical background of marriage and divorce in the United States and in Islam
• How property is organized, joint, community property, separate
• use of prenuptial and postnuptual agreements
• Use of agreements from overseas
• Child support
• Child Custody
• “unregistered marriages” that seem to be more common in the Muslim community, including bigamous and polygamous  marriages and their legal implications, particularly in a divorce.
• Alternative Dispute Resolution for divorce and custody.
• Cost of divorce for both spouses.

We will insha Allah  provide examples from specific published cases of how divorce works.

The Inheritance Program would address the following:

• The inheritance system in California.
• Spouses as separate economic units
• Basics of the Islamic Inheritance system.
• Wasiyyah
• Debts
• Provisions for the surviving spouse when 1/8 is not enough.
• Inheritance Disputes, how they occur and how to avoid them.
• Trusts and Wills with inheritance
• Taxes
• Handing off responsibility for property
• Guardianship

Just like in the divorce discussion, there will be specific examples and stories that we will share throughout.

Click here for the website for the center.

                          

The program runs from 11:00 AM to 3:30 PM.

Here is a link for the Islamic Community Center