Understanding the Difference Between a Wasiyyah and Hibah in Your Will

When preparing an Islamic Will in Australia, it’s important to understand how Islamic principles align with Australian law. Two Islamic inheritance legal terms that often cause confusion are Wasiyyah (discretionary bequests) and Hibah (gifts). While both allow you to direct wealth to people or causes you care about, they operate in different ways and have distinct legal and religious implications.

1. What is a Wasiyyah? (Discretionary Bequests)

A Wasiyyah refers to the portion of your estate (up to one-third of your net assets after debts and funeral expenses) that you are Islamically allowed to distribute at your discretion, outside of the fixed shares of inheritance (Fara’id).

Key Points to Note:

• Under Australian law, you can include this bequest in your Will just as you would any other discretionary gift.
• It must not exceed one-third of the estate (in accordance with Islamic inheritance law), unless all fixed heirs consent after your death.
• The remaining two-thirds must follow the Qur’anic inheritance rules (Fara’id).

Examples of Wasiyyah:

• Leaving 10% of your estate to a charity such as a local mosque or humanitarian organisation.
• Setting aside funds for a scholarship in your name.
• Giving up to one-third of your estate to a non-Muslim relative or foster/adopted children (since they are not within the fixed inheritors).

Wasiyyah Scenario: Fatima has an estate worth $600,000. After paying off debts and funeral costs of $60,000, the balance of her estate is $540,000. She chooses to allocate $180,000 (one-third) of this estate balance through her Wasiyyah. She leaves $100,000 to her favourite charity and $80,000 to a non-Muslim friend. The remaining $360,000 will be divided according to Fara’id between her husband, children, and parents.

2. What is a Hibah? (Lifetime Gift)

Hibah refers to a gift made during your lifetime. Unlike Wasiyyah, which only takes effect after death, Hibah is executed immediately once given and accepted.

In estate planning, gifts are things you give to someone while you’re still alive, and they’re not counted as part of your estate when you pass away. These can include money, jewellery, gold, a car, house, or even valuable collectibles such as artwork, antique furniture and heirlooms.

Under Islamic inheritance principles, any gifts you give to someone during your lifetime do not cancel or reduce the share of inheritance they are entitled to receive under the Fara’id (fixed shares). As Allah says in the Qur’an:

“For men is a share of what the parents and close relatives leave, and for women is a share of what the parents and close relatives leave, be it little or much; a determined share.” (Surah An-Nisa, 4:7)

Key Points to Note:

• You can mention a Hibah in your Will to keep a record, but it is legally treated as a gift you gave before you passed away rather than something to be shared from your estate.
• It must be completed (i.e. transfer of ownership) while you are alive; otherwise, it risks being treated as part of the estate.
• Hibah can be useful where you want to provide for someone outside Fara’id without waiting until after death.

Every gift given in your lifetime does not need to be documented. However, it is important to document gifts that are of significant monetary value, or that may be controversial, or likely to be challenged by the family.

It is a good idea to write down and keep records of any gifts you give during your lifetime to people who depend on you financially, such as a niece who looks after you or an elderly relative who lives with you. This makes make it clear that these were genuine gifts and can reduce the chance of disagreements or legal claims over your estate after you pass away.

Examples of Hibah:

• Transferring the title of a property to your daughter while you are still alive.
• Gifting money to a grandchild to help with university fees.
• Giving jewellery to a non-heir relative during your lifetime.

Hibah Scenarios:

Ahmed owns two properties. While alive, he transfers one property into his daughter’s name as a Hibah. This property no longer forms part of his estate upon death, and only his remaining assets will be distributed through his Wasiyyah and Meerath (two-thirds to obligatory heirs).

Brother Yusuf owns a block of land in Sydney. While alive, he decided that this land will be a Hibah (gift) to his daughter Fatimah.

• Upon death, if Yusuf had already transferred the legal title into Fatimah’s name while he was alive, it is a valid Hibah and no longer part of his estate. He may still mention it in his Will for clarity as follows: “I confirm that the property at [address] has been given as a Hibah (gift) to my daughter Fatimah on [date] and should not be treated as part of my estate.”
• If Yusuf had not yet transferred the title, but only declared in the Will that he wants the property to go to Fatimah, this will not be treated as Hibah, but as a bequest (Wasiyyah).

Hanan states in her will: “My gold bracelets are for my granddaughter and were gifted by me to her on [date].”

3. Key differences between Hibah and Wasiyyah:

(i) Timing of Transfer

• Hibah is a gift given during your lifetime and takes effect immediately once the recipient accepts it.
• Wasiyyah is a gift or instruction that takes effect after your death, through your estate.

(ii) Ownership and Control

• In a Hibah, ownership of the asset passes right away to the person receiving it.
• In a Wasiyyah, ownership only transfers after you pass away, and the asset remains yours until then.

(iii) Legal and Religious Limits

• A Hibah can be made to anyone, in any amount, while you’re alive.
• A Wasiyyah can only cover up to one-third of your estate and cannot benefit your legal heirs unless the other heirs agree.

4. Practical Guidance for Australian Muslims

• Plan ahead: If you want to support a cause or non-heir, or provide more for those heirs that are not provided for as much through the Fara’id, then decide whether a Wasiyyah or Hibah is the better vehicle.
• Document clearly: Ensure Hibah transfers are completed legally (e.g. property title transfer, bank transfer) and not just promised.
• Inform your heirs and loved ones of your Will: To avoid any challenges to your estate distribution and other wishes listed in your Will, it is advisable to inform your heirs and loved ones of your decisions. If any family objections occur, then these can aim to be resolved in your lifetime.