Vol. 4, pp. 1 - 10 | 2016 ISSN: 1985-7454 | E-ISSN: 2590-4396
www.mjsl.usim.edu.my
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ISLAMIC INHERITANCE IN MALAYSIA: BETWEEN LAW AND ADMINISTRATION
i,*Resali Muda
i Faculty of Syariah and Law, Universiti Sains Islam Malaysia, Bandar Baru Nilai, 71800, Nilai, Negeri Sembilan, Malaysia
*(Corresponding author) e-mail: [email protected]
DOI: https://doi.org/10.33102/mjsl.vol4no1.13 ABSTRACT
Administering Islamic inheritance is a multifaceted process that encompasses multiple stages and procedures. Each stage presents unique challenges, with numerous institutions involved in managing and administering Islamic inheritance through different written laws and protocols. This complexity often leads to confusion among the general public, not only during the distribution and administration of inheritance but also in the post-process phase.
Establishing legislative authority, clear institutional frameworks, and uniform methods and procedures becomes essential for effective resolution. This article aims to contribute to the international scholarly field by providing a comprehensive guide that assists heirs in resolving issues related to Islamic inheritance and property distribution, addressing both the legal and administrative aspects of the matter. Islamic inheritance administration plays a vital role within Muslim societies, as it upholds the principles of fairness, justice, and equality in wealth distribution. However, the intricacies and multiplicity of institutions involved in the process can cause significant confusion and challenges for heirs. This article fills a critical knowledge gap by presenting a comprehensive guide that not only educates heirs but also offers practical solutions to navigate the complexities of Islamic inheritance. Furthermore, this article highlights the need for establishing legislative authority, clear institutional frameworks, and standardized methods and procedures in the administration of Islamic inheritance. It emphasizes the importance of uniformity and clarity in the process to enhance fairness and transparency. By shedding light on these essential aspects, the article encourages further research and discussion on legal and administrative reforms in Islamic inheritance systems globally. In conclusion, this article offers a comprehensive guide to aid heirs in resolving issues related to Islamic inheritance and property distribution. This comprehensive resource equips heirs with the knowledge and tools to navigate the complexities of Islamic inheritance, promoting fairness, justice, and equity in wealth distribution. Moreover, this article calls for ongoing research and dialogue on legal and administrative reforms, fostering improvements in Islamic inheritance systems worldwide and ensuring the continued development of equitable practices.
Keywords: Islamic inheritance, property distribution, legal framework, administrative procedures, comprehensive guide.
How to cite (APA 6th Style):
Muda, R. (2016). Harta pusaka Islam di Malaysia: Antara perundangan dan pentadbiran: Islamic Inheritance in Malaysia: Between Law and Administration. Malaysian Journal of Syariah and Law, 4, 1-10. https://doi.org/10.33102/mjsl.vol4no1.13
Introduction
In accordance with Islamic principles, the settlement of a deceased individual's property, or inheritance, is required immediately following their burial. However, heirs often encounter confusion regarding the appropriate institutions and procedures for settling the inheritance. Multiple institutions are involved in managing the distribution of inheritance, and specific laws must be followed. As a result, heirs may struggle to determine which institution to approach and how to properly settle and distribute the inheritance. This article provides a guide for heirs by discussing the legal and administrative aspects of Islamic inheritance and property distribution. Its aim is to assist heirs in taking appropriate action to resolve these issues.
Inheritance
Inheritance refers to the assets left behind by a deceased individual, which are intended to be inherited by their family members and other rightful parties. These assets encompass both moveable and immovable properties and are distributed after settling any outstanding debts and obligations in accordance with the law. According to Kamus Dewan, inheritance assets are defined as "assets left by a deceased person to be inherited by their family members and others." However, it is important to note that not all assets belonging to the deceased individual become inheritance property. Exclusions include assets that were given away during the individual's lifetime, assets that were sold by the deceased person, endowed assets, trust-held assets, pensions (including issued pensions), SOCSO rewards, and gifts given by visitors to the deceased individual.
Inheritance, also known as "inherited property," refers to the assets and properties that are bequeathed by deceased individuals to their family members or heirs. Section 2 of the Muslim Wills Enactment (Selangor) 1999 defines property as “includes movable or immovable property, any interest in any movable or immovable property, any right, title, claim, chose-in-action, whether present or future or which is otherwise of value in accordance with Islamic Law;
Upon the deaths of individuals, their assets become classified as an inheritance. These assets are comprised of (a) immovable property, including land, buildings, gardens, fields, and houses that cannot be moved or altered from their original location; (b) moveable property, such as currency, business goods, stocks, bank savings accounts, savings in the Employees Provident Fund (EPF), insurance, household equipment, vehicles, firearms, jewellery, Amanah Saham Bumiputera (ASB), and similar items that can be moved or altered from their original location and can remain in the same form or change their shape; and (c) a combination of immovable and moveable property, for instance, the deceased bequeaths two plots of land and savings in the Lembaga Tabung Haji. In Malaysia, inheritance is categorised into two types: non-Islamic inheritance and Islamic inheritance. The latter pertains to the property of a deceased individual who was a Muslim.
Types of Heritage Property Testate
A testate is a declaration made by individuals during their lifetime concerning the use of their property or benefits for charitable purposes or any other purpose permitted by Islamic law after their demise.
This declaration involves the decision to transfer the ownership of property or benefits following the testator's death. Nevertheless, under Islamic law, a testate is limited to one-third of their property.
Conversely, for non-Muslims, a testate is regulated by the Wills Act, 1959.
Intestate Estate
If an individual passes away without creating a testate or without having had the chance to make one.
Small Estate
A small estate is a property that falls within the scope of the Small Estate Act (Distribution) 1955.
According to Section 3 of Act 98, Small Estate refers to the assets of a deceased individual who has left either immovable property (land) or both immovable and movable property, with a total value not
exceeding RM 2,000,000.00 and has not created a testate under the Wills Act 1959 at the time of the application.
Large Estates (also known as ordinary estates)
Large estates refer to all types of assets left by deceased individuals, whether or not they left a testament (usually non-Islamic assets). This includes (i) movable and immovable assets that have a total value of RM 2,000,000.00 or more; (ii) immovable assets (such as land) that are valued at over RM 2,000,000.00; and (iii) assets with a testament, even if the total value is less than RM 2,000,000.00.
Simple Estates
According to the Public Trust Corporation Act 1955, the assets of a deceased individual who only left movable property with a value not exceeding RM 600,000.00 are governed by this act.
Jurisdiction
The administration and distribution of inheritance in Malaysia fall under the jurisdiction of the Federal Government, as provided by Article 4(e)(1) List 1, Ninth Schedule of the Federal Constitution. This list outlines laws related to testamentary and intestate property, including movable and immovable property, bequeathed or non-bequeathed property, which are under the Federal jurisdiction.
To govern this jurisdiction, the Federal Government has enacted laws, namely the Small Estates (Distribution) Act 1955, the Probate and Administration Act 1959, and the Public Trust Corporation Act 1995, which pertain to the three types of inheritance.
There are three administrative bodies responsible for the administration of the deceased's property in tandem with the three types of inheritance mentioned above. These are the Civil High Court, the Small Inheritance Section, and Amanah Raya Berhad.
Islamic Heritage Legislation
The legal framework governing inheritance also applies to Islamic heritage. Islamic inheritance, falling under the three types of inheritance, must be administered in accordance with the relevant Acts, in parallel with the type of property. For example, small estates are administered in accordance with the provisions of the Small Estates (Distribution) Act 1955, ordinary inheritance in accordance with the Probate and Administration Act 1959, and the procedures prescribed under the Civil Court Rules (Rules of Court, 2012), while simple property is governed by the Trust Corporation Act 1995.
In the case of Jumaaton and Raja Delila v. Raja Hizaruddin, the Syariah Court of Appeals has determined that the Syariah court does not have jurisdiction over probate matters and letters of administration of inheritance, as these fall under the List of Federal Legislative Powers. The related laws, as stipulated in the Probate and Administration Act 1959, are not exempted for Muslims.
The Supreme Court case of Mohamed Habibullah bin Mahmood v. Faridah binti Dato’ Talib has acknowledged that inheritance administration falls under the Federal Legislation List (List 1 of the Ninth Schedule, Federal Constitution), and is not exempted for Muslims.
Nevertheless, the allocation of the deceased's assets must comply with the law applicable to the individual. In the case of Muslims, Islamic law, known as "Faraid," must be employed because it is the relevant law applicable to the situation.
Section 12(7) of the Small Estate (Distribution) Act 1955. [Act 98] states,
“The Collector shall ascertain, in such manner as may be most appropriate, the law applicable to the devolution of the estate of the deceased, and shall decide who in accordance with that law are the beneficiaries and the proportions of their respective shares and interests.”
The Syariah court lacks jurisdiction in determining an inheritance as well as ordering the distribution
resolved by the Syariah Court of Appeal in the case of Jumaaton and Raja Delila v. Raja Hizaruddin, where it was ruled that probate and administration matters fall under the exclusive Federal legislative jurisdiction as stipulated in Item 4(e)(i) of the Federal List, thereby precluding the State Legislature from enacting laws on the matter or allocating jurisdiction to the Syariah Court.
However, the distribution of Islamic inheritance is subject to laws that are specific to Muslims, covering aspects such as the determination of heirs, the calculation of each share, and other related matters, all of which are governed by Syariah law. The State Legislature has jurisdiction over these matters and is, therefore, empowered to legislate laws related to them.
The Syariah Court, as a state institution that adjudicates Islamic legal matters, has a limited role and authority in matters related to Islamic Heritage. Concerning the distribution of Islamic inheritance, the Syariah Court's role is restricted to settling disputes that may arise over matrimonial property, testate, grants, waqfs, vows, and other related matters. It is advisable to seek the Syariah Court's opinion on such issues. The Syariah Court also has jurisdiction to confirm the rightful share of heirs by issuing a Faraid certificate or inheritance certificate. In the case of Azzaharuddin bin Mohd Nadzir v. Nordin bin Mohd Nazir & Others the Syariah High Court ruled that the Syariah Court does not have the authority to hear and decide on declaring a property as an inheritance because there is no clear provision in any laws that apply to Syariah Courts that enable them to determine the people entitled to a portion of a deceased Muslim's estate or the proportion to which each individual is entitled. The determination of the heirs and their respective shares are outlined in the Faraid certificate. As such, the decision of the Syariah Court regarding the above-mentioned matters should be taken into account when distributing the inheritance.
Administration of Muslims’ Heritage
The administration of Muslim heritage refers to the process of managing the deceased's estate, which includes collecting the deceased's property, settling debts and balances, and distributing the assets to the rightful heirs. This process requires completing an inheritance administration process before an inheritance distribution order can be issued. The process involves various steps, such as applying for the inheritance property by the eligible person, conducting an inheritance search, submitting an application for the order, and issuing the distribution order. All of these steps must comply with the legal provisions mentioned in the three Federal Acts. This process involves multiple parties, including the government, relevant authorities, the court, the heirs, and in-laws, and is subject to a combination of Civil and Syariah Laws. The parties involved share the jurisdiction over the process.
Issues in The Islamic Heritage Administration Process
The Islamic Heritage administration process involves resolving various issues, such as:
Determination of Inheritance Property
One important aspect of inheritance administration is determining the property that belongs to the deceased and qualifies as inheritance, whether it is movable or immovable. Several requirements must be met before the intestate property can be classified as inheritance, such as:
i. After deducting death expenses or funeral expenses: The expenses associated with managing the deceased's remains are typically covered by their estate. These expenses may include the purchase of shroud equipment and coffins, as well as wages for those who prepare the body for burial, dig the grave, and transport the deceased to the burial site using either a stretcher or a hearse.
ii. Debts of the deceased: It is important to determine and settle the outstanding debts of the deceased first, as this must be done before the remaining balance of their estate can be distributed as an inheritance.
iii. Testate (Wasiah): Testate refers to a declaration or statement made by a person with the intention that a specific action will be taken immediately after their death or until the intention is revoked. In Islamic law, a person can bequeath up to one-third of their property. If the terms
and conditions of the will are met, the property bequeathed will not be considered part of the inheritance.
iv. Grants (Hibah): According to the shariah, grants refer to an aqad that involves the transfer of property from one person to another during their lifetime without compensation ('iwad), such as by changing the name of the grantee on a land, house, or car grant. Once the transfer is complete, the property no longer belongs to the deceased's heirs and is excluded from the list of Faraid property or inheritance.
v. Matrimonial Property: Matrimonial property is the property acquired jointly by the husband and wife during the effective marriage according to the conditions determined by Shariah laws.
If there is a death, for example the death of the husband, the wife has the right to claim conjugal property and it does not fall into the inheritance. This means that if the husband dies, the wife has the right to claim the conjugal property and the right to Faraid (inheritance property).
Determination of Heirs
The heir is the individual entitled to receive the deceased's inheritance, determined based on al-Quran, al-Sunnah, ijma (consensus), and ijtihad. This determination is not limited to identifying the heirs but also extends to defining their portions in specific cases. The determination must conform to the rules and conditions of inheritance, as well as the categories of heirs and their respective shares.
The Syariah Court establishes and sets the determination of heirs and their shares with the issuance of a Faraid certificate. The Faraid certificate allocates the share that each heir is entitled to receive, and the distribution adheres to Faraid law or Islamic inheritance principles. However, heirs can enter into an agreement and submit a Letter of Agreement and a Letter of Rejection (Takharuj) or a Letter of Family Agreement to amend the distribution of the inheritance. The distribution is executed in accordance with the applicable Letter of Agreement or Letter of Consensus.
Make an Application
The procedure for distributing the inheritance property must follow the prescribed procedure as follows:
(i) Large Estates
The administration of large estates in Malaysia is governed by the Probate and Administration Act 1959.
To obtain a power of attorney to administer the estate, an application must be made in the Civil High Court by anyone with interest in the property, including Amanah Raya Berhad. Depending on whether the deceased left a will, the application can be for either inheritance without a testate or with a double testate. The Act and procedures in the Civil High Court set certain requirements and procedures for applications.
After obtaining the power of attorney to administer the estate, the applicant must register themselves at the land office as the holder of the deceased’s property. Then, they must list all the deceased’s assets and obtain a Faraid certificate from the Syariah court. Finally, an inheritance order according to Faraid law must be applied for, and distribution can be made either by mutual agreement or according to Faraid law.
(ii) Small Estates
Applications for the distribution of small estates may be submitted by eligible persons. These include (a) intestate heirs, such as male or female widows, male or female children, mothers or fathers, the Islamic Religious Council (Baitulmal), and others; (b) creditors and caveators; (c) buyers who have a valid sale and purchase agreement; (d) mortgagees or leaseholders of the land; (e) chiefs or Settlement Officers directed by the Land Administrator; and (f) Amanah Raya Berhad.
To apply, eligible persons must complete Form A and provide several documents, including a death certificate, burial permit, documents related to intestate property, and a property search certificate. Form A must be submitted to the Distribution of Estate/Land Office where the immovable property is located.
The Small Inheritance Officer or Inheritance Settlement Officer will then settle the inheritance in accordance with Syariah law. If all heirs entitled to the deceased's estate agree, a consensus distribution can be implemented, and a distribution order will be issued. The heirs must submit the land title (Grant) to the relevant Land Office for the purpose of registering the distribution order. For immovable property, the distribution will be directly made to the institution related to the property.
(iii) Simple Estates
The inheritance comprises only of movable property, such as cash not exceeding RM 600,000.00, shares, Employees Provident Fund (EPF), Amanah Saham Nasional (ASN), Amanah Saham Bumiputera (ASB), cars, bank savings or other assets, as well as other movable property. The distribution of this simple inheritance requires an application to be made to the General Director of Amanah Raya Berhad. The distribution of inheritance is then allocated to the rightful heirs based on the proportions specified in the Faraid certificate from the Syariah court.
Arbiter
The arbiter is the entity responsible for issuing the distribution order, which is determined by the forum in which the application is submitted, such as the High Court, Estate Settlement Officer, Land Administrator, or Amanah Raya Berhad.
Section 12(7) of Act 98 Small Estates (Distribution) Act 1955 only states;
“The Collector shall ascertain, in such manner as may be most appropriate, the law applicable to the devolution of the estate of the deceased, and shall decide who in accordance with that law are the beneficiaries and the proportions of their respective shares and interests.”.
Distribution Order
A distribution order is a legally binding order issued by the arbiter. In cases involving immovable property, the distribution order must be presented to the relevant land office for registration. The distribution order for Islamic inheritance is made in accordance with Islamic law (Faraid), or through an agreement reached among the heirs.
Conclusion and Suggestion
The administration of Islamic inheritance is a multistage process that involves several procedures, which can pose various challenges. The management and administration of Islamic inheritance involve at least four institutions, along with various written laws and procedures that can create “confusion”
among the public. Challenges can arise not only during the legal process and estate administration but also after the distribution order has been issued.
Issues After Order
Despite the issuance of a distribution order, certain heirs may not be able to have their shares registered due to specific legislation. For instance, the Land Act 530 (Group Settlement Areas) Act 1960, only allows registration for two joint owners, which means that distribution orders involving more than two individuals cannot be registered. Similarly, Malay Reserve Land only allows ownership registration for Malays, and if a distribution order grants rights to Muslims but not Malays, those rights cannot be registered. Furthermore, the National Land Code (1956) prohibits the registration of land rights for non- citizens, which means that distribution orders granting land rights to non-citizens cannot be registered due to these legal constraints.
Other Issues
There are various issues that may arise in the administration of Islamic inheritance that are not directly related to land registration. For instance, the accuracy of the distribution order may be challenged, particularly if the arbiter is deemed untrustworthy. Another issue is the treatment of adopted children, especially if the adopted child is not entitled to inherit property under Islamic law. There may also be
issues related to movable property, such as nominees in EPF, LUTH, and insurance policies.
Furthermore, there may be isolated issues and problems that require confirmation and an order from the Syariah High Court, such as the issue of simultaneous death, the intentional or unintentional killing of the mother by an heir, unborn children, and other similar matters.
Suggestion
The issue of legislation and administration of Islamic inheritance is a complex and multifaceted problem. However, the advent of electronic systems, such as e-syariah and e-court, which facilitate and expedite the submission of documents to relevant institutions and enable multitasking, has helped to address some of the challenges associated with this issue.
Legislative Proposal Substantive Legislation
This paper presents a proposal to distribute and consolidate written legislation pertaining to Islamic inheritance. The proposal suggests a substantive written law that explains the principles of Islamic inheritance, eligibility of applicants, and applications for probate or estate administration. The proposed act incorporates provisions from existing laws, namely the Probate and Administration Act, the Small Estates Act, and Amanah Raya Berhad. It includes processes, powers, and functions related to properties, and grants the Director of Amanah Raya the authority and responsibility to apply for probate and administer the estate in three institutions. The proposal also suggests provisions for applying for a Faraid certificate in the Syariah Court within a certain period in the event that qualified persons do not apply for it after the death of a Muslim. Additionally, the proposal includes provisions for conducting searches, determining large, small, and simple estates, and outlines the basic application process for the administration and distribution of inheritance. The proposed act is recommended to be named as the
“Islamic Inheritance Act”.
Procedural and Judicial Law
This paper proposes the establishment of a new act that includes an institution with judicial authority to decide on matters related to Islamic heritage at the local level. All provisions relating to applications, enquiry procedures, hearings, evidence, and orders are included in this act. The proposed act suggests no major changes to the structure of judicial institutions related to Islamic heritage, except that the authority of the High Court should be transferred solely to the Syariah Court. It is suggested that this act be named the "Islamic Inheritance Court Act." The membership of this institution should consist of individuals who are qualified and possess sufficient knowledge in the fields of civil and syariah law.
Many graduates from Higher Education Institutions and Public Universities possess such qualifications and could join these institutions.
Law of Faraid, Testate, and Grants
One particular substantive issue that arises from Islamic inheritance law pertains to Faraid, testate grants, and matrimonial property. It is proposed that a specific act be enacted to clearly outline these issues. The act should apply to all states and should also address related issues such as inheritance under Group Settlement and Malay Reserve Land. Additionally, the act should provide guidance on the determination of the distribution and the allocation of shares according to Islamic law.
Closing
The rise in unresolved Islamic heritage cases is an undeniable reality. Urgent action is necessary, as any delay will exacerbate the situation and give rise to additional issues. All relevant parties must collaborate to find a resolution. Estate settlement is a collective responsibility, and a comprehensive solution necessitates cohesive legislative power, well-defined institutions, and consistent methods and procedures.
References
Age of Majority Act 1971 (Act 21).
Amanah Raya Berhad Act 1995
Azzaharuddin bin Mohd Nadzir v. Nordin bin Mohd Nazir & Others [2009] 4 ShLR 106.
Contract Act 1950.
Distribution Act 1958.
Evidence Act 1950 (revised 1971).
Federal Constitution.
Guardianship of Infants Act 1961 (Act 351).
Interpretation Act 1948 & 1967.
Islamic Family Law (State of Selangor) Enactment 2003.
Jumaaton and Raja Delila v. Raja Hizaruddin [1998] 6 MLJ 556.
Kamus Dewan 3rd Edition.
Land (Group Settlement Areas) Act 1960.
Land Act 530 (Group Settlement Areas) Act 1960.
Mohamed Habibullah bin Mahmood v. Faridah binti Dato’ Talib [1992] 2 MLJ 793.
Muslim Wills Enactment (Selangor) 1999.
National Land Code 1965.
Power of Attorney Act 1949 (Act 424).
Probate and Administaration Act 1959.
Public Trust Corporation 1995 (Act 532).
Small Estate (Distribution) Act 1955 [Act 98].
Strata Title Act, State Malay Reserve Enactment, Land Acquisition Act 1960.
Trustee Act 1949 (Act 208).
