The Impact of It to Banking Industry

1.0Introduction

As part of their lives, individuals are engaged in generating wealth and using this for their own prosperity.The management of this created wealth is an important issue, as individuals are expected to also manage their lives with this wealth. It is the concern of this study to investigate how wealth is perceived by wassiyah method and how it is distributed by individuals in the form of inheritance. Islamic theory of wealth provides useful guidelines in relation to wealth ownership, wealth management and financial planning. The notions of wealth in Islam are based on philosophic foundations derived from two primary sources namely Al-Quran, and Hadith, the sayings of the Prophet of Islam. The whole conceptualization of wealth and its use must therefore be consistent with Shariah or the Islamic Jurisprudence.

In a simple description, there is no restriction for Muslims to transfer their property while they are alive, but upon the death, the estate transfer is automatically subject to faraid and bequest mandatory rules. Faraid has pre-determined the number of shares which eligible heirs should get after deducting burial expenses, debts to Allah and other people, the rights of spouse to mutually acquired property, incomplete life-time transfers and bequest. Due to this, for Malaysian Muslims, leaving a wasiyyah (will) is a crucial part of the Islamic estate planning, as the problem of estate in Malaysia is the most common problem cited in the literature as a result of not leaving a wasiyyah. These unclaimed assets are wastage as they cannot be utilized for economic purposes. Other relevant problems are those such as family disputes, information regarding assets and liabilities not being easily accessible, fraud, and problems related to the nominees. (Alma’Amun,2010)

2.0Research Problem
Islamic estate planning is almost totally neglected by Muslims in general and in Malaysia particularly. Today, in a modern and complex world, leaving a written will is crucial, and it implies that Islamic estate planning for Muslims demands a proper planning beyond the provision of faraid and bequest. Most Muslims in Malaysia do not view estate planning seriously and some of them are sceptical about making a wasiyyah, which is evidenced by having large number of Malaysian Muslims not having wasiyyah. Findings imply that the awareness level of wasiyyah was low reflecting their inadequate exposure of the wasiyyah ruling, professional means of wasiyyah writing and the importance of wasiyyah in estate planning. Thus, wasiyyah practice was a minority activity.

Other findings reflect making a wasiyyah by means of traditional methods either handwritten by themselves or verbal wasiyyah were common. Several factors were identified to be significant to the wasiyyah practice namely amount of inheritance received previously, health status, having children, having adopted children, having grandchildren, knowledge, institutional factor and inheritance law. Other findings show that mass media were the main sources of their knowledge and to increase their awareness. The study also found that there was a conflict of interest in wasiyyah writing providers in terms of increasing awareness, educating people and profit maximization. They also differed in their perception on the ability of wasiyyah alone solving the estate problem comprehensively and showing their concerns over the manipulation of several estate planning instruments to avoid faraid. (Alma’Amun,2010)

3.0Research Questions

I. What is the level of awareness of wasiyyah among Malaysian Muslims? II. What is the level of understanding about Islamic estate planning among Malaysian Muslims?
III. What are the factors that influence the wasiyyah practice among Malaysian Muslims?
IV. What are the roles of Islamic estate planning and wasiyyah for Muslims and how are they affected by Malaysian Muslims circumstances?
V. What are the roles of other methods of estate transfers in Islamic estate planning?

4.0Literature Review
The significances of managing wealth are to avoid any difficulties between the owner of the property and the public which may arise due to improper wealth management and to ensure the circulation of wealth in the community, thus stimulating the growth of the wealth and ensuring a better distribution of the wealth among society (Muda et al., 2006:11). General guidelines of wealth management are as follows: it should not harm the owner, others and the environment; no total privatization as certain properties belong to the public ownership and society has rights towards individual‟s property (Muda et al., 2006:11–12). Taking into consideration that Muslims are educated to manage their wealth not only for themselves but for others as well, thus leads them to allocate a part of their wealth for the purpose of charity in the forms of the donation, gift or waqf. Charitable giving is encouraged in which Muslims could spend out of their wealth on their kinfolk, orphans, the needy, the wayfarer and those who ask, and for the ransom of slaves (Quran, 2:177). Financial planning is a process of meeting an individual‟s financial goals. In order to accomplish his financial goals, a set of strategies or future plans is structured and tailored in line with the individual‟s abilities and needs.

Financial planning involves six steps: it begins with establishing the realistic goals and objectives; gathering the data and information needed; compiling and analyzing data; developing solution and presenting the plan of action; implementing the plan; and monitoring and reviewing the plan periodically. A comprehensive financial planning encompasses a number of critical personal financial areas such as cash flow planning, tax planning, investment management, risk management, retirement planning, estate planning, special circumstances planning, employee benefits and educational planning (Altfest, 2007:6– 10).

Wealth management in Islam does not ignore the obligation to ensure the wealth is circulated as widely as possible and inheritance matter. This is actually the function of wealth distribution, the final stage of wealth management, with the purpose of seeking the proper planning to distribute the wealth through estate planning, business succession planning, charitable and zakah planning. There are plenty of mechanisms for this purpose such as zakah, will, faraid, bequest, hibah and waqf, trust, sadaqah (donations), infaq (gift to Islamic cause), hadiyah (present, gift), nazar (vow) and statutory disposition (Billah, n.d.a; Rasban, 2006:191–199).49 It can be seen that wealth management in Islam covers a wide spectrum in the sense that it brings benefits not only for the individual and the family, but also to society.

In the absence of a will, wealth will be automatically distributed amongst those surviving relatives who are entitled to fixed shares in accordance with the faraid laws. In the absence of the heirs, then the estate will automatically go to the Baitul Mal. For Muslims staying in any country where the dominant law is not Shari‟ah then dying intestate brings such big problems in the matter of estate disposition that the estate will probably go to the government in the absence of any surviving heirs (Haqq et al., 1995:37). Depending upon the individual situation, writing a will in Islam may become obligatory (wajib), supererogatory (sunnah), unlawful (haram), hateful (makruh) or permissible (mubah). When a person has any unfulfilled obligations whether related to the rights of the fellow humans (huququlibaad) such as debts or the rights of Allah (huququl-lah) for instance unpaid zakah or pilgrimage (Hajj) to be fulfilled, he then, is obliged to draw up a will and must declare these rights in his will. If he has absolutely nothing to declare in the will then, it will still be supererogatory for him to draw a will. Under this circumstance, writing a will is encouraged for the benefits mentioned previously.

One should be aware that certain wills are forbidden and unlawful; firstly if it is meant to change the shares which the faraid has stipulated for the heirs or by disinheriting an heir then; secondly, making a bequest in favour of a perfectly legitimate object on the grounds that the testator‟s primary intention is to deprive his legal heirs of any rights on the property and thirdly, making bequest in favour of something forbidden by the law such as alcohols and gambling. Such wills are totally null and void. When the heirs are in need of the wealth, the will writing becomes hateful or giving bequest to someone who is known fasiq or has a tendency to use the property for illegal purposes. It could be permissible if the will is written in order to make a bequest to the poor, non-heir relatives and for the provision of public goods to the society. The category of will which is supererogatory would be useful for estate distribution as a complementary device to faraid in the sense that it allows Muslim to utilize the bequest as a substantial channel to fit the need of Muslims in deciding their estate allocation given by the different cases and situations arising among them (Al-Khin et al., 2005:1044–1045; Tanzil-ur-Rahman, 1980:218; Coulson, 1971:224).

5,0Research Framework

Dependent Variables

Independent Variables

From the diagram above we can see from the framework research the dependent variable from this research is the attitudes of wassiyah practices. Meanwhile the independent variables for this research are sociedemograhic fgactor such as marital status, education level, having non-muslims children, having adopted children and havinf non-muslims parents, awareness level of practices wassiyah was low, making wassiyah by traditional method, economic factros comprised employement status, total value of assets and amount of inheritance received perviously and inheritance low.As we can see the attitudes of wassiyah practices will not affect the independent variables but the independent variable that consists will affect the attitudes of wassiyah practices. All the independent variables will affect the dependent variables.

6.0Research Hypothesis

6.1Sociodemographic factors

• Marital Status

H1: There is no significant relationship between marital status and the wasiyyah practice

H2: There is a significant relationship between marital status and the wasiyyah practice.

• Education Level

H1: There is no significant relationship between education level and the wasiyyah practice.

H2: There is a significant relationship between education level and the wasiyyah practice.

• Having non-Muslim children

H1: There is no significant relationship between having non-Muslim children and the wasiyyah practice

H2: There is a significant relationship between having non-Muslim children and the wasiyyah practice.

• Having adopted children

H1: There is no significant relationship between having adopted children and the wasiyyah practice.

H2: There is a significant relationship between having adopted children and the wasiyyah practice.

• Having non-Muslim parents
H1: There is no significant relationship between having non-Muslim parents and the wasiyyah practice.

H2: There is a significant relationship between having non-Muslim parents and the wasiyyah practice.

2. Awareness level of practices wasiyyah was low

H1: There is no significant relationship between awareness level of practices wasiyyah was low and the wasiyyah practice.

H2: There is a significant relationship between awareness level of practices wasiyyah was low and the wasiyyah practice.

3. Economic factors

• Total value of assets
H1: There is no significant relationship between total value of assets and the wasiyyah practice.

H2: There is a significant relationship between total value of assets and the wasiyyah practice.

• Amount inheritance received previously
H1: There is no significant relationship between amounts of inheritance received previously and the wasiyyah practice.

H2: There is a significant relationship between amounts of inheritance received previously and the wasiyyah practice.

4. Making a wasiyyah by means of traditional methods

H1: There is no significant relationship between making a wasiyyah by means of traditional methods and the wasiyyah practice.

H2: There is a significant relationship between making a wasiyyah by means of traditional methods and the wasiyyah practice.

5. Inheritance Law

H1: There is no significant relationship between Inheritance Law and the wasiyyah practice.

H2: There is a significant relationship between Inheritance Law

and the wasiyyah practice

7.0Reserach Data and Method

7.1Primary data collection methods
With the respect to the data collection approach, a mixed or triangulation method was used. The quantitative research is represented by the collection of data through questionnaires which were quantified before they were analyzed, while qualitative research is characterized by the collection of data through semi-structured interviews. (Alma’Amun,2010) • Questionnaire Design

The questionnaire used for this research was designed in such a way to respond to the already defined research questions. As such, it consisted of six parts: respondent‟s background, wasiyyah practice, practice and attitudes towards leaving a wassiyah , motives of leaving a wassiyah, respondents knowledge on Islamic estate planning and wasiyyah and wasiyyah writing provider. Noting the flaws of applying the questionnaire method, accordingly the construction of the questionnaires was based on previous studies which were carried out within the same area of interest, thus helping to avoid the interviewer from asking unrelated and ambiguous questions. Therefore, for the purpose of investigation awareness and wasiyyah practice, most of the questions were developed with the help of existing studies. (Alma’Amun,2010)

• Sampling
In relation to the sampling for the semi-structured interview, the researcher tried to get as many as respondents as possible from all the big wasiyyah writing providers. Most of the big wasiyyah writing providers were the people who have written much about Islamic estate planning in magazines, books and conference papers. Therefore they were easily identified and fortunately, since they are in the same field, they knew each other very well and helped the researcher to get her potential interviewees. Finally, 15 wasiyyah writing providers from various big wasiyyah writing provider and solicitors were willing to participate. The same justifications provided in the above section regarding the choosing of purposive sampling in questionnaire also apply in the case of the sampling for the semistructured interview. Wasiyyah writing providers selected for interview were those well-known professional people who the researcher believes possessed the needed facts and could give the information sought via in-depth investigation. (Alma’Amun,2010).

References

Alma’Amun.S (2010). “Islamic Estate Planning: Analysing The Malaysian Perceptions On Wasiyyah (Will) And Bequest Practices”.

Muda M. Z; Yusof, W. and Zakaria, Z. (2006). “Konsep Harta dan Kepentingan Pengurusannya Menurut Perspektif Islam” (The Concept of Wealth and The Importance of Its Management According to Islam), in Prosiding Seminar Kebangsaan Pengurusan Harta dalam Islam (Proceeding of the National Seminar of the Wealth Management in Islam) (pp.1-14). Selangor, Malaysia: Universiti Kebangsaan Malaysia (UKM) and Kolej Islam Pahang Sultan Ahmad Shah (KIPSAS).

Altfest, L. W. (2007). Personal Financial Planning. New York: McGraw-Hill Irwin.

Al-Khin, M.; Al-Bugho, M. and Asy-Syarbaji, A. (2005). Kitab Fikah Mazhab
Syafie (The Book of Fiqh of the Shafi‟i School). (Translated by A. Salehan). Volume 5. Kuala Lumpur: Pustaka Salam Sdn. Bhd.

Billah, M. M. (n.d.a). Islamic Financial Planning. Available at: ,
Access Date: 16th May, 2007.