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Islamic Estate & Trust Planning Services

An increasing number of wealthy Muslims has begun to learn that it is crucial to have legal arrangements in place in relation to their extensive assets and that they are not limited to just leave an estate that will be distributed according to the Islamic inheritance rules only. A Trust would be another attractive alternative.

Apart from staying true to the principles and the spirit of the Islamic law, Trusts afford a great deal of flexibility.

A valid Wasiyyah facilitates the process of unfreezing and distributing your wealth to your loved ones as you wish, accurately and faster.

Trust can be structured to be fully Shariah compliant with the advice and approval from a qualified Shariah advisor. The Shariah advisor will work with other advisors to give guidance on:

  • The nature of the assets eligible to become the trust assets
  • The management of the trust assets
  • The Islamic investment guidelines
  • The overall terms of the deed of trust
  • Qualified beneficiaries
  • Channelling of any impermissible amounts arising from investments

On the other hand, Labuan has distinct law that caters to the unique features of Islamic financial services and structures to provide Shariah certainty and sound Shariah governance to Islamic entities and various stakeholders.

In short, the according to the Labuan Islamic Financial Services and Securities Act 2010 (LIFSSA):

  • Is an omnibus, specific legislation for Labuan Islamic financial businesses and Islamic entities
  • Requires compliance with Shariah principles. Section 6: “Any person carrying on any activity under this Act shall ensure that such activity shall be in compliance with Shariah principles.”
  • Has specific provisions for Shariah governance for the Labuan Islamic entities including the Labuan Islamic Trust
  • Establishes the Shariah Supervisory Council of the Labuan FSA which is the ultimate authority and reference on Shariah matters in Labuan.

A Shariah compliant Labuan Trust was established under Section 105 of LIFSSA, the Labuan Islamic Trust.

Some of the legal provisions on the Labuan Islamic Trust:

  • Enables a settlor to exercise his rights in creating a trust in accordance with Shariah principles
  • Can be for a fixed duration
  • The trust itself or a power exercisable under it can be revocable in whole or in part
  • Terms can be varied
  • Confidentiality is stipulated with few exemptions
  • A Labuan trust, validly created in accordance with or as provided by the LTA, whether in Labuan or abroad, shall be recognised and be enforceable in accordance with its terms, by the courts in Malaysia situated at Labuan
  • Where a Labuan trust is validly created in accordance with or as provided by the LTA, the Court shall not vary it or set it aside or recognise the validity of any claim against the trust property pursuant to the law of another jurisdiction or the order of a court of another jurisdiction.

When structuring an Islamic Trust, advisors need to take into account the individuals assets, the circumstances of his family and heirs, other instruments which he may need, including Hibah (gifts inter vivos), Wasiyyah (will), debts and jointly acquired property rights, as well as the law or laws applicable to him and his assets.

Besides from the Islamic law of succession (Faraidh), there is other alternatives for a Muslim’s assets. It is important for an individual to be familiar with and utilise the methods available in Islamic wealth planning. It is crucial for one to acquire knowledge and appropriate arrangements to enable him to carry out his obligations as a Muslim, prepare for life’s eventualities, take care of his family’s needs in the event of his passing, achieve strategic objectives, minimise costs and prevent family conflict.

On top of all the rules and regulations related to the Islamic Estate and Trust Planning in Malaysia, engaging a good services provider will surely ease your burden when setting up Islamic estate and Trust planning. When you turn to us, we assure you with premium, comprehensive and cost effective services that will put a smile on your face. Contact us today for more information.


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