Question # 341: My question is regarding inheritance. My father retired from government service in 2013 and we received the amount of pension, gratuity of our father in his life. Now after his death does the laws of inheritance apply on it or not. Similarly, on the insurance money received after his death do the inheritance laws apply.

bismi-llahi r-raḥmani r-raḥīm,

Assalamu ‘laikum warahmatullahi wabarakatuh,

All praise and thanks are due to Allah (سبحانه و تعالى), and peace and blessings be upon His Messenger (صلى الله عليه و سلم).

Dear questioner,

First of all, we implore Allah (سبحانه و تعالى) to help us serve His cause and render our work for His sake.

Shorter Answer: It is permissible for a man to divide his wealth among his heirs during his lifetime when he is in good health, so long as he treats all his children fairly, both male and female. However, such a division is not considered inheritance according to the shari’ah; rather, it is considered a gift (Hibah) provided that all the conditions of the validity of a gift set by the shari’ah are met. On the other hand, distribution of the estate according to Islamic Inheritance Law applies only after the death of the one who is leaving it behind.

Next, although Life Insurance is haraam (prohibited) in Islam, it is halal (permissible) when the money is transferred to the legal heirs, provided that the money is not haraam in and of itself (such as wealth stolen or taken by force). The sin is only on the one who acquired the insurance policy (the deceased). Hence, the money received from the insurance should be divided among the legal heirs according to the shares of inheritance allocated to them by shari’ah.

Long Answer: When the person divides his wealth before his death, it is not considered a division of the estate according to the shari’ah; rather, it is considered a gift (Hibah) provided that all the conditions of the validity of a gift set by the shari’ah are met… One of the most important of these conditions is that the beneficiary of the gift must take full possession and enjoy full ownership and complete authority over the gift, being able to freely dispose of it. If the gift-giver passes away before the beneficiary of the gift takes it into his full possession, then the gift is invalid and it becomes part of the deceased’s estate that is to be divided among the heirs as per the shari’ah. Ibn Qudaamah wrote, “If the gift-giver or the beneficiary of the gift dies before the latter takes the gift into his possession, then the gift becomes invalid.” (Al-Mughni)

Hence, during a person’s lifetime, his wealth cannot be described as an inheritance, and those who will be given a share of it cannot be called heirs, because the first condition of inheritance is the death of the testator. There are two issues that are worth pointing out here:

  • If the father wants to give his children – only – something whilst he is still alive, that is described as a gift or present, and it is permissible for the father to do that, but that is on condition that he treat all his children fairly, both male and female.

Al-Bukhari narrated that ‘Aamir said: I heard al-Nu’maan ibn Basheer (رضي الله عنه) on the minbar saying: “My father gave me a gift and ‘Amrah bint Rawaahah (his mother) said: ‘I will not be happy until you ask the Messenger of Allah (صلى الله عليه و سلم) to bear witness.’ So he went to the Messenger of Allah (صلى الله عليه و سلم) and said: ‘I have given a gift to my son from ‘Amrah bint Rawaahah, and she told me to ask you to bear witness, O Messenger of Allah.’ He said: ‘Have you given a similar gift to all your children?’ He said: ‘No.’ He said: ‘Fear Allah and treat your children fairly.’ So, he came back and took back his gift.”

[However,] the jurists differed in opinion whether or not he is obliged to divide it equally and justly between them; the most preponderant opinion is that he is obliged to do so. Moreover, they also differed in the matter of dividing it equally between them, the majority of the jurists are of the view that he should give the male the same share as the female, and this is the preponderant opinion. However, some jurists are of the view that he should give the male twice the share of the female like their share in the inheritance.

  • If the father wants to divide his property among all his heirs, it is permissible for him to do that on condition that he does not deprive some of them and he does not detract from their rights. However, it is not encouraged for anyone to do that, because of what it may cause of some of the children being tempted by that wealth into falling short in honoring their father. Moreover, he himself may need that wealth after it is no longer his. He may have more children, other than those to whom he gave that wealth, in which case those new children would be deprived of having a share of their father’s wealth with their siblings.

It should be noted that if handover of a gift to children is deferred until after one dies, then it becomes a bequest, and it is proven in the hadith that “There is no bequest to an heir.” Such a gift should be put back with the estate and shared out according to the laws prescribed in Islam.

Hence, it is permissible for a man to divide his wealth among his heirs during his lifetime when he is in good health, so long as he does not intend to cause harm to some of the heirs, by withholding from some, or giving some less than they are entitled to for the purpose of harming them. This is regarded as a gift from him to his children, and he has to treat them fairly.

Next, commercial insurance of all types is haraam, because it involves Riba, gambling and ambiguity, as we have explained in the answer to Question # 72… This is what is to be said to the owner of the money, and this is the basic principle with regard to the ruling on this issue.

But it is a different matter when the money is transferred to the heirs, provided that the money is not haraam in and of itself; rather it is haraam because of the way in which it was acquired… (as a result of an insurance contract). Riba, gambling and ambiguity have to do with the money that is haraam because of the way in which it is acquired; the money is not haraam in and of itself. If the money is haraam because of the way in which it is acquired, the sin is only on the one who acquired it and there is no sin on the one who engages in a transaction with the one who acquired it, such as buying, selling, gift-giving, or hosting a guest.

The evidence for that is the fact that the Prophet (صلى الله عليه و سلم) used to engage in transactions with the Jews in Madinah, buying and selling, and he used to eat with them, even though Allah, may He be exalted, had described them as consuming Riba and taking people’s wealth unlawfully.

Based on that, when this money that was acquired by haraam means was transferred to the heirs, it became halal for them. This is the view of the Maalikis and was regarded as more correct by Shaykh Ibn ‘Uthaymeen (may Allah have mercy on him).

Al-‘Allaamah Muhammad ‘Ulaysh al-Maaliki (may Allah have mercy on him) said: There is a difference of opinion concerning wealth that was acquired by haraam means, such as Riba and invalid transactions. If the one who acquired it in that manner dies and leaves it behind, is it permissible for the heirs – which is the correct view – or not? As for wealth that is haraam in and of itself, and its rightful owner is known, such as wealth that was stolen or taken by force, it is not permissible for the heir. (Manh al-Jaleel Sharh Mukhtasar Khaleel)

Shaykh al-‘Uthaymeen (may Allah have mercy on him) was asked: If a person inherits wealth from someone, and he knows that part of this wealth, such as ten thousand or twenty thousand – is obviously haraam Riba, but he does not know about the rest, or it is mixed, then what should he do with the Riba that is obviously haraam?

He replied: There is nothing wrong with it, and it is halal for him, because he took possession of it in a permissible manner, namely inheritance. But if you know that this is the property of a particular person, and that the deceased took it by force, then in that case it is not permissible for you. But if it was haraam because of the way in which it was acquired, such as Riba and the like, then in this case there is nothing wrong with it. (Liqaa’aat al-Baab al-Maftooh)

[Hence, the money received from the insurance] … should be divided among the heirs …according to the shares of inheritance allocated to them by shari‘ah.

(The above reply is based on various answers by Islamqa.info and Islamweb.net, a web site belonging to the Ministry of Awqaf and Islamic Affairs in the State of Qatar)

Allahu A’lam (Allah (سبحانه و تعالى) knows best) and all Perfections belong to Allah, and all mistakes belong to me alone. May Allah (سبحانه و تعالى) forgive me, Ameen.

Wassalaam