What happen to the asset of a Muslim when he/she passed away?
Is it simply distributed, smoothly, according to Faraid Law? It is in fact not that simple at all.
Mr. Mohd Zulkifli bin Ismail, Deputy General Manager as-Salihin Trustee Bhd shared about the real problems faced by Muslim when it comes to estate distribution.
The reality on estate is that while we are alive all the properties that we own, all the assets that we have are all absolutely in our control. We are the sole owner. We can do whatever we want with it. We can sell it if we want, we can take the money from the bank, and any time we want we can transfer the property. Why? Because we are the sole owner. We are the absolute owner of the property.
The problem starts when this line comes in, the “dark line of death” Ataupun “selepas meninggal dunia”. When death occurs we will lose control on all the assets which we have bought and control because we are no more in the world.
So, all our assets now will be converted or will go down to the bottom and becomes the estate of the diseased.
The questions that we need to ask are: Who has the power now? Who has the authority to take the money out of the bank? Who has the authority to pay off all the loans, all the debts that you have left behind? What about the business that you have set up? Who is going to transfer the ownership of the shares and so on? These are the questions. This is where estate planning comes in.
A lot of Muslims out there thought that whenever they pass away, whenever they pass on, all their assets will be transferred to all their loved ones. Why? Because all the Muslims out there think that there is such a thing as “Islamic Law of Inheritance,” or in Bahasa and Arabic what call “Faraid”. So, because of the existence of Faraid, all the Muslims out there thought that upon death, all their properties will go to their loved ones. Unfortunately, it is not true.
Ladies and gentlemen, I will show you some of the facts proving why. Somewhere in the year 2007, a newspaper printed something about RM40 billion worth of assets being frozen. Why? Because the diseased were not able to transfer their properties – RM38 Billion in land property, RM1.5 billion under the registrar of unclaimed money, RM70 million in EPF.
So, even if your EPFs have nominees, in 2007, RM70 million of EPF money got frozen. There are RM1 million worth of titles still in the name of the diseased. So, imagine that is the figure in 2007. This is the figure in 2011: from RM40 billion, it has gone up to RM52 billion.
A lot of Muslims out there are still not conscious about this.
In the unclaimed balance in 2007 it was only RM1.5 billion. But, in 2011 it’s already RM4 billion. Imagine, the figure is going higher and higher. Yet, Muslims out there are still not thinking about doing estate planning.
What about EPF? In 2007, it’s only RM70 million. You’re going to be shocked to see the figure in 2011. It has gone up to more than RM300 million. My God! Yet, a lot of people outside there are still not thinking hard about this. These are true stories that we got from paper clippings. Imagine.