Question on Child Trust Fund

Answered by Shaykh Faraz A. Khan

Question: Can you please inform me that if I have bought my property solely from my work wages and my children’s monies received from the government, is it permissible in shariah to have a child trust fund drawn up in my last will so as my children inherit the property on my demise? I am also married but my husband did not contribute at all in the property.

Answer: Assalamu alaikum wa rahmatullah,

I pray this finds you in the best of health and states.

If the child trust fund is set up in a manner by which ownership of your property is transferred to your children upon your demise, then that is impermissible. This is because your estate must be divided among all your heirs as per Islamic inheritance law, and your husband is among your heirs. This is assuming he and all other adult heirs do not give consent at that time.

If, however, the child trust fund is set up in a manner by which ownership of your property is transferred to your children in your lifetime, then that is permissible and you need no one’s consent. [Maydani, Lubab]

Equality in Gifts to Children

Having said that, in general one should try to be fair when gifting one’s children and make sure it is done equally. The Beloved Messenger (peace and blessings be upon him) said, “Be fair and just among your children,” and in some narrations with the addition “with respects to gifts.” [Sahih Bukhari]

However, an exception is if there is a legitimate reason to give financial preference to one child, whether son or daughter, in which case doing so is not disliked. Some examples are if a particular child has a greater financial need, a medical condition, or more dependents. [Laknawi, Ta’liq Mumajjad Sharh Muwatta’ Muhammad; Ibn Nujaym, Bahr al-Raiq]

For more info on this issue, please see the following:

Estate Division and the Sunna of Equal Treatment of Children in Gift Giving

Giving While in One’s Final Illness

On a final note, if a person gives while in his/her final illness (deathbed), then there are some limitations. Specifically, wealth given to non-heirs can only be from one-third of the estate. Anything beyond that would need approval of the adult heirs after the person’s death.

Moreover, any gifts to heirs would need approval of all remaining adult heirs after the person’s death. Approval prior to death is of no consequence. [Ali Haydar, Durar Hukkam Sharh Majalla al-Ahkam — Article #879]

And Allah knows best

wassalam
Faraz A. Khan

Checked & Approved by Faraz Rabbani