Dave Ananth, Mohammad Anas Rahim and Barney Mahendran
Auckland, June 4, 2023
A Will is a statement by a will-maker, or testator, of how he or she wants their property (estate) to be dealt with upon his or her demise.
Two governing principles of Wills are that (a) the testator’s ascertainable intentions can be upheld and (b) great care be taken to determine whether a testator’s wishes are genuine, given that he or she is no longer present to speak for himself or herself.
Albeit changes made by the will-maker, Section 20(1) of the Wills Act 2007 states that Will’s words disposing of property apply to circumstances as they are when the will-maker dies, no matter the change in circumstances. Excepting discretionary trusts, unit trusts and companies, all other property, including financial assets, could form part of the will-maker’s estate to be covered by and disposed of by the Will.
A Will is thus a legal document enabling testators to decide exactly how their estates are distributed among the beneficiaries.
Islamic Sharia principles and guidelines laid out in Islamic financial instruments may be incorporated into Wills in New Zealand as, besides being the testator’s wishes, these decide exactly how a Muslim testator’s estate is distributed on his or her demise. These Islamic financial instruments include Faraid, Wasiyyah, Hibah and Waqf.
Again, every Will can be challenged.
As with other testators in the wider New Zealand community, Muslims dying without a Will, or dying intestate, not only run the risk of having their assets left behind but may end up with their worldly assets not distributed according to Quranic guidelines.
Islamic law pre-determines who inherits the assets left behind by a Muslim, with the estate being primarily divided between the spouse, children and parents using specific calculations.
The Succession System
The Islamic law of inheritance – Faraid – is a succession system determining the distribution of a Muslim’s estate. Faraid protects the rights of eligible heirs with predetermined fixed entitlements. Some of the key inheritance rules include:
Husband: Inherits Half (1/2) if the deceased has no children or a quarter (1/4) if the deceased has children.
Wife: Inherits a quarter (1/4) if the deceased has no children or an eighth (1/8) if the deceased has children.
Daughters: Inherit half (1/2) if the deceased has only one daughter and no sons, or two-thirds (2/3) if the deceased has multiple daughters and no sons (shared equally between all daughters).
Son and daughter: Inherits a shared portion with a 2:1 ratio.
Father: Inherits a sixth (1/6) if the deceased has children.
Mother: Inherits a third (1/3 if the deceased has no children or siblings, or a sixth (1/6) if the deceased has children or siblings.
The significance of Wasiyyah
Wasiyyah (Islamic Will) is the declaration that people of the Islamic faith make whilst alive regarding their property and the arrangements according to Islamic law to be carried out after their death.
This is therefore akin to a Will in New Zealand law as defined in Section 8 of the Wills Act 2007. Wasiyyah enables the bequeathment of one-third (1/3) of a Muslim’s estate to non-heirs. In helping to make the process of claiming assets easier, Wasiyyah is important as it enables Muslims to live in peace by being very aware of what happens to their assets after death.
Hibah (gifting) enables unlimited devolution of an estate to non-heirs.
Hibah means a gift or a voluntary gift and involves the transfer of ownership of a Muslim’s assets to beneficiaries, which include other people who are non-heirs, without any consideration. It is usually done when the owner is still alive, but the assets involved can also be distributed after death.
Waqf (charity) pertains to charitable causes.
Waqf is a financial instrument encompassing both private and public aspects and the arrangement involves the owner endowing his property in favour of persons or objects. Making a waqf in favour of heirs or non-heirs results in the founder divesting himself of the legal ownership of the estate.
However, as opposed to the immediate endowment aspect in Islamic waqf, the ‘divestment’ in New Zealand only comes into operation in a Will upon the Muslim testator’s demise, thereby fulfilling his or her charitable intentions.
Wasiyyah, Hibah and Waqf are therefore estate planning tools to enable Muslims to accommodate Faraid.
It appears that these Islamic instruments involving the distribution of a testator’s estate are in no way contradictory to the divestment of property by a testator to the recipient heirs or beneficiaries as provided for in Section 20 (1) of the Wills Act 2007.
It can be argued that the Wills Act 2007 does not in any way disallow the incorporation and application of Islamic Sharia principles, guidelines, and Muslim tradition in a Muslim testator’s Will.
Untested in New Zealand
A dearth of case law in New Zealand regarding testate Wills drafted in accordance with and divesting property in line with Islamic principles not only imply that New Zealand legislation is yet to be tested as regards the claims against these Wills but that there is also no set precedent regarding Wills in New Zealand for Muslims seeking to implement Islamic divestment requirements in their Wills.
The question, therefore, is whether a Will, as defined in Section 8 of the Wills Act 2007 and incorporating Sharia law principles and guidelines as provided in the abovementioned Islamic financial instruments, is inconsistent with Section 8 of the Wills Act 2007 and is therefore open to challenge by disgruntled parties recognised as being eligible under New Zealand law to share in the estate.
The basis of this challenge, notwithstanding a testator’s final wishes, would be the inequality in estate distribution solely because of the application of Sharia law in the distribution of the estate.
To help answer the question we now turn to Australian case law.
In Omari v Omari (2012), an Imam confirmed in the Supreme Court of the Australian Capital Territory that the standard tradition in Islamic inheritance law was to leave full shares to the sons and half shares to the daughters.
A witness also confirmed that the testator’s wish was for her Will to be strictly in accordance with Islamic inheritance law. The court accepted the expectations within the Muslim faith regarding the disposition of an estate by Wasiyyah where the testator has children.
The important implication here is that the court accepted the division of property as per Islamic guidelines. It may not reflect an acceptance of Islamic principles in the disposition of a deceased Muslim’s estate in a country with secular laws such as Australia but rather an acceptance of the testator’s final wishes for the distribution of her estate after her demise even if the wishes followed the guidelines of the testator’s Islamic faith.
The Case for Testamentary Capacity
As such, the testator’s sons were to receive twice as much money as her daughters.
The tests of testamentary capacity were laid down in Banks v Goodfellow (1870). Among these are that the testator understands (i) the nature of his act and its effects, (ii) the nature of the estate which he is disposing of, and (iii) comprehends and appreciate any resulting claims.
No disorder of the mind should poison such actions by the testator. The rationale is that a Will uninfluenced by circumstances such as mental disorder or insane delusion is a better disposition of assets than any that can be made by the law, ruling also that a Will made under such circumstances, which would include dementia, should not be upheld.
In Omari v Omari (2012), the court found that the deceased testator did not understand the nature of her act or its effects, did not understand the extent of the property of which she was disposing, and was not able to comprehend and appreciate the claims to which she ought to have been giving effect.
The testator suffered from advanced dementia and therefore lacked testamentary capacity at the time of Will’s execution. The judge ruled that the Will accordingly had no effect and the deceased died intestate.
It is important to realise that in Omari v Omari, the Will was not challenged on the premise that the principles of Islamic Sharia law and Muslim traditions should not apply in the distribution of the testator’s estate to her beneficiaries but rather on the facts that the testator suffered from advanced dementia at the time of Will’s execution and therefore lacked testamentary capacity.
The common law precedent set in the abovementioned Australian Omari v Omari case supports and adds credence that freedom of testation applies in New Zealand.
This means that a Muslim is free to incorporate the Islamic Sharia principles of Faraid, Wasiyyah, Hibah and Waqf in his or her Will.
The distribution of a Muslim’s estate in a Will, to beneficiaries recognised as being eligible to share in the distribution of a deceased’s estate under New Zealand law, is in tandem with and does not conflict with the provisions of Section 8 and Part 2 Subpart 2 of the Wills Act 2007.
Dave Ananth is Special Counsel Mohammad Anas Rahim is Associate and Barney Mahendran is a Legal Intern at Stace Hammond Lawyer based in Auckland. Mr Ananth is a member of the recently formed Indian Newslink Legal Panel for Communities.
