Mrs Arfat Selvam, President of MuslimFinancial Planning Association
Ladies and Gentlemen
I am happy to be here this morning to join you for the opening of the seminaron Wills, Inheritance and Estate Planning.
2. Let me begin by congratulating the Muslim Financial Planning Association for organizing this seminar. I am confident that this seminar will provide a platform for practitioners, including asatizah, lawyers as well as financial and estate planners, to further understand the issues surrounding Muslim estate planning and to contribute to its progress. I commend the Association on its efforts to raise awareness of the importance of estate planning in the Muslim community.
Rising Affluence and Confidence in the Muslim Community
3 The Muslim community continues to make significant progress. More Muslims are reaching higher levels of education[1] and the median incomes of Malay/Muslim households have tripled since 1980[2]. Like fellow Singaporeans, the community has a growing middle class, with the proportion of workers in administrative, managerial, professional and technical related jobs quadrupling over the last 20 years. As the community continues to progress and evolve, we will naturally see a growing number of Muslims owning more assets, and becoming more interested in taking charge of their assets and finances.
4 At the same time, the Muslim community, like the rest of the Singaporean society, is ageing as people live longer. As people grow old, they will inevitably think about the next generation, and how they should plan their estate.
5 In this globalised and networked world, Singaporean Muslims travel, live and work in many different countries. They are exposed to alternative practices in estate management which differ from Faraid but are Syariah-compliant according to religious teachers in those places. One such example is nuzriah, which is practiced by Muslims in Yemen. The underlying principle of these alternative practices is that distribution of estates according to Faraid may be ‘rearranged’ so long as the legal beneficiaries consent to the arrangement.
6 Together, these trends mean that financial planning and estate planning will become increasingly important in the future. Hence, it is timely that the Muslim Financial Planning Association has organized this seminar.
Role of AMLA within a Secular Civil Law Framework
7 Singapore is a multiracial, multi-religious society governed by secular laws. These laws allow every Singaporean to practice his own faith and culture freely while honouring our common spaces. Whether a community is big or small, we are free to practice our own beliefs in Singapore.
8 While secular laws govern all Singaporeans, with the enactment of the Administration of Muslim Law Act (AMLA) 40 years ago, Muslims in Singapore have been allowed some latitude to govern family matters like marriage, divorce and inheritance. There are many commonalities in the legal principles of Civil Law and Muslim Law, such as the doctrine of equity which exists in both legal systems. However, there are also some differences, for example, in matters of inheritance. We need to understand these differences so as to be able to live comfortably and confidently as Muslims in a secular setting. The dynamic nature of Muslim law allows us to do so.
9 Whenever differences arise between the practice of Civil and Muslim Laws, the Islamic Religious Council of Singapore (MUIS) adopts a progressive approach. MUIS’ legal committee, or otherwise known as the Fatwa Committee, would issue fatwas to clarify the religious standpoint. These fatwas help resolve some of the potential issues that may arise because of the different treatment under Civil and Muslim legal systems.
10 The role played by the Fatwa Committee is critical in facilitating Muslims living harmoniously in modern societies in accordance with Muslim principles. Our underlying concern must be to ensure that Muslims in Singapore can continue to practice their faith and at the same time benefit from the wisdom of the Civil system. MUIS and the Fatwa Committee will therefore continue to adopt the progressive approach in facilitating the religious life of Singapore Muslims.
The Issue of Joint-Tenancy
11 One of the issues that today’s seminar will look into is that of joint-tenancy. Under a joint-tenancy agreement, the last surviving owner gets all of the rights of the property. The deceased owner, usually the spouse, will not be able to distribute to beneficiaries any rights to the property as the rights held in a joint-tenancy agreement are absolved at the moment of death and do not form part of the deceased owner’s estate. A recent case in the High Court has found that this survivorship principle applies to Muslims as well. Problems arose because the civil law on joint-tenancy appeared to be in conflict with an earlier fatwa issued by MUIS on joint-tenancy, which stated that the deceased owner’s rights should be distributed according to Faraid.
12 The Fatwa Committee has been reviewing its fatwa on joint-tenancy, and has since updated its position. The updated fatwa now gives Muslim joint-owners of a property the option of adopting the survivorship principle using Islamic legal instruments, such as the hibah ruqbah or nuzriah. For example, the joint owners in a joint-tenancy agreement can use hibah ruqbah or nuzriah to state that their share of the property is to be given wholly to the surviving joint tenant. Hence, the fatwa allows for a Muslim to adopt a civil law arrangement while remaining in harmony with Islamic principles
13 It is also important to note that while faraid is the paramount law governing inheritance within the Muslim law system, the shares of beneficiaries under faraid can be changed if all the rightful beneficiaries agree to the manner in which the shares are to be distributed in an estate. There is nothing to prevent a son or a daughter from returning their share to their widowed mother who may need the money more. This shows that faraid can be flexible, encourages compassion and amicable resolution of conflicts.
14 However, there will still be issues if other inheritors under faraid object to the survivorship principle. Nonetheless, this fatwa is an important step in the right direction. The next task would be to educate the community about the fatwa.
Role of Institutions
15 Going forward, as in any dynamic society, we should expect to come across other issues related to inheritance and estate planning. The guiding principles to deal with these issues are clear. First, the Fatwa Committee will continue to develop fatwas that are beneficial to the community, to provide guidance and clarity on complex issues. Second, the fatwas will try to minimize any gaps or perceived contradictions between civil and Muslim law. Third, the Fatwa Committee will continue to adopt a progressive approach when deliberating on fatwas, keeping abreast of the latest developments in both Islamic and civil laws. Our institutions have to evolve as the environment changes so as to keep the practice of Islam relevant to all times.
16 As the issues emerge, MUIS will continue to study the issues, get feedback from our stakeholders and plan the necessary action to clarify the direction. The Fatwa Committee will also learn from other legal systems on how harmonization is being carried out, by monitoring developments in Islamic law in other countries and adapt what are useful and appropriate for local use. However, public education on the rights and wrongs is critical. The community must be informed of the latest religious thinking, so that we can guard against ignorance and misinformation.
17 Hence, I am happy to see that a number of concerned practitioners and professionals came together last year to look into this need among the Muslim community in Singapore for a body which can provide the expert advice and guidance on financial planning. These professionals have formed the Muslim Financial Planning Association.
18 We should continue this momentum and encourage more practitioners and professionals in the community to come together, especially when new developments arise. They can study the developments, and put forth well-thought through proposals to our key organizations. I welcome wholeheartedly ideas that contribute to the well-being of our community and nation.
19 Today’s seminar is an important effort. Many of the issues related to estate planning are complex, especially when we deal with modern financial instruments such as structured products. The Association should work closely with MUIS to understand the issues, discuss on the best approach and to establish an accessible programme that will better reach out to the public.
20 In the long term, I understand that the Association aims to work towards enhancing awareness and understanding of financial planning and principles in Islam. I think this is a good move, as it will help practitioners and public better understand the interaction of civil and Muslim law.
21 On this note, allow me to once again congratulate the Muslim Financial Planning Association and wish all of you a fruitful seminar.
22 Thank you
[1] 70.5% of the resident workforce in 2008 attained secondary and higher qualifications, as compared to 19% in 1980.
[2] Median monthly household income for Malays has more than tripled from below $800 in 1980 to $3100 in 2005. This increased to $3140 in 2006 and $3310 in 2007.
