Unequal Intervivos Within The Islamic Context

Abstract

Intergenerational transfer is commonly discussed from economic, psychological and sociological perspectives. This type of transfer includes two main aspects which are transfers by bequest and inter vivos. The main issue that is debated within economic contexts is the wealth transfer motives from parents to children, which are altruism and exchange motives. Altruism motive indicates that parents are individuals who have wealth that need to be transferred to their children. Parents with good economic resources feel easier to transfer their wealth to children. While, exchange motive which is children can inspire their parents to transfer the wealth by offering them services and care. However, Islam underlines that inter vivos to the children must be equal to avoid disputes among other children. Hence, this study aims to identify whether inter vivos motives are in line to the Islamic requirement or otherwise. It is a qualitative research which employs document analysis method to compare the Western and Islamic theories regarding to the transfers. This study indicates that although most of the Muslim jurists ( Hanafi , Hanbali , Maliki and Syafie ) permit but reprehend hibah for some children. However, hibah is permissible in order to assist their children as supported by Ibn Qudamah and Ibn Taymiyah .

Keywords: Hibahinter vivosintergenerational transfersaltruismexchange

Introduction

Intergenerational transfers from parents to children are essential economic phenomenon by determining the persistence of inequality among children and the capability of individuals and families to smooth consumption (McGarry, 2016). Transfers from parents to children could be in financial assistance, time and health care (Alessie, Angelini, & Pasini, 2014; Fu, 2018; Ho, 2015). Intergenerational financial transfers embody supporting resources to rise household wealth. Through intergenerational transfers, parents will support their children such as to get onto the real estate properties by helping to make down payment (Lee, Myers, Painter, Thunell, & Zissimopoulos, 2018; Mathä, Porpiglia, & Ziegelmeyer, 2015; Wu & Li, 2014) or to induce higher human capital development (Benton & Keister, 2017; Haider & McGarry, 2018; Ihori, Kamada, & Sato, 2016; Zhu, Whalley, & Zhao, 2014).

Parents will transfer their wealth by bequest and inter vivos (Hochguertel & Ohlsson, 2009; Liu, Lu, & Feng, 2017; Nordblom & Ohlsson, 2011; Son & Son, 2018). Bequest is a transfer of wealth to another person after the death of owner (Markowski-Lindsay, Catanzaro, Milman, & Kittredge, 2016). However, main interest in this study is inter vivos instead of bequest due to some constraints of bequest in Shariah (Islamic law) which only permit 1/3 from total wealth and can be transfers for non-legal heirs (Kamarudin & Abdullah, 2016; Md Azmi & Mohammad, 2015).

Previous study indicated that parental income has a significant effect towards giving (Alessie et al., 2014; Alma’amun, Kamarudin, & Asutay, 2016; Brandt & Deindl, 2013; DeBoer & Hoang, 2017; Keister, Benton, & Moody, 2019). It is a major economic resources as parents have less wealth constraints and the ability to provide support to their children. For instance, parents who have large amount pensions, own the house and higher savings will offer assistance to their children (Jiang, Li, & Feldman, 2015; Olivera, 2017).

Parents also care to look at their children’s economic resources. Transfers from parents aim to support the children (Wu & Li, 2014). Children with higher education are less expected to get transfers from parents (Albertini & Radl, 2012; Kalmijn, 2013). Parents are more possible to transfer their wealth to poor economic conditions and low income children (Jiang et al., 2015; Keister et al., 2019; McGarry, 2016; Olivera, 2017; Taniguchi & Kaufman, 2017; Witvorapong, 2015). As a result, parents support will increase the economic level, quality of life and wealth distribution among children (Fan, 2016; Mathä et al., 2015).The children employment status should also be taken into account as employment status is related to the economic resources. Children who are still jobless or studying are more probable to get transfers (Alma’amun et al., 2016; Jiang et al., 2015). Sudden transfers from parents will also help the children who lose their income or are laid off from their jobs (McGarry, 2016). The purpose of transfer is to assist the children to seek a new job. For children who are still studying with no fixed income, support from their parents will ease their financial burden.

Parents also more likely to support their unmarried children, living alone or divorced (Andaluz, Marcén, & Molina, 2016; Jiang et al., 2015; McGarry, 2016). Nevertheless, if a child has a large family with many grandchildren, parents tend to provide financial assistance and care (Fu, 2019; Ho, 2015; Olivera, 2017; Witvorapong, 2015). Support from parents will assist in terms of household expenditure and stabilizing their family (Mohamad, Alavi, Mohamad, & Aun, 2016). Parents transfer their wealth to children who do not have their own house which will help them to purchase a house (Jiang et al., 2015; Mathä et al., 2015). Parental economic strength and children economic weakness indicate the existence of altruism motive.

Previous study also indicated services from children as the main indicator for parents to transfer their wealth. Parents ‘pay’ to their children as the services rendered (Fu, 2019; Jiménez-Martín & Prieto, 2015; Nivakoski, 2018; Park, 2014). There is also the possibility that parents transfer their wealth to encourage their children to take care of them in the future. Therefore, child who provide service and care to their parents is more likely to obtain transfers compared to their siblings (Kamarudin & Nor Muhamad, 2018). Services by these children are usually upon the old age of parents in the form of formal or informal care, instrumental and financial support (Polenick et al., 2016; Taniguchi & Kaufman, 2017; Yukutake, Iwata, & Idee, 2015). Responding to these services is in line with the exchange motive.

Problem Statement

Both motives will lead to unequal transfers which only some children will receive the wealth and the others are excluded. In Islam, inter vivos is similar to hibah within the concept of transferring wealth during lifetime. However, hibah puts some constraint as the gift must be in line with the Shariah concepts which emphasize justice elements and avoid disputes among children (Abdul Rashid & Ahmad, 2013; Ibrahim, 2017; Othman, Mohamed Said, Muda, & Nor Muhamad, 2017). It is based on the Hadith of Prophet Muhammad (p.b.u.h) who ordered that hibah to children must be given equally and not be given to certain or preferred children only.

Research Questions

• What are Major Muslim School opinions on unequal inter vivos?

• What are Traditional Muslim Jurists’ opinions on unequal inter vivos?

• What are Contemporary Muslim Jurists’ opinion on unequal inter vivos?

Purpose of the Study

This study aims to examine the views of Muslim scholars regarding to whether unequal inter vivos is in line with Islam or vice versa. Muslim scholars in this study are classified into three categories which are Major Muslim School, Traditional Muslim Jurists and Contemporary Muslim Jurists.

Research Methods

This study applies qualitative approach by using literature and court case analysis. In order to evaluate Muslim scholars’ views on transfer motives, this study focuses on current research which analyze Muslim scholars’ opinion toward unequal transfers or preferential inter vivos. The literature review analysis is conducted to find information from various research articles (Bernardo, Simon, Tarí, & Molina-Azorín, 2015) and the first step in the theory development process (Yawar & Seuring, 2017). To gain the relevant articles, this study focuses on literature from online database through Google Scholar and university library system (Ogourtsova, Souza Silva, Archambault, & Lamontagne, 2017). This study indicates two articles which are written by Awang and Abd Rahman, (2014), Ibrahim, (2017) and one book by Nor Muhamad, (2011). For court case analysis, this study finds one court case that argue unequal inter vivos which is Muhammad bin Awang and Ors v Awang bin Deraman and Ors [2001]2 JH 165. Court case analysis is applied to demonstrate the practice of unequal inter vivos particularly in Shariah Court.

Findings

Generally, Islamic inter vivos or hibah aims to transfer the wealth for affectionate purposes among Muslims and assist those whore are in need (Md Razak et al., 2015). Hukm for hibah is recommended ( mandub ) (Awang & Abd Rahman, 2014; Ibrahim, 2017). However, hibah from parents to children need to be scrutinized as parents must transfer their wealth without contradicting Syarak and justice. Awang & Abd Rahman, (2014), Ibrahim, (2017) and Nor Muhamad, (2011) outline traditional Muslim scholars’ opinions towards unequal hibah or preferential hibah as in Table 01 , Table 02 , Table 03 , Table 04 , Table 05 , Table 06 and Table 07 .

This study indicates that Hanafi school opined that unequal hibah is valid but reprehensible. Giving hibah equally among children is commendable ( mandub ) not compulsory ( wajib ). Hanafi jurists, Ibn Nujaym and Al-Haskafi stated that this type of hibah is sinful even though it is valid. Abu Yusuf and Al-Shaybani viewed that unequal hibah will lead to injustice. For addition, Abu Yusuf asserted that the objective of unequal hibah is permissible if the aim of this hibah will not harm their children.

Maliki school approved unequal hibah when the parents only transfer a little amount of their property which would not cause dispute among siblings. They also viewed that equal hibah is commendable. Al-Qarafi and Qadi Abd Al-Wahab opined that if parents give all or most of their wealth, it is permissible but reprehensible but Ibnu Rushd and Ibn Juzayr contended that this hibah is invalid.

Hanbali school also agree with Maliki school that unequal hibah is permissible only for a little amount of property. However, it is permissible only when the children have a particular need, for instance disabled children, children with large family, poor children and children who are still studying. This opinions also supported by Ibn Qudamah , Ibn Taymiyah and Hisham Qablan ( Maliki jurists). Ibn Al-Najjar ( Maliki jurists) viewed that unequal hibah is permissible when the other children approve it.

Meanwhile, Syafie school asserted that unequal hibah is valid but reprehensible similar to Hanafi school’s opinion. Ibnu Hibban and Ibn Hajar Al-Asqalani detailed that unequal hibah which lead to injustice is totally prohibited. However, Al-Shirbini opined that the exclusion of children who are disobedient or misbehaved are not reprehensible.

Nonetheless, according to contemporary jurists, Al-Sayid Sabiq, Salih Al-Fawzan, Abd Allah Ibn Abd Al-Rahman, Ali Bassam, Wahbah Zuhayli and Abd Al-Karim Zaydan, unequal hibah is prohibited. While later jurists, Abd Al-Karim Zaydan and Al-Saad argued that unequal hibah is permissible if the children are in need as suggested by Ibn Qudamah such as the children have chronic illness, large family to support and pursuing studies, while misbehaved are excluded. Al-Sayid Sabiq and Inas Abbas asserted that unequal hibah is permissible when other children give the permission.

The different opinions among Muslim Scholars are based hadith narrated by Nu’man bin Bashir which means:

“I heard Nuʿmān ibn Bashīr on the pulpit saying: My father [Bashīr] gave me a gift . . . The Messenger asked: Have you given [the like of it] to every one of your sons? He [Bashīr] replied in the negative. The Prophet said: ‘Be afraid of Allah and be just to your children’. My father then returned and took back his gift.”

In Malaysia, court cases regarding to unequal hibah is valid and legal (Nor Muhamad, 2011). In case Muhammad bin Awang and Ors v Awang bin Deraman and Ors, Al-Marhum (late) Awang bin Deraman (first defendant) had handed over two lot of lands to his two daughters (second and third defendants). However, the plaintif argued that the hibah is unfair because the plaintif is the eldest children. Plaintif argument was based on Surah Al-Maidah , verse 8 and hadith narrated by Nu’man bin Bashir . The court decided that equal hibah is commendable and not compulsory. Therefore, hibah revocation (main dispute in this case) was not accepted (Nor Muhamad, 2011). The decision made by the court was contradictory with Hanafi , Maliki and Syafie school opinions.

Altruisme motives which indicate parents transfers wealth to their children based on children’s economic condition is in line with Hanbali jurists’ opinion ( Ibn Qudamah and Ibn Taymiyah ). The children who are in need such as having a large family to support, suffering health problem and pursuing studies must be assisted by the parents to keep them survived. Meanwhile, exchange motives which indicate parents transfer their wealth as payment for the services and care that are provided by their children is not supported by any jurists. This study opined that exchange motives is allowed as an encouragement for children to take care their parents in the future. This will also control their children’s in order to avoid negative attitudes and behaviors.

Conclusion

Parents play a vital role in ensuring children’s economic conditions improved. This support shows altruistic attitude among parents. By the same token, parents can transfer wealth to their children who have supported and cared about their well-being and health or encourage them take care of parents in the future. However, Islam emphasizes fairness in hibah giving. This study indicates that although most of the Muslim jurists reject hibah for some children, hibah is permissible in order to assist their children as supported by Ibn Qudamah and Ibn Taymiyah.

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