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N.B. Rulings are given in accordance with the Hanafi school of thought

Inheritance of assets placed in a legal trust but substantially 'owned' by the testator

Q: My father passed away earlier this year. He formed a trust, he and my mum were the trustees. Does this trust carry on, or does it have to dissolve? His heirs were the beneficiaries of the trust

 

A: A trust is merely a legal vehicle and not a Shari entity unless it has been made a waqf. Generally, the assets of the Trust and the proceeds are to be inherited by the heirs of the deceased. In principle the Trust should be dissolved unless all the heirs (not only the Trustees) are baaligh and sane and they agree to continue as a Shari partnership. If some heirs are minors and it is in their best interest to continue and the other heirs want to continue then the trust may continue. However, if any of the heirs want their share then the Trust should either be dissolved and paid out or the heir that wants to come out could be bought out in terms of Shariah.

And Allah Knows Best

Was Salaam

Shafique Jakhura (Mufti) MD Mangera (Mufti)

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