Using Hibah for Muslim Estate Planning in Singapore
What is Hibah?
“Hibah“ is the Arabic word for gift.
When you make a hibah, the legal effect is that the immediate and absolute ownership of the subject of the hibah is transferred to the donee (i.e. the person who receives the hibah).
A hibah ruqba
A ruqba means a hibah (or gift of the absolute ownership of a property) with a condition that if the recipient survives you, the subject of the hibah will belong absolutely to the recipient. The consequence of a hibah ruqba is then that you and the recipient will have shared ownership over the gift until one of you predeceases the other.
If the donee predeceases you, then the subject of the hibah will return to you.
The objective of a hibah is to prevent disputes as to whether you and your recipient intended, at the time of making the hibah, that the title to the property should pass from you to the recipient.
The handing over of the gift by you, and your recipient’s acceptance of it, should be good evidence that the property had been given by you and had been accepted by your recipient as a gift.
This article will discuss:
Applicability of Hibah in Singapore
In Singapore, Muslims can execute a deed of gift, i.e. a hibah.
It must, however, be borne in mind that the Muslim law on hibah is fairly old and was not created in contemplation of the contemporary circumstances in Singapore. Therefore, the Islamic Religious Council of Singapore has issued fatwas to recognise new forms of hibah in Singapore, such as:
- Central Provident Fund (CPF) Nomination
- A trust managed by Special Needs Trust Company (SNTC), which was formed by the Ministry of Social and Family Development (MSF) and the National Council of Social Service (NCSS)
- Revocable Insurance Nomination
Difference Between Hibah, Faraid, and Wasiat
A Muslim person is allowed to direct through his or her will that his or her estate and effects are to be distributed according to the Muslim law.
In making such directions according to Muslim law, you can create a Muslim will for the disposal of your property. A Muslim will is called “wasiat” in the Malay language or “wasiya” in the Arabic language.
The term “faraid”, on the other hand, refers to Muslim inheritance law.
As a result, these concepts are different from a hibah, which is an Islamic instrument of gift where the owner vows to give the property to the recipient upon the owner’s death.
Moreover, there is a broad distinction between a hibah and a wasiat in that in the case of a hibah, the right of property is conferred immediately. However, the conferring of the right of property in a wasiat is postponed. This means that your recipient will have a right of property only after your death.
Another difference between a hibah and a wasiat is that a testator (the person who has made a will) is not entitled to dispose of more than one-third of the property belonging to him at the time of death under a wasiat. The remainder of the testator’s property must descend in fixed proportions to the legal heirs unless all legal heirs give their consent to deviate from the rule.
Hibah does not form part of your assets to be distributed under faraid
Under a hibah ruqba, you may give a part of your property to someone as a present or gift while you are still alive. The property then passes to the recipient upon your death.
Since the property had already been gifted by hibah before you passed away, it does not need to comply with faraid.
What Assets Can You Give/Not Give by Hibah?
Muslim law does not distinguish between real property, such as houses, and personal property, and personal belongings like jewellery. Accordingly, Muslim law allows for any type of assets to be given by way of a hibah.
However, in Singapore, the question of whether a property has been properly disposed of must be answered with reference to general law such as legislation and the common law. As a result, there may be restrictions when disposing of a property through a hibah in Singapore.
In particular, the determination of rights and interests in land in Singapore is governed by legislation, unless the legislation specifically provides that it does not apply to Muslims. For example, a HDB flat cannot be disposed of through a hibah without the prior written consent of the HDB.
How Can You Give Away Assets by Hibah?
The objective of Muslim law regarding gifts is to prevent disputes as to whether the donor and the donee intended, at the time of making the hibah, that the title to the property should pass from the donor to the donee.
The handing over by the donor, and the acceptance by the donee of the property, should be good evidence that the property had been given by the donor and had been accepted by the donee as a gift.
To make a valid hibah ruqba, three conditions must be fulfilled:
- A manifestation of your wish to give. This should be manifested in writing, such as a deed of gift, similar to how a will is executed by a Muslim in compliance with the formalities prescribed by section 6 of the Wills Act;
- The acceptance by the intended recipient, either impliedly or expressly; and
- The taking of possession of the gift by the recipient, either actually or constructively. Constructively taking possession does not involve having physical possession but the recipient could have the title over the gift, or even receive rents or profits from the gift.
Revoking a Hibah
You have the right to revoke or change your hibah provided that there has not been delivery and physical acceptance of the gift.
For example, a revocable insurance nomination, which is similar to a CPF nomination, involves a situation where the delivery and physical acceptance of the gift takes place only after the death of the policyholder. Therefore, you can revoke or change your hibah in the context of a revocable insurance nomination while you are still alive.
If you had executed a deed of gift to create a hibah, then the revocation or cancellation of that deed of gift must be clearly expressed in writing. You will then need to execute a new deed of gift if you intend to create a new hibah.
There are no penalties for revoking a hibah.
Readers should think carefully about what assets they want to give by way of a hibah, who they intend to make the hibah to, and clearly express these in writing when making a hibah. This would help prevent any disputes over the validity of the hibah and uncertainty over the subject of the hibah and/or the identity of the recipient of the intended hibah.
We recommend that you consult a Muslim inheritance lawyer if you are considering making a hibah or need legal advice on an existing hibah. The lawyer will be able to help you with making a valid hibah, or with understanding if the hibah had been validly made.
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