In this interview with CHIKA IZUORA, managing director, FBNQuest Trustees, Kunle Awojobi speaks about the benefits of Islamic Estate Planning and the need to put in place appropriate policies for its sustainability
What are the differentiating factor between Islamic Estate Planning and other types of Estate Planning in Nigeria?
Islam has provided guidance how individuals should distribute their Estates – at least up to one-third (⅓). The distribution is quite unique as everyone knows from the beginning what he or she is likely to get from the deceased. Islamic Estate Planning is thus, considered an act of purifying or cleansing the individual, which involves voluntary and compulsory distributions made after death.
In non-Islamic Estate Planning, tax is major consideration which makes distributors seek ways of reducing the tax impact on the Estate of the deceased. In Islamic Estate Planning however, reducing the impact of Estate tax is not a consideration.
Kindly give us a background to Islamic Estate Planning in Nigeria and why this is important in wealth preservation?
Islamic Estate Planning is a relatively new area in Islamic Finance in Nigeria. By all standards, I can safely say that we are pioneering this concept in Nigeria.
We started discussing Islamic Estate Planning two years ago in response to the increased conversations around Islamic Finance in Nigeria. And this is premised on the understanding that generally, and across the globe, family fights often occur when inheritance matters crop up. Regardless of the laws in place, Islamic or otherwise, people would sometimes find ways to explore the loopholes in the systems or the Law, and find ways to circumvent the express guidelines provided.
For instance, we were recently called upon to mediate in a couple of Estates where the Principal, who was Muslim, had passed on. Ordinarily, the structure as outlined by Sharia Law, should have been enough to guide assets distribution, however, when money is involved the dynamics change for everyone and subjectivity starts to come in; hence why we were invited to mediate. Our responsibility as an institution therefore, remains to help our clients through the entire inheritance planning process, by putting in place a water-tight structure that will help to minimise crises in the long run.
What are the challenges with Islamic Estate Plans and how is FBNQuest Trustees positioned to provide structured solutions to address such challenges?
The major challenge has basically been education. While some Muslims believe that Estate Planning is important and compulsory based on the teachings of Prophet Mohammed (SAW), some others think otherwise despite the specific instructions in the Qur’an regarding this. Our decision to host this clinic is therefore an attempt to bridge the gap.
In 2017, we began actively disseminating valuable information and educating Muslims on Islamic Estate Planning through our flagship programme – the Legacy Series, both on radio and in press. We have also established relationships and partnerships with key players in the Islamic Finance space. We currently have working arrangements with Scholars who are vast in Islamic Jurisprudence and Legal Partners seasoned in Islamic Finance.
Considering how specific Islamic inheritance laws are, how do you ensure that asset distribution are properly managed?
The beauty of Islamic Inheritance Law is the fact that the distribution plan of a Muslim’s assets have already been taken care of. The Qur’an provides specific guidelines for how to distribute two-third of a Muslim’s assets family – parents, spouse(s), children and other family members. Then freedom is given for how the remaining one-third.
With a proper Trust structure, the one-third (⅓) can be managed over generations – depending on your preferences. This one-third can be used to create and manage the activities of foundations, make Zakat distributions and take care of the less privileged in the society by way of Charity Trust.
Beyond Islamic Wills, Executorship and Estate Administration, what other Islamic Estate Planning solutions do FBNQuest Trustees provide?
FBNQuest Trustees helps with both the computation and management of Islamic instruments like Zakat, Wakaf (or Charity), Hibah, etc. What is however, paramount to us is having bespoke structures that best meet the needs of our respective clients for wealth preservation and smooth transfer.
Are there regulatory policies that affect Islamic Estate planning?
I’ll say none. The Islamic Estate Planning business is a relatively new one in this part of the world. You will also agree with me that development of the market is a fallout from the recent prominence of Islamic Finance, catalysed by the successes of the FGN N100bn Sukuk Bonds, to which FBNQuest Trustees was also Delegate.
For Muslims who need to plan their Estates in a Sharia-compliant manner, what are some of the requirements needed to access your solutions?
To have a proper structure, a prospective Client will have to speak with one of our Trust Experts so that their unique situation is understood and a clear understanding of their objectives are outlined. This is a critical first step because each client has a unique need, which cannot be replicated for another individual. Therefore, to get the best solution each person will have these one-on-one sessions with the experts and the output of these would guide drafting of the Estate Plan and subsequent recommendations of the most appropriate structure.
In general, do you think Nigerians are properly educated about Estate Planning? What are some of the opportunities that remain untapped?
We believe in continuous education. We have done this in the last 9 years via different media platforms – digital, traditional and through direct efforts including seminars, presentations, etc., to organisations and companies, clubs and associations (at no cost to them). Other Trust companies have also recently joined the discussion. The more we can push the awareness around proper Estate Planning, the better for the individuals – Muslims and non-Muslims alike.
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