On Lifetime Donations by Parents to Children: Summary of Shariah Law Perspectives

    1.    Is it mandatory to make lifetime donations to one’s children in equal shares under all circumstances, in the context of the well known, Prophetic statement, “ Fear Allah, and do justice ( by exercising equality) between your children.” ? فاتقوا الله واعدلوا بين اولادكم ) بخارى
    

2.    The answer is that viewed in proper context, the majority of the jurists are of the opinion that equality in making donations to children is recommended, but not obligatory, subject to the conditions below. ذهب الجمهور الى ان التسوية بين الاولاد في العطايا مستحبة : اعلاء السنن
  

 3.    If the particular donation in question is made by the parent to only one child for a valid reason, such as genuine need, ( and the donation is not intended to prejudice the remaining children), such a donation is valid. A valid reason ( for preference) should be evaluated in the circumstances of each individual case, in the light of all relevant objective factors. التفضيل حرام و هي ان تكون الهبة بقصد التفضيل من غير داعية مجوزة لذللك او بقصد الاضرار الاخرين :  تكملة فتح الملهم : ملخصا
  

 4.    On the other hand, a donation may be made by a parent in favor of one child, to the exclusion of other children, without valid reason, as a naked preference,  and thereby constituting an arbitrary transfer of property ( to the obvious detriment of the remaining children). Such a donation is clearly impermissible. و جملة ذالك انه يجب على الانسان التسوية بين اولاده في العطية اذا لم يختص احدهم بمعنى يبيح التفضيل : المغني لابن قدامة : ٤٤٥٩
    

5.    The famous case of of the companion Bashir Ibn Nauman (ra) is a case in point: he donated his slave  to his one son, ( Nauman) , to the exclusion of his several remaining children. He sought the approval of the Holy Prophet صلى الله عليه و سلم to the donation. The Prophet ( saw )replied: “ Have you given each of your children the same as this? He  replied,” No” ; the Prophet(saw)  responded: “ Then, revoke the donation ( by taking the slave back.”): see :Al - Muwatta:1473 ( Bashir (ra) revoked the donation). اكل ولدك نحلته مثل هذا ؟ فقال : لا : فقال رسول الله : فارتجعه
  

 6.    The  Prophet صلى الله عليه و سلم refused to sanction and witness this donation ( of Bashir) because the preference(in this case)  in favor of one child was purely arbitrary, effected without any valid reason and accordingly prejudicial to the remaining children; hence , according to one narration , the Prophet (saw )refused to be a witness to an “ injustice “; لا تشهدنى على جور ; in another narration, the Prophet ( saw) responded to the effect that , “ take as a witness  to this donation, another person ( and not me). “  If the donation in question was absolutely prohibited,  ( and not simply reprehensible) , the Prophet ( saw)  would not have advised Bashir to take another person as a  witness thereto. فاشهد على هذا غيري
    

7.    In a nutshell, in the absence of a valid reason and legitimate purpose,  the jurists are unanimous that lifetime donations by parents to children must be equal ; ( “ Be equal amongst your children in respect of gifts; If I were to make a preference in the matter of gifts, I would have preferred women over men” :Hadith ).  سووا بين اولادكم في العطية و لو كنت موءثرا لاثرت النساء على الرجال
  

8.    The overwhelming majority of jurists state that the lifetime donation  must be effected in equal shares as between male and female. The rules of inheritance only apply after death.

9.    To the extent that a parent wishes to accelerate the division of his or her estate, to avoid a future dispute after death, by donating in his or her lifetime, according to the shares of inheritance: that is, a  male child takes double that of the female, such is permissible . و المقصود الاستعجال لما يكون بعد الموت و حينئذ ينبغي ان يكون على حسب الميراث: المغني : ملخصًا مع تكملة فتح الملهم

And Allah Knows Best
M S Omar
17 October 2021

On the Fundamental Differences Between Sukuk and Bonds

1.    A Sukuk certificate represents a pro-rata undivided share حصصا شائعة in the beneficial ownership of the underlying tangible assets, comprising the portfolio. As such, the investor shares in the profits and losses generated by the underlying assets. الغنم بالغرم A sale of the Sukuk certificate, in the secondary market, is in substance a sale of proportionate ownership in the underlying assets of the portfolio at their prevailing market value.

2.    On the other hand, a bond or a debenture is a debt instrument, in terms of which the investor loans money to the borrower, and receives periodic payments of interest in return, with the principal being repaid on maturity, irrespective of the performance of the underlying assets of the portfolio. A sale of the bond, at a premium or discount, to a third party, is in substance a sale of the debt, arising from the loan, and is accordingly prohibited.بيع الدين لغير من هو عليه لا يجوز

3.    A Sukuk must be redeemed at market value or at a mutually agreed value, determined at the date of redemption. An undertaking by the manager, in its capacity as a mudarib or partner or agent, to redeem or buy- back the Sukuk at the original face value, upon maturity, is prohibited under all circumstances. لا يجوز إطفاء الصكوك بقيمتها الاسمية بل يكون الاطفاء بقيمتها السوقية او بالقيمة التي يتفق عليها عند الاطفاء

4.    If all the underlying assets of the portfolio are converted to debt, then the rules relating to debt apply: the debts cannot be sold to a third party, except transferred by way of a cession,  at face value, with no premium or discount. الا بالمثل على سبيل الحوالة

5.    The manager or issuer of the Sukuk is a trustee امين, and accordingly cannot guarantee the capital of the Sukuk, except in the case of its liability arising from negligence or misconduct.التعدى او التقصير

And Allah Knows Best
M S Omar
9 October 2021