Faraid, derived from the Arabic word faridah meaning “fixed portion”, refers to the divinely prescribed system of inheritance distribution in Islam. Its principles are explicitly set out in the Qur’an, particularly in Surah An-Nisa, verses 11, 12, and 176. Among them:
“Allah commands you concerning your children: for the male, what is equal to the share of two females…” (Surah An-Nisa, 4:11)
Faraid is considered qat’i (definitive) matter in both text and application, making it a mandatory component of Islamic law that cannot be altered or overridden by human reasoning or preference. [refer: Takharuj as an Effective Solution to the Inheritance Problems of Muslims by Md. Yazid Ahmad., et. al., 2018].
In Malaysia, Faraid is legally recognised and enforced through federal and state legislation. Key statutes include:
- Administration of Islamic Law (Federal Territories) Act 1993 [Act 505], particularly Section 61(3)(b)(v) which empowers the Syariah Court to determine the rightful heirs and their shares.
- Islamic Family Law (Federal Territories) Act 1984 [Act 303], especially Sections 58–66 which address property, matrimonial assets, and estate claims.
- State enactments such as Administration of Islamic Laws (State of Selangor) Enactment 2003, Section 61(3)(b)(v) and Islamic Family Laws (State of Selangor) Enactment 2003, Part VI (Harta Pusaka).
The Syariah Court issues a Perintah Faraid (Faraid Order)—a formal judicial order that lists the beneficiaries (waris) and their respective Faraid portions. This order is considered final and conclusive for verifying the eligible heirs and their entitlements under Islamic law. It is often used as the authoritative reference in subsequent estate administration processes involving banks, land offices, Amanah Raya, and trust corporations.
[refer: High Court case, Khairuddin Bin Abd Rahman Dan 4 Yang Lain v Malayan Banking Berhad [2014] MLJU 1898:
“Sijil faraid yang dikeluarkan adalah hanya menentukan bahagian-bahagian atau hak-hak yang diterima oleh setiap pewaris dan tidak lebih daripada itu”]
In the context of contemporary estate planning, especially for Ultra-High-Net-Worth Individuals (UHNWI), Faraid is not just a religious obligation, but a critical strategic component. Many Muslim families with complex asset portfolios seek structures that ensure both compliance with Syariah and efficiency in execution. The objective is to preserve harmony, reduce litigation risk, and honour faith-based principles while navigating legal and financial complexity.
Faraid governs the distribution of residuary wealth—i.e., the balance of the estate that remains after specific obligations have been discharged. It identifies and quantifies the entitlements of heirs, including ashab al-furud (Qur’anic heirs), asabah (residuary heirs), and zawil arham (distant kin, where applicable). This ensures a fair, proportional, and religiously valid outcome.
The residuary wealth subject to Faraid distribution arises only after the following five categories of entitlements are settled, each recognised under Syariah and Malaysian law:
(A) Harta Sepencarian (Jointly Acquired Property)
The entitlement of a spouse to property acquired during marriage through joint effort, whether monetary or non-monetary. Governed under Section 122, Islamic Family Law (Federal Territories) Act 1984 [Act 303], this must be claimed and resolved before estate distribution.
[refer: Court of Appeal case, Wan Khairani binti Wan Mahmood v Ismail bin Mohamad & Anor [2008] 1 MLJ 164:
“The term ‘harta sepencarian’ is not defined in the Act 1993 but is be found instead in the Islamic Family Law (Federal Territories) Act 1984 (‘the Act 1984’). In this Act s 2 specifies, inter alia, that ‘harta sepencarian’ means property jointly acquired by husband and wife during the subsistence of marriage in accordance with the conditions stipulated by Hukum Syariah. It is therefore expressly provided that harta sepencarian is a subject matter within the jurisdiction of the Syariah High Court.”]
(B) Wasiyyah (Bequest)
A written will allowing up to one-third of the estate to be given to non-heirs, provided all debts are paid. Governed under Section 60(3), Act 505, and guided by:
“It is prescribed for you, when death approaches any of you, if he leaves wealth, that he makes a bequest for parents and near relatives according to what is acceptable—a duty upon the righteous.” (Surah Al-Baqarah, 2:180)
(C) Hibah (Deed of Gift)
A lifetime gift that may remain pending delivery or documentation. Recognised under Section 61(3)(b)(x), Act 505, the Syariah Court has jurisdiction to validate hibah claims where intention and evidence are proven.
[refer: Syariah High Court case, Re Abdul Rahman bin Hj Ahmad & Ors [2013] 1 SHLR 51:
“Memberi milik sesuatu barang kepada seseorang yang mana barang itu sah untuk dijual atau diberi hutang oleh ahli tabarru’ dengan tidak adanya sebarang tukaran atau pembalasan.]
(D) Waqf (Charitable Endowment)
A permanent dedication of property for charitable or religious purposes, often intended to take effect upon death. Governed under Section 58, Act 505, the asset is no longer part of the personal estate and must be segregated accordingly.
[refer: Court of Appeal Case, Majlis Agama Islam Selangor v Bong Boon Chuen & Ors [2008] 6 MLJ 488:
“wakaf means any property from which its benefit or interest may be enjoyed for any charitable purpose whether as wakaf am or wakaf khasin accordance with hukum Syarak, but does not include a trust which is defined under the Trustee Act 1949 [Act 208]; wakaf am means a wakaf that is created for a general charitable purpose in accordance with hukum Syarak; and wakaf khas means a wakafthat is created for a specified charitable purpose in accordance with hukum Syarak”]
(E) Amanah (Trust)
Property held by the deceased for another party, either formally or informally. Not considered part of the estate. Recognised under Section 61(3)(b)(xii), Act 505 for Syariah cases and Trusts Act 1949 [Act 208] for civil trust structures.
[refer: High Court case, Tan Hwa Ling @ Tan Siew Leng & Ors v Tan Keng Yong @ Tang Keng Hong & Anor [2020] 10 MLJ 651:
“It is pertinent to note that the definition of ‘trust’ is not confined to an ‘express’ one. Reference is made to s 3 of the Trustee Act 1949, where ‘trust’ is defined as follows:
Section 3 — Interpretation
‘trust’ does not include the duties of chargee, but with this exception the expressions ‘trust’ and ‘trustee’ extend to implied and constructive trusts, and to cases where the trustee has a beneficial interest in the trust property, and to the duties incidental to the office of a personal representative and ‘trustee’, where the context admits, includes a personal representative, and ‘new trustee’ includes an additional trustee;”]
(F) Debt owing by the deceased either by secured creditors or unsecured creditors.
Even where these categories are undocumented, their legal effect remains. Claims may still be made by the rightful party and subject to judicial scrutiny. Proper documentation through instruments such as hibah deeds, waqf declarations, or trust agreements ensures enforceability and prevents family disputes. Upon clearance and complete distribution of the above-mentioned categories of entitlement, the residuary wealth (if any) is proper to be distributed to heirs.
Among Muslim UHNWIs, it is common to privatise wealth, estate, and legacy planning (WELP). This involves outsourcing the structuring and administration of wealth to professionals or institutional entities to ensure long-term governance, Shariah compliance, and smooth distribution posthumously.
Common estate and wealth structuring instruments include:
- Trust Corporations – Licensed professional bodies appointed to manage and distribute assets after death in accordance with Faraid.
- Private Trusts – Family-appointed trustees, whether individuals or private entities, manage assets and distribute according to Faraid or other Syariah-compliant directives.
- Waqf Zurri (Family Waqf) – Property endowed to the Majlis Agama Islam Negeri (MAIN) with instructions that benefits flow to descendants either by Faraid or other formulas. Managed entirely by MAIN as trustee.
- Single or Multi-Family Offices – Dedicated corporate vehicles (Sdn Bhd, foundations, Labuan entities) that manage, invest, and oversee family wealth. In September 2024, Malaysia introduced a regulated Single Family Office framework, now supported by professional guidelines for operation and compliance.
Faraid remains the “qiblah” or “true north” for Muslim estate planning. Its divine mandate ensures clarity, justice, and barakah (blessing) in the transfer of wealth. Lawyers involved in Islamic estate matters must possess multi-disciplinary knowledge—Syariah, trust law, corporate governance, family law, and estate administration—to design effective and compliant legacy structures.
As Malaysia positions itself as a global centre for Islamic wealth management, the integration of Faraid within legal instruments such as trusts, waqf, and family offices signifies a future-ready approach. It blends tradition with structure, faith with governance, and law with legacy.
For further information, please contact:
Mohamad Redzuan Idrus, Partner, Azmi & Associates
redzuan@azmilaw.com
