The importance of sharia estate planning
The shareholder directors share decades of combined experience and this has served as a strong foundation for the structures and facilities required for fiduciary services specialists with a national client base.
Founding director Showkat Alie Mukadam, a chartered accountant who specialises in estate and succession planning as well as tax compliance, has spent much of his distinguished career serving the Muslim community and is pleased to be able to continue to do that with his partners. “Sharia compliance has its own nuances and set of rules. I spent some time with leading Islamic scholars to gain a good understanding of this,” he says.
There are set rules laid down in the Koran as regards how shares must be apportioned. “The challenge has always been reconciling them within the context of a country that imposes death taxes (estate duty, capital gains tax). We needed the ability to offer practical solutions to those challenges. It was a good learning curve,” he says.
While most of the cases in the community are fairly common, it’s understanding the extraordinary ones that differentiate the service offered by Legacy FS. “People in business want to know how their shares will be dealt with on their death, and how one child who has no interest in the business can be taken care of while remaining compliant with the requirements of how the inheritance must work.”
Mukadam says that the learnings over the past decade have been phenomenal, because they are continuously challenged by the business houses on how Sharia compliance must be handled. Within the Islamic concept, inheritance is always shared by everybody. It’s compulsory. The challenge occurs when some children are involved and interested in the succession of the business, and some are not because they might be professionals in their own right. “You’ve got to jump through a few hoops to make sure each one is happy with the ratios. The child who doesn’t want to get involved in the business could get a quid quo pro in another asset perhaps,” says Mukadam.
As a practice, Legacy FS has developed the expertise in Sharia compliance for estate planning and the company is called on by people across South Africa to assist with this. “A lot of people might have the theory, but with the attorneys in the practice we’re in a good position to advise on what is Sharia compliant.”
“The greatest of richness is the richness of the soul.”
– Prophet Muhammad (S.A.W) Bukhari