We often talk about “trusts” in wills, but what are they?
A trust is a legal arrangement where one or more people, “trustees”, are made legally responsible for holding assets. The assets – usually land or money – are placed in trust for the benefit of one or more ‘beneficiaries’.
Why does my will need a trust?
English law doesn’t recognise Sharia (divine) law and so in an English will, you can’t just write, I want my assets to be distributed as per the sharia. So, there are two options:
- Specify in the will who will inherit i.e. husband 1/4, son 1/2, daughter 1/4 – however the problem with this is that if one of the inheritors dies before you, the beneficiary’s gift will lapse (fail) and they will not inherit anything from the deceased’s Estate. Whatever they were due to receive will fall back into the deceased’s Estate to be redistributed. It may be that there are other sharia inheritors and this may cause problems. In such a will therefore there is a redistribution clause so all the assets enter into a trust to be redistributed.
- Put all the assets into a trust in the first place and leave a letter indicating how you want to trust to be distributed i.e. by sharia.
We favour option 2 as it is tidier.
So, who is my trustee?
The trustees are responsible for managing the trust and carrying your wishes. You should choose people to be your trustee and who you choose is very important. Trustees are the legal owners of the assets held in a trust. They must appreciate the importance of their role and be prepared to act in a way which doesn’t contravene the sharia. Their role is to ensure that your legal sharia inheritors receive their inheritance. Due, however, to the country and system in which we live, as Muslim in England, a common problem is that the main asset which is owned is the house and so how is that divided when you die?
The answer to that is found in our blog post – Does my wife need to sell the house?