Kuala lumpur: Hibah, which in Islamic law refers to assets voluntarily given or transferred to a beneficiary by a person during their lifetime, is generally viewed as final and not open to dispute. However, a recent decision by the High Court came as a shock to many when it annulled a takaful (Islamic insurance) hibah worth RM1 million that had been given to the policyholder's widow.

According to Bernama News Agency, the case involved a takaful policyholder who named his wife as the hibah recipient. After his death, his family filed a claim in the Syariah Court to challenge the takaful hibah, but the court upheld the widow's right to the funds. The family then brought the case before the civil court, which ruled in favor of the family and ordered that the funds be redistributed according to faraid or Islamic inheritance law.

The case sparked a heated debate on social media because the general perception is that hibah cannot be challenged by other heirs. Many netizens, who had placed full trust in the 'immunity' of hibah from legal disputes, questioned the validity of takaful hibah. Some even accused their takaful agents of being 'scammers' because there is no guarantee that the hibah cannot be challenged in court.

Lawyer Dr. Mahmud Abdul Jumaat explained that hibah is a voluntary transfer of property from a giver to a recipient during the giver's lifetime, usually done to avoid inheritance disputes later on. Hibah refers to the immediate transfer of asset ownership, made without expecting anything in return and based on love or affection. However, in reality, hibah can be challenged in court by heirs if there are weaknesses or non-compliance with legal or religious requirements.

According to Mahmud, if a hibah is made while the giver is suffering from a terminal illness, it will be treated as part of the giver's estate and will be subject to the appropriate conditions. He clarified that under Malaysia's legal framework, hibah falls under the jurisdiction of both the Syariah and civil courts, which can lead to conflicts if there's overlap or confusion between these two jurisdictions.

The recent court case, involving a legal technicality with Schedule 10 of the Islamic Financial Services Act (IFSA) 2013 regarding hibah nominations, highlighted the importance of understanding the legal processes involved in hibah. Mahmud emphasized that hibah remains a relevant instrument for asset distribution as long as the procedures are carried out properly.

Aside from hibah, there are several alternative methods to transfer wealth or assets to loved ones that carry a lower risk of being challenged. These include direct transfers during one's lifetime through standard ownership transfers or gifts, without relying on formal hibah documents. For example, married couples may consider joint ownership arrangements or using a trust as an asset distribution tool.

Muslims can also consider making a will, which is permissible within certain limits. However, a will can be challenged if it exceeds the legal limit or includes faraid heirs without the consent of all other heirs.

To ensure a hibah is strong and less likely to be challenged, Mahmud advised that both the giver and recipient should ensure its documentation is clear and complete. He recommended seeking professional advice from a syariah lawyer, religious institution officer, or estate planning consultant before and during the process.

Al-Isra' Group associate manager Reefa Shahidah Mohd Razali stated that the issue of takaful hibah being disputed in court would not arise if its implementation follows the existing legal framework under IFSA 2013. She explained that the hibah used in the current takaful industry is a conditional hibah, a direct gift made by the policyholder to the nominated recipient in the takaful certificate.

Reefa emphasized that there is no basis for accusing takaful agents of misleading clients because the implementation of this hibah is based on valid legal provisions under IFSA 2013, specifically Schedule 10, which outlines the hibah instrument. She encouraged clients to fully understand the concept of conditional hibah before signing any policy.