Shari’ah Compliant

Wills & Trusts

Presentation by Todd Gallinger

Gallinger Law

Phone: (949) 862-0010 Fax: (949) 861-6582

Email: tgallinger@gallingerlaw.com
 Overview
 California Wills & Trust Law
– Effect of Will
– Revocable Trusts – Probate Avoidance
 Federal Estate Tax
– Irrevocable Trusts
 Shari’ah Compliant
– Islamic Distribution
– Limits on Power of Trustee
– Burial/Other Instructions
What is a Will?

 A legal document that specifies how your

estate is distributed as well as your desired
burial rituals.
 Everyone should have one!
 The Prophet Muhammad (pbuh) is reported in
Bukhari as saying, "is not permissible for any Muslim
who has something to will to stay for two nights
without having his last will and testament written and
kept ready with him .”
If You Don’t Have a Will…
 Your property is distributed “intestate,”
according to the laws of the state you live in.

 Your closest relative decides on how you

are buried, problematic if you have non-
Muslim family members.

 A Court decides who takes care of your

minor children.
What Belongs in a Will
 How to distribute your property.

 Who will supervise your estate.

 How you will be buried.

 Who will take care of your children.

How to Execute a Will
 In California, 2 ways:

 “Holographic will”
– Written entirely by hand
– Signed and dated

 Standard will
– Witnessed by two people who will not inherit from you
– Signed and dated
What is Probate?

 Probate is the process by which a

Court supervises your estate.
 Takes a long time (6 months +).
 Expensive (4% of estate or higher).
 Public, because it is in open Court.
 Required in CA if estate is worth more
than $100K or real estate more than
$30K is owned.
Probate-Avoidance Trust

 Also called a Revocable Living Trust

 Revocable means you can cancel or modify it

at any time, you keep control

 Low administration & set-up fees

 Strongly recommended if you own real estate

or property > $100K
Trusts: Two Types

 Revocable or “Living” Trust

– For avoiding probate
– You keep control

 Irrevocable Trust
– For avoiding taxes
– Must give up control
Funding The Trust

 Necessary for both Revocable &

Irrevocable Trusts

 Easy for Personal Property, write

yourself a receipt gifting to the Trust

 For Real Property, need to execute

deed & file with the County
The Estate Tax

 Also called the Death Tax

 Up to 50% of the value of your estate

over the “threshold limit”

 Threshold currently changing year to

year.
The Changing Estate Tax
Avoidingthe
Avoiding theTax
Tax
 Need an Irrevocable Trust, Irrevocable means
it is permanent, cannot be changed or
cancelled.

 Must be a split interest, meaning you cannot

keep benefit and day to day control.

 Expensive to set-up and administer, but

cheaper than the tax!
Types of Irrevocable Trusts

 Irrevocable Life Insurance Trust (ILIT)

 Charitable Remainder Trust (CRT)

 Charitable Lead Trust (CLT)

 Many others, consult an estate planning

attorney for more information
IslamicDistribution,
Islamic Distribution,Pt.Pt.
1 1

 Extremely complex.

 Can be used with a Will or any type of

Trust.

 Consult with your Imam or a trusted

scholar.
Islamic Distribution, Pt. 2

 Up to 1/3 of your estate can be gifted to

charity. Any amount can be gifted during life,
including using an irrevocable trust.
 Rest goes to relatives in two classes:
– Those with set shares (spouse, parents, siblings).
– Those who get the remainder (children, with males
taking twice the shares of females).
Other Estate Planning Tools
 Living Will or Advanced Healthcare Directive

 Powers of Attorney

 Life Estate

 Homestead Declaration

 Insurance

 401(k) gifts

 Many more!
Presentation by:

Todd Gallinger
Gallinger Law
20 Truman, Suite 109
Irvine, CA 92620
Phone: (949) 862-0010 Fax: (949) 861-6582
Email: tgallinger@gallingerlaw.com