Declaration of Hibah
Concept
As-Salihin’ product known as a Declaration of Hibah or Pri-Hibah is a
declaration made by the legal owner
(“Donor”) of a specific property or asset stating that he gives the property or asset to the
named beneficiary gratuitously (without
any consideration). In the meantime, he is holding the property or asset as
trustee for the beneficiary during his
lifetime. It is a formal written
document wherein the terms and conditions on which the Donor is holding the
property or asset are set out.
Features
After the Declaration of Hibah has been executed, the property or asset is no
longer the Donor’s property because the declaration takes effect
immediately subject to terms and conditions stipulated in the Declaration
of Hibah. Consequently if the Donor later dies, the property or asset is
not subject to Faraid distribution rules, as it is no longer part of his (the
deceased’s) estate.
In legal terms, the Declaration of Hibah is a combination
Hibah (gift) and Amanah (trust) which gives room and flexibility to the Donor
to control and manage the said property or asset during his lifetime, whilst
the transfer of the said property or asset will be made upon the triggering
event as stated in the Declaration of
Hibah. Therefore, expenses such as administration fee, stamp duty fee and legal
fee on transfer of immovable and movable assets (where applicable)
will only be chargeable later when the triggering event occurs when
as-Salihin Trustee Berhad is acting as trustee.
A separate legal instrument, a Power of Attorney is used to transfer the said property or asset upon the
occurrence of the triggering event. At
the time when the Donor executes the Declaration
of Hibah, he also appoints as-Salihin Trustee Berhad as his Attorney with
power to take certain actions when the triggering event occurs . The Power of Attorney expedites the process
of transfer of the said property or asset
without delay, and consequently the said property or asset is not frozen.
The Declaration of Hibah is valid and effective upon execution, and there is no legal requirement to obtain an
order or endorsement from Syariah Court
before the asset is transferred
to the named beneficiary. Any procedure involving the Syariah Court will cause delay and further expenses
and therefore should be avoided, unless the Declaration of Hibah is disputed by any party.
A Declaration of Hibah is usually made in respect of the donor’s
properties or assets which are free from encumbrances. A declaration in respect
of encumbered properties or assets is permitted only if the party holding the
encumbrance (bank or financial institution concerned) gives its written
consent.
As-Salihin’s
services / range of products
As-Salihin Trustee provides a full range
of estate planning services and products to the community, besides the Declaration
of Hibah. An individual (client) who
intends to execute a Declaration of
Hibah may also wish to make a Wasiat
(will) and appoint as-Salihin Trustee
Berhad as his Executor. Upon the client’s death, as-Salihin Trustee Berhad (as
Executor of the deceased’s will) can then administer the entire assets of the deceased, as well
as take charge of all his liabilities
and ensure all debts are settled.
Properties or assets identified under
the Declaration of Hibah cannot be
used for settling the debts of the deceased. It is therefore advisable for the
Donor to declare only specific properties or assets as Hibah, so that the rest of his
properties or assets remain part of his estate upon his death, and can be used
for settling his debts, and the balance (if
any) to be distributed to his heirs.
Prepared by Amna Fazillah Binti
Ismail
Executive Vice President
as-Salihin Trustee Berhad
8 February 2017.
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