gl islamic wills & trusts-1

8/8/2019 GL Islamic WIlls & Trusts-1

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Shariah CompliantWills & Trusts

Presentation by Todd Gallinger

Gallinger Law

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

Email: [email protected]


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Overview

California Wills & Trust Law

Effect of Will

Revocable Trusts Probate Avoidance

Federal Estate Tax

Irrevocable Trusts

Shariah Compliant

Islamic Distribution

Limits on Power of Trustee Burial/Other Instructions


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What is a Will?

A legal document that specifies how yourestate is distributed as well as your desiredburial rituals.

Everyone should have one!

The Prophet Muhammad (pbuh) is reported inBukhari as saying, "is not permissible for any Muslimwho has something to will to stay for two nightswithout having his last will and testament written andkept ready with him .


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If You Dont Have a Will

Your property is distributed intestate,according to the laws of the state you live in.

Your closest relative decides on how youare buried, problematic if you have non-Muslim family members.

A Court decides who takes care of yourminor children.


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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.


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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


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What is Probate?

Probate is the process by which aCourt 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 morethan $100K or real estate more than$30K is owned.


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Probate-Avoidance Trust

Also called a Revocable Living Trust

Revocable means you can cancel or modify itat any time, you keep control

Low administration & set-up fees

Strongly recommended if you own real estateor property > $100K


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Trusts: Two Types

Revocable or Living Trust For avoiding probate

You keep control

Irrevocable Trust

For avoiding taxes Must give up control


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Funding The Trust

Necessary for both Revocable &Irrevocable Trusts

Easy for Personal Property, writeyourself a receipt gifting to the Trust

For Real Property, need to executedeed & file with the County


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The Estate Tax

Also called the Death Tax

Up to 50% of the value of your estateover the threshold limit

Threshold currently changing year toyear.


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The Changing Estate Tax


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Avoiding the Tax

Need an Irrevocable Trust, Irrevocablemeans it is permanent, cannot be changed or

cancelled.

Must be a split interest, meaning you cannotkeep benefit and day to day control.

Expensive to set-up and administer, butcheaper than the tax!

Avoiding the Tax


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Irrevocable Life Insurance Trust (ILIT)

Charitable Remainder Trust (CRT)

Charitable Lead Trust (CLT)

Many others, consult an estate planningattorney for more information

Types of Irrevocable Trusts


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Up to 1/3 of your estate can be gifted tocharity. 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).

Islamic Distribution, Pt. 2


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Living Will or Advanced Healthcare Directive

Powers of Attorney

Life Estate

Homestead Declaration

Insurance

401(k) gifts

Many more!

Other Estate Planning Tools


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Presentation by:

Todd Gallinger

Gallinger Law

20 Truman, Suite 109

Irvine, CA 92620

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

Email: [email protected]

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