Saturday, April 13, 2024
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Inheritance and debt

Fatwaa ID: 1293

Question:
A Muslim brother suffering from cancer passed away about two months ago.

1) In 2021, the IRS asked $20K upon his tax return in which he showed $120K as his income. In his tax return, he presented an increased amount ($120K) there than his actual real earning amount that he made in order to buy a house during that period. The IRS kept asking him to pay that $20K since 2021 but he did not and now he passed away two months ago. Is he still responsible to pay that even after his death now according to the Shariah?

2) He brought furniture from a place worth $4,500 in a binding agreement and there is still $3K remaining of that payment after his death. This should clearly count as a debt which needs to be paid off, right? So, his family pays off this debt on his behalf from the $13,400 he left behind or is it automatically voided due to him passing away and he was the sole individual signed the agreement w/ the furniture company? What if the furniture company from their side nullify the contract/agreement since he is deceased?

3) He left $13,400 behind and he has no wife and/or any children. He passed the deed of the house to his mother’s name around two months ago. How all his inheritences will be divided amongst his family members. including the house?

  1. The car that he had on lease has been returned. Phone has also been taken care of. The bills for the utilities of the house in the past two months are currently owed ($1K) but as I stated in #3, around that same time the house was transferred to under his mother’s name. So technically, the mother is the owner of the house since the last two months or so. And if that is even correct as his mother being made the owner of the house by him since he was suffering from cancer as an incurable disease which lead to hos eventual demise. How will this then be resolved?

Jazak Allahu khairan.

Answer:
In the Name of Allaah, the Most Gracious, the Most Merciful.
As-salaamu ‘alaykum wa-rahmatullaahi wa-barakaatuh.

May Allaah Ta’aala elevate the status of the brother in reference in Jannah. May He grant sabr jameel to his family.

  1. At the outset, the amount owed to the IRS does not qualify as a legitimate debt for which he will be accountable in the Hereafter. It is a claim instead. If a person is able to have it waived, then he should do that. From the angle of Shari’ah, this does not have to be paid from his estate. However, to the best of my knowledge, the IRS attaches a lien to the estate and comes after it for the owed money. It is not automatically forgiven upon death. We advise the executor of the estate to bear that in mind and seek legal advice if necessary.

It should be noted that it is impermissible to lie to increase or decrease the amount when filing taxes. Legal strategims however may be adopted as necessary.

  1. The amount owed for the furniture is a genuine debt and will have to be paid from the estate. The creditors will be paid off first before the heirs get their shares. If there is nothing remaining after paying off the creditors, then the heirs will not get anything. Death does not void the owed debts.

If the creditor pardons the debt, then the debt will be waived. It will not have to be paid. However, this may not be demanded from creditor. It is his right to get his money.

  1. Simply transferring the deed to someone’s name does not effect tamleek, transfer of ownership. The laws pertaining to gifting will be applicable. It is necessary for the giftee to constructively accept the gift during the lifetime of the gifter. Likewise, constructive possession must be found. In the absence of these conditions, the house will remain the property of the deceased and will form part of the estate upon his demise. This will be the case even if legal documents show otherwise.

Kindly advise who he is survived by, i.e., family members and relatives that were alive at the time of his demise. Also, did he make a bequest? We will advise regarding the distribution accordingly.

  1. Based on the details mentioned in #3, if a valid transfer was not found, then the expenses related to the house will be taken from his estate until the house, at part of the estate, is distributed.

If a valid transfer was found, based on the conditions mentioned above, then kindly advise what his situation was at the time of gifting the house to his mother. If a valid transfer was not found, then this information is irrelevant.

And Allaah Ta’aala knows best.
Mufti Muajul I. Chowdhury
Darul Iftaa New York
https://askthemufti.us/

وصل اللهم وسلم وبارك على سيدنا محمد وعلى ءاله وصحبه أجمعين

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