Hibah in Islam: Meaning, Importance, and How to Execute It Properly

Hibah is one of the most essential tools in Islamic wealth management. It refers to a voluntary transfer of property or assets from one person to another during their lifetime without any form of compensation. In Islam, hibah is highly encouraged as it prevents family disputes and serves as a blessed act of generosity.

What is Hibah?

In Islamic terms, hibah means a gift or donation of property from one person (the giver) to another (the recipient), done freely and unconditionally during the giver’s lifetime.
Hibah can include:

• Movable assets such as cash, gold, jewelry, and vehicles.
• Immovable assets like land, houses, and buildings.

Unlike Faraid (Islamic inheritance law), which only takes effect after death, hibah is carried out while the giver is still alive. This makes hibah a proactive tool for estate planning that allows individuals to decide how their wealth is distributed before they pass away.

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The Ruling of Hibah in Islam

Hibah is permissible (harus) and strongly encouraged in Islam. Allah SWT says in Surah Al-Baqarah, verse 177:

“You will never achieve righteousness until you donate some of what you love.”

Hibah reflects sincerity and a pure intention to help others without expecting anything in return.

Importance of Hibah

1. Avoiding Family Disputes

Hibah helps prevent potential conflicts and disputes among heirs over inheritance after the death of the property owner.

2. Protecting Vulnerable Family Members

It allows individuals to secure the financial future of dependents, such as a spouse, children, or elderly parents.

3. Better Wealth Planning

Hibah enables property owners to strategically distribute assets according to the recipients’ needs.

4. Immediate Asset Distribution

Unlike inheritance, hibah can be executed immediately, bypassing the lengthy court or probate processes.

Conditions for a Valid Hibah

To ensure that hibah is valid under Islamic law (syarak), certain conditions must be fulfilled:

1. The Giver (Donor)

• Must be mature (baligh), sane (berakal), and have full ownership of the asset intended for hibah.

2. The Recipient (Donee)

• Can be anyone, including non-Muslims or organizations.

3. The Gifted Asset

• Must be halal, clearly identified, and fully owned by the giver.

4. Offer and Acceptance (Ijab and Qabul)

• There must be clear agreement between the giver and recipient.
• Written documentation is highly recommended to prevent future disputes.

Step-by-Step Hibah Procedure in Malaysia

1. Identify the Asset to be Gifted

• Ensure the asset is free from debts or third-party claims.

2. Seek Advice from Authorized Institutions

• Consult with Syariah lawyers, Amanah Raya, or Islamic financial institutions for proper guidance.

3. Prepare Hibah Documents

• Formal documentation should be signed by both parties and witnessed or verified by authorities, such as the Syariah Court.

4. Register the Asset (if applicable)

• For immovable assets like land and property, registration at the Land Office is mandatory to legally transfer ownership.

Advantages of Hibah Over a Will (Wasiat)

• Hibah is not limited to one-third (1/3) of the estate, unlike a wasiat.
• Once executed, hibah cannot be reclaimed, except under specific conditions (e.g., hibah to adopted children in some cases).

Conclusion

Hibah is a powerful, recommended method in Islam to distribute wealth peacefully and without conflict. It protects the rights of vulnerable family members and provides peace of mind to the giver, knowing their wealth is distributed according to their wishes.

As Muslims, planning wealth distribution through hibah is a wise step to ensure harmony, blessings, and proper asset management within the family.

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