Winding Up An Estate

1) When valuing a property, the ideal method is to consider the market value.  This can easily be done by getting a Real-Estate Agent to evaluate the property. The method used by most estate agents is a Comparative Market Analysis (CMA).

2) When a person passes away, each heir becomes an owner in proportion to his/her Shar’ie share in every item left by the deceased.

Instead of dividing each item, the easiest way would be for each of the heirs to make a mutual agreement with his/her co-heirs and take a certain asset (for example, something like a motor vehicle) as whole or part of his/her share of the estate.  The remaining heirs will then gift or sell their shares in that asset to the one taking it. This will be valid if there is no non-Baaligh child or insane person among the heirs. In the presence of a non-Baaligh child or an insane heir, a senior family-member who is closest in kin to the non-Baaligh child/insane person or alternatively the executor of the estate (if one was appointed) should act on their behalf to arrange such an agreement in distributing specific assets.

If two heirs want one specific item (as mentioned by you) and no agreement can be reached for the disputed item, the heirs can agree to auction the item and sell it to the highest bidder amongst the heirs.  Whoever is willing to pay the most for the disputed item will take ownership of it. This will be valid if all heirs agree to the auction and there is an executor, etc. on behalf of a non-Baaligh child or insane heir.  The heir will then (after deducting his/her share of the item’s value) pay the rest of the heirs for the item with the inheritance he receives or any other money which he has. This payment will then be distributed amongst the remaining heirs.

If no agreement (of an auction) can be reached between the heirs, the rules of Qismah (dividing an item in portions according to Shar’iah) will apply. The rules of Qismah are detailed in the books of Fiqh and each item will have a ruling of being divided depending under which category it falls: So let us say that it is an item which is capable of being physically divided, then it must be physically apportioned with each heir being given his/her respective share. For example, there are 20 Kilograms of rice in the estate for instance, then this will be physically apportioned and each heir will be given the amount of kilos due to him/her. In the case of an indivisible item such as the example of a motor vehicle, each heir will inherit a proportionate percentage of the vehicle. If any heir wishes to take the vehicle, he can buy out the shares of the other heirs, at a mutually-agreed price. If two heirs want the vehicle, they can jointly purchase the vehicle from the other heirs. If no agreement can be reached here too, the vehicle can be sold on the market to an outsider and the proceeds of the sale can then be distributed amongst the heirs, in proportion to their Shar’ie shares. 

3) This will be permissible and such an arrangement will be regarded as a promise. Heir 2 is then morally obliged to fulfill his promise, meaning that it would be meritorious for heir 2 to honour the promise of selling his share in asset “X” to heir 1. This promise is however, not binding on him in terms of Shari’ah which means that after the estate is winded up, heir 2 can change his mind and not sell his share in asset “X” to heir 1 and instead sell it to another heir or even to an outsider.  (it must however be noted that at the time of making the promise, his intention must not be to break the promise, but to keep the promise. Yes, after the estate is winded up, if certain valid factors constrain him not to honour the promise, he is at liberty to do so).

4) There must be transparency in the winding up of the estate. Based on this yes, the heirs do have a right to be fully informed about how the estate was valued and the shares determined. They have the right to receive a list of all assets and liabilities and how the value of each was determined. 

5) It is not permissible for the executor to force an inheritor to accept an asset as his share of the inheritance.  Rather he should leave it to the inheritors to make an agreement amongst themselves. If they cannot reach an agreement, then Qismah will be applied (which was explained above in paragraph No. 4 of Answer #2).

6) From the outset, no heir has more merit in terms of what you have averred. In terms of Shari’ah, each heir becomes an owner according to his/her share in every item left by the deceased. After all the heirs are allotted their shares, then the heirs can reach a mutual understanding amongst themselves and decide who should receive what asset on the basis of who can benefit the most from that asset. If they then all agree to allot that asset to a certain heir, the remaining heirs can either gift or sell their portions in that asset to that designated heir. 

7) It is advisable for the deceased to specify in his Will which Mufti/Aalim or Ulema organization should intervene at the time of dispute. This would be the ideal way as it would resolve the issue of Fatwa shopping and “My Moulana” vs “Your Moulana”. If the deceased himself did not appoint anyone to resolve disputes, the heirs should (with mutual agreement) appoint a learned and reliable arbitrator. The decision of the arbitrator will then be regarded as binding on all the heirs.