Standard Bank launches a bespoke Shari’ah discretionary trust offering

Standard Bank, Africa’s largest financial services organisation, is excited to announce the introduction of a Shari’ah-compliant discretionary trust for anyone who wants to structure their assets and conduct their estate planning according to Shari’ah principles or guidelines.

In order to be deemed Shari’ah compliant, there is a defined framework specific to Shari’ah estate planning which is, in certain instances, in stark contrast to a conventional estate plan.

“The trust structure may be perceived as an appealing solution to meet the financial and estate planning goals of our Muslim clients on the continent, which was not available up until now,” explains Ameen Hassen, Head of Standard Bank’s Shariah Banking. “The Shari’ah trust offering provides a way for individuals to distribute their assets in accordance with the principles of Islamic law.”

“The Muslim faith has very specific requirements when it comes to investing and estate planning. Muslims are now able to grow, preserve and pass on their family wealth while still complying with Shari’ah law,” Mohamed Jeewa says, Head of Trusts for Standard Trust Limited, Standard Bank’s fiduciary services provider. “The Shari’ah discretionary trust offering from Standard Bank, offers just this – a way for Muslim families to preserve wealth for future generations and charitable causes in a Shari’ah compliant manner.”

The main principles of the trust structure provide for the holding of assets for future beneficiaries and transfer of ownership, making it an effective tool in estate and succession planning. Provision can be made for the inclusion of family-owned businesses, the family obligations for Zakat payments and the preservation of family values. Zakat is a key part of the Islamic social welfare system which requires Muslims to give 2.5% of their qualifying assets each year to help those in need.

“Beyond the basic tax deductions for charitable giving, setting up the Inter Vivos trust could provide financial advantages in addition to the peace of mind in knowing that the money is held in a structure in which it can be preserved and distributed to the right beneficiaries,” says Jeewa. “This is highly valuable to the Muslim community, where charitable giving is part of upholding the principles of Islam.”

Globally and in South Africa, there is often a loss of wealth when transferred from one generation to the next. As a way to mitigate this loss, trust structures provide a way to implement rules for inheritance, and to ensure that it considers the needs of those who inherit the money and the needs of individuals who come after that. This helps to ensure the sustainability of the inheritance over the long term.

Standard Bank’s Shari’ah-compliant offering includes estate planning to ensure that your family is provided for through a comprehensive plan in a Shari’ah-compliant manner.

The latest addition to Standard Bank’s suite of Shari’ah compliant solutions provides a new avenue for clients who seek structures that help them achieve their strategic objectives and make optimal arrangements in their asset management and estate planning, which is very important to clients.