Giving conditional hibah / Mohammed Haikal Hanan … [et al.]

Hibah is one of the important instruments used in Islamic wealth management. Hibah occurs when an individual confers his valuable asset to another, during his lifetime unilaterally, without any due consideration. Hibah in its original form is considered a tabarru' contract, which is made without any reverse intention. In Islam, the practice of giving the hibah is encouraged among Muslims as it promotes the concept of maqasid of Shari' ah in tenns of the protection of wealth as well as strengthening the relationship with one another. In Malaysia, the hibah instrument is usually used by Muslims in planning asset distribution to the intended beneficiaries about specific assets, whereby the ownership of the asset is transferred to the beneficiary during the donor's lifetime or in certain circumstances, allowed conditionally after the death of the donor.

The concept of conditional hibah has gained popularity in recent years as a means of structuring charitable donations or endowments in Islamic finance. By attaching conditions to the gift, donors can ensure that their donations are used for specific purposes or projects that align with their values and beliefs. For example, a donor might give a conditional hibah to a charitable organization with the stipulation that the funds be used to build a school or hospital in a particular community. In addition to charitable giving, conditional hibah is also used in other areas of Islamic finance, such as estate planning and asset protection. For example, a parent might give a conditional hibah to their child with the stipulation that the child use the funds to start a business or further their education. This can help to ensure that the wealth is used in a way that is consistent with the parent's values and goals.

Overall, the concept of conditional hibah is an important aspect of Islamic finance and has been widely used for centuries as a means of transferring wealth and property. By attaching conditions to the gift, donors can ensure that their donations are used in a way that is consistent with their values and beliefs, making it a powerful tool for charitable giving, estate planning, and asset protection.