Disposing of interest from estate

Question:-

I’m an executor of my late father’s estate. Through the years, income and expenses were deposited and paid out from a separate bank account on my name. On a yearly basis, a balance sheet was drawn up and income was distributed as stipulated in Shariah. Due to having a bank account, interest had accrued over the years, and I have documented the interest separately so that I could differentiate the true income and interest values. During the Covid period, I paid out some interest to people who were desperate, with them getting their Mufti’s approval to receive such interest monies. I did not let all the heirs know that I’ve paid the said amount.

1. Do the heirs have the right to approve such an interest payment?
2. Does an heir have a right to claim interest accrued?
3. In which way should I resolve this issue and do away with the interest?
4. Can I solely use my discretion on what to do with the interest money?
5. Can bonds, tickets, etc. be paid with interest money?

In my personal opinion, interest money has no basis, value, claims nor rewards, therefore, I feel I should be able to use my discretion.

Answer:-

1. It is the duty of the executor to ensure that the estate is distributed in accordance to the Shari’ee law of succession. You have stated in your query that you have distributed the estate and the income derived from the estate, as required in Shariah. The Haraam interest funds accumulated in the bank account does not belong to the estate, so it is your duty as the executor to ensure that it reaches the correct recipients i.e. poor Muslims who are eligible for Zakaat or, poor non-Muslims. Since, the funds do not belong to the estate nor the heirs, you may dispose of it (to the correct recipients) without having to notify the heirs.
2. The heirs have no right to claim the interest funds since the interest funds do not belong to them.
3. In future, you should keep record of the people that received interest funds from you, so that the heirs may verify with them, should they wish to do so. You should also keep a record of all the bank statements which must, at all times, be accessible for the heir’s perusal. This will indicate to the heirs the total interest accrued in the estate account and how it was disposed of. However, interest funds should be disposed of as soon as they come into the account, and should not be accumulated. In conclusion, you may continue distributing the interest funds to the poor as you have been doing in the past.
4. It is your responsibility as the executor to dispose of it, hence, you should dispose of it as required in Shariah. However, being the executor of the estate, you may select the recipients according to your discretion.
5. The view of our Darul Ifta is that, it is not permissible to take any form of benefit from interest funds. It can either be returned to the financial institute from which it was received, or given to the poor.

يبدأ من تركة الميت الخالية عن تعلق حق الغير بعينها (رد المحتار ص663 ج5)

فيجب رد عين الربوا لو قائما لا رد ضمانه وقال الشامي وانما يجب رد ضمانه لو استهلكه  (رد المحتار ص244 ج2)

 Also check:- Fataawa Mahmoodiyyah Pg.176 Vol.30

ALLAH TA’ALA KNOWS BEST!

ANSWERED BY:-

Mufti Mohammed Desai

Date: 24 Rajab 1444 / 15 February 2023