Proceeds to a named beneficiary are generally tax-free and bypass probate and creditors.
The Canadian position
Proceeds to a named beneficiary are generally tax-free and bypass probate and creditors.
Whether an asset passes through the estate determines both the probate cost and who ultimately receives it.
The Islamic position
Outside the estate, so outside the shares. Views on conventional insurance itself differ among scholars.
The fixed shares apply only to the net estate. Anything passing outside it is never divided by faraid.
The four Sunni schools are not recorded as differing materially on this point in the sources reviewed. Where your own case turns on it, put it to a scholar of your school.
What to do about it
- Confirm how your life insurance policy is currently held or designated.
- Decide deliberately whether it should follow the shares.
- Take tax advice before changing a designation.
- Re-check whenever the will changes.
General information, not legal or religious advice. Inheritance depends entirely on the exact family circumstances. Confirm the Canadian position with a lawyer in your province and any religious ruling with a qualified scholar.
Citations & sources
Every factual claim on this page traces to one of the references below. Legislation and dollar thresholds change — verify against the primary source before relying on any figure.
- Surah an-Nisa 4:11 — shares of children and parents — Quran.com
- Surah an-Nisa 4:12 — shares of spouses and uterine siblings — Quran.com
- Surah an-Nisa 4:176 — the kalalah verse — Quran.com
- Research Papers — Cambridge Muslim College
- Research — Cambridge Muslim College
- Academics — Islamic law and theology curriculum — Zaytuna College
- Encyclopaedia of Islam — Brill
- What to do when someone has died — Canada Revenue Agency
- What to do when someone has died — Canada Revenue Agency
- Income Tax Act, RSC 1985, c 1 (5th Supp) — Justice Laws Canada
- Multiple beneficiaries split rrsp — Treadstone Law
- What happens rrsp estate no beneficiary ontario — Treadstone Law
- Can you designate beneficiary in a will ontario — Treadstone Law
- Us beneficiary estate tax reporting canadian estate ontario — Treadstone Law
- Multiple beneficiaries disagree on selling the house ontario — Treadstone Law
- Group rrsp beneficiary ontario — Treadstone Law
- Wills & estates practice — Treadstone Law