Family Equalization & Fair Distribution

When succession begins, the founder may want one family member to remain involved in the business while others receive value through different assets or arrangements. The founder may also want to create a particular balance between family members within the applicable legal framework and the Sharia rules governing the succession process. In some cases, entitlements may differ between heirs, between male and female heirs, or because there is more than one wife. The objective is therefore not necessarily for every family member to receive the same assets or the same value. It may be to implement the founder’s intentions and organize the distribution of wealth within the applicable rules while creating an appropriate economic balance.

But many important assets cannot be divided easily.

Dividing the ownership of a business or selling an important asset may affect its value or continuity. This is where liquidity becomes important. Liquidity may allow one family member to retain a business or important asset while other family members receive value in another form, without requiring the family to sell or fragment assets it wants to preserve.

Family equalization and fair distribution are therefore not only questions of ownership.

They are also questions of liquidity.