{ "_meta": { "dataset": "halal-finance-glossary-us", "name": "Halal & Islamic Finance Glossary (U.S.)", "description": "HalalWallet's full Islamic-finance glossary as a structured, machine-readable dataset — every term (Murabaha, Ijara, Musharakah, riba, gharar, zakat, Faraid, Takaful, sukuk, and more) with its Arabic, category, short definition, full definition, related terms, and canonical URL.", "url": "https://www.halalwallet.us/data/halal-finance-glossary-us", "downloadUrl": "https://www.halalwallet.us/api/data/halal-finance-glossary-us.json", "publisher": { "@type": "Organization", "name": "HalalWallet", "url": "https://www.halalwallet.us", "logo": "https://www.halalwallet.us/mainlogo_1.png" }, "license": "CC BY 4.0", "licenseUrl": "https://creativecommons.org/licenses/by/4.0/", "datePublished": "2026-06-30", "dateModified": "2026-06-30", "temporalCoverage": "2026", "spatialCoverage": "United States", "citation": "HalalWallet. \"Halal & Islamic Finance Glossary (U.S.).\" 2026-06-30. https://www.halalwallet.us/data/halal-finance-glossary-us", "changelog": [ { "date": "2026-06-30", "note": "Initial public release: full Islamic-finance glossary as a structured DefinedTermSet dataset." } ], "generatedAt": "2026-07-01T02:24:14.205Z", "categories": [ "Banking", "Charitable", "Contracts", "Estate Planning", "Financing Structures", "General", "Governance", "Insurance", "Investment", "Prohibitions", "Roles", "Zakat" ], "totalTerms": 97 }, "records": [ { "slug": "aaoifi", "term": "AAOIFI", "arabic": null, "pronunciation": "ah-OH-ih-fee", "category": "Governance", "shortDefinition": "The primary international standard-setting body for Islamic finance.", "definition": "Accounting and Auditing Organization for Islamic Financial Institutions. The primary international body that sets Shariah accounting, auditing, governance, and ethical standards for Islamic finance. Founded in 1991 and headquartered in Bahrain, AAOIFI's standards are followed by institutions in over 45 countries. Its Shariah standards provide detailed guidance on permissible contract structures, investment screening, and financial reporting for Islamic financial products.", "relatedTerms": [ "ifsb", "shariah-board", "shariah", "fatwa" ], "sameAs": "https://en.wikipedia.org/wiki/Accounting_and_Auditing_Organization_for_Islamic_Financial_Institutions", "url": "https://www.halalwallet.us/glossary/aaoifi" }, { "slug": "ahl-al-faraid", "term": "Ahl al-Fara'id", "arabic": "أَهْل الْفَرَائِض", "pronunciation": "AHL al-fa-RAH-id", "category": "Estate Planning", "shortDefinition": "The heirs whose shares of the estate are fixed by the Qur'an — typically the spouse, children, parents, and siblings.", "definition": "Literally \"the people of the prescribed shares.\" The category of heirs whose inheritance shares are explicitly fixed in the Qur'an (Surah An-Nisa 4:11-12, 4:176): a predetermined fraction such as 1/2, 1/4, 1/8, 2/3, 1/3, or 1/6. Classical Sunni jurists identify 13 specific Qur'anic heirs: four males (husband, father, paternal grandfather, maternal brother) and nine females (wife, mother, daughter, son's daughter, paternal grandmother, maternal grandmother, full sister, paternal sister, maternal sister). Their shares are calculated first; any balance is distributed by ta'sib or radd.", "relatedTerms": [ "faraid", "tasib", "radd", "awl-inheritance", "mirath" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/ahl-al-faraid" }, { "slug": "amana", "term": "Amana", "arabic": "أمانة", "pronunciation": "ah-MAH-nah", "category": "General", "shortDefinition": "Trust or safekeeping — a fiduciary relationship in Islamic finance.", "definition": "Trust or safety. In Islamic finance, refers to a trust arrangement where assets are held by one party on behalf of another. The trustee is obligated to protect the assets and return them upon request. The concept underpins custodial banking relationships and trust-based investment structures. The Amana Funds by Saturna Capital — one of the oldest and largest halal mutual fund families in the U.S. — are named after this concept.", "relatedTerms": [ "wadiah", "wakalah" ], "sameAs": "https://en.wikipedia.org/wiki/Amanah", "url": "https://www.halalwallet.us/glossary/amana" }, { "slug": "aqiqah", "term": "Aqiqah", "arabic": "عقيقة", "pronunciation": "ah-KEE-kah", "category": "General", "shortDefinition": "The Sunnah sacrifice of gratitude for a newborn — traditionally two sheep for a boy and one for a girl on the seventh day.", "definition": "The sacrifice offered in gratitude for the birth of a child, from the confirmed Sunnah: 'Every child is in pledge for its aqiqah — it is sacrificed for him on his seventh day, his head is shaved, and he is given a name' (Sunan Abi Dawud 2838). Two comparable sheep are offered for a boy and one for a girl (Jami' at-Tirmidhi 1513), with one sufficing for a boy where means are limited (Sunan Abi Dawud 2841). The majority of scholars classify the aqiqah as a strongly emphasized Sunnah rather than an obligation; it remains valid if performed late, and the meat is eaten, gifted, and shared with the poor. The new-child milestone is also when Muslim parents typically name guardians in their wills and begin halal education savings.", "relatedTerms": [ "walima", "sadaqah" ], "sameAs": "https://en.wikipedia.org/wiki/Aqiqah", "url": "https://www.halalwallet.us/glossary/aqiqah" }, { "slug": "arbun", "term": "Arbun", "arabic": "عربون", "pronunciation": "ar-BOON", "category": "Contracts", "shortDefinition": "A non-refundable down payment or earnest money to secure a purchase.", "definition": "A down payment or earnest money in an Islamic contract. The buyer pays a non-refundable deposit to secure the right to purchase an asset at a later date. If the buyer proceeds, the deposit is applied to the purchase price. If the buyer withdraws, the deposit is forfeited. Some scholars compare it to a call option in conventional finance, though its permissibility varies among the schools of Islamic jurisprudence.", "relatedTerms": [ "bay", "murabaha" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/arbun" }, { "slug": "augmented-estate", "term": "Augmented Estate", "arabic": null, "pronunciation": "AWG-men-ted es-TATE", "category": "Estate Planning", "shortDefinition": "The expanded U.S. probate concept used to calculate elective shares — including non-probate transfers a surviving spouse would otherwise lose access to.", "definition": "A U.S. probate concept used in many states (under the Uniform Probate Code and similar statutes) to calculate a surviving spouse's elective share. The augmented estate includes not just probate assets but also various non-probate transfers — life insurance, jointly held property, trust assets, and gifts made within two years of death — so that a spouse cannot be cut out by simply moving assets outside the will. For Muslim Americans, this means an elective-share waiver in a prenup must address the augmented estate, not just the probate estate, to fully preserve Faraid. Florida (Fla. Stat. § 732.2035), Idaho (§ 15-2-202), and Wisconsin (§ 861.02) are examples of states with augmented-estate frameworks.", "relatedTerms": [ "elective-share", "wasiyyah", "faraid" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/augmented-estate" }, { "slug": "bai-al-inah", "term": "Bai' al-Inah", "arabic": "بيع العينة", "pronunciation": "BAY al-EE-nah", "category": "Contracts", "shortDefinition": "A sale-and-buyback arrangement used to generate cash flow.", "definition": "A financing technique where a seller sells an asset to a buyer on deferred payment terms, then immediately repurchases it from the buyer for a lower cash price. The net effect provides the buyer with immediate cash and a deferred obligation — similar to a loan with interest. Widely used in Malaysian Islamic finance but considered impermissible by most Middle Eastern scholars and AAOIFI, who view it as a legal device (hilah) to circumvent the prohibition on riba.", "relatedTerms": [ "tawarruq", "riba", "murabaha" ], "sameAs": "https://en.wikipedia.org/wiki/Bai%27_al-%27inah", "url": "https://www.halalwallet.us/glossary/bai-al-inah" }, { "slug": "bay", "term": "Bay'", "arabic": "بيع", "pronunciation": "BAY", "category": "Contracts", "shortDefinition": "A sale contract — the foundational transaction type in Islamic commercial law.", "definition": "The Arabic term for sale or sale contract. Bay' is the foundational commercial transaction in Islamic finance. For a bay' to be valid under Shariah, it must involve: (1) a clearly identified subject matter that exists at the time of sale, (2) a known price, (3) willing buyer and seller, and (4) the goods must be halal. Various Islamic financing structures (Murabaha, Salam, Istisna'a) are specialized forms of bay' with specific conditions.", "relatedTerms": [ "murabaha", "salam", "istisna" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/bay" }, { "slug": "burse", "term": "Burse (Islamic Exchange)", "arabic": "بورصة", "pronunciation": "BOOR-sah", "category": "Investment", "shortDefinition": "An Islamic stock exchange or securities market operating under Shariah principles.", "definition": "An exchange or securities market that operates in accordance with Islamic principles. Islamic exchanges screen listed companies for Shariah compliance, excluding those with excessive debt ratios, haram revenue streams (alcohol, gambling, pork, conventional finance), or prohibited business activities. Major Islamic indices — like the Dow Jones Islamic Market Index and S&P Shariah Indices — apply quantitative and qualitative screens to determine eligibility.", "relatedTerms": [ "halal-screening", "shariah", "sukuk" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/burse" }, { "slug": "commodity-murabaha", "term": "Commodity Murabaha", "arabic": "مرابحة السلع", "pronunciation": "moo-RAH-bah-hah as-SIL-ah", "category": "Financing Structures", "shortDefinition": "A Murabaha transaction using commodities (often metals) as the underlying asset to facilitate cash financing.", "definition": "A variation of Murabaha used to provide cash financing. The financier purchases a commodity (typically metals on the London Metal Exchange) and sells it to the client at a markup on deferred terms. The client then sells the commodity for cash to a third party at the current market price, receiving the cash they need. Also known as Tawarruq when structured through a third-party sale. Widely used for personal financing and treasury management in Islamic banking.", "relatedTerms": [ "murabaha", "tawarruq" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/commodity-murabaha" }, { "slug": "dhaman", "term": "Dhaman", "arabic": "ضمان", "pronunciation": "dha-MAAN", "category": "Contracts", "shortDefinition": "A guarantee or warranty in Islamic commercial transactions.", "definition": "A guarantee or warranty in Islamic law. In commercial transactions, dhaman refers to a guarantee provided by a third party to cover a financial obligation if the primary debtor defaults. Unlike conventional guarantees that may involve a fee (which could constitute riba), an Islamic guarantee (kafalah) should ideally be provided without charge as a charitable act, though some scholars permit a fee to cover administrative costs.", "relatedTerms": [ "kafalah", "rahn" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/dhaman" }, { "slug": "dhawu-al-arham", "term": "Dhawu al-Arham", "arabic": "ذَوُو الْأَرْحَام", "pronunciation": "thah-WOO al-ar-HAAM", "category": "Estate Planning", "shortDefinition": "Distant kindred who inherit only when no Qur'anic or residuary heirs survive.", "definition": "Literally \"those of the wombs\" — the third and most distant tier of Islamic heirs. Dhawu al-Arham inherit only when no Qur'anic heirs (ahl al-fara'id) and no residuary heirs (asaba) survive. The category includes descendants of daughters (e.g., daughter's children), descendants through female lines on the father's side, and various other non-agnate relatives. The Hanbali, Hanafi, and Shafi'i schools recognize dhawu al-arham inheritance; the classical Maliki position routed the estate to the public treasury (bayt al-mal) instead, though modern Maliki scholars accept dhawu al-arham when no functional Islamic state exists.", "relatedTerms": [ "faraid", "ahl-al-faraid", "tasib", "mirath" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/dhawu-al-arham" }, { "slug": "diminishing-partnership", "term": "Diminishing Partnership", "arabic": "مشاركة متناقصة", "pronunciation": "moo-SHAH-rah-kah moo-tah-NAH-ki-sah", "category": "Financing Structures", "shortDefinition": "A co-ownership arrangement where the buyer gradually purchases the provider's share — the most common halal mortgage structure in the U.S.", "definition": "See Musharakah Mutanaqisah. A co-ownership arrangement where one partner gradually buys out the other's share over time. The most common halal mortgage structure in the United States, used by Guidance Residential and UIF Corporation. The buyer and financial institution co-purchase the property; the buyer's ownership percentage increases with each payment while the institution's share diminishes. Monthly payments typically include a portion that increases the buyer's equity and a rental payment for the institution's share.", "relatedTerms": [ "musharakah-mutanaqisah", "musharakah", "ijara" ], "sameAs": "https://en.wikipedia.org/wiki/Diminishing_musharakah", "url": "https://www.halalwallet.us/glossary/diminishing-partnership" }, { "slug": "elective-share", "term": "Elective Share", "arabic": null, "pronunciation": "eh-LEK-tiv shair", "category": "Estate Planning", "shortDefinition": "The U.S. state-law right of a surviving spouse to claim a fixed portion of the deceased spouse's estate — overriding any will.", "definition": "A statutory entitlement in nearly every U.S. state that allows a surviving spouse to claim a fixed share of the deceased spouse's estate — typically one-third to one-half — regardless of what the deceased spouse's will provides. For Muslims, the elective share is the single biggest threat to Faraid: without an explicit waiver, a surviving spouse can override the Islamic inheritance distribution that a wasiyyah was designed to produce. The only reliable way to preserve Faraid is a mutual elective-share waiver, executed before the marriage as part of an Islamic prenup (or after the marriage as part of a postnup, with state-specific scrutiny).", "relatedTerms": [ "faraid", "wasiyyah", "mirath" ], "sameAs": "https://en.wikipedia.org/wiki/Elective_share", "url": "https://www.halalwallet.us/glossary/elective-share" }, { "slug": "esg-sukuk", "term": "ESG Sukuk", "arabic": null, "pronunciation": "E-S-G soo-KOOK", "category": "Investment", "shortDefinition": "Sukuk whose proceeds are earmarked for environmental, social, or sustainability-linked projects.", "definition": "Sukuk issued under a Shariah-compliant structure where the proceeds are ring-fenced for environmental, social, or sustainability-linked projects — commonly bundled as 'green sukuk' (renewable energy, clean transport), 'social sukuk' (affordable housing, healthcare), or 'sustainability sukuk' (mixed). The ESG framework overlays well on Islamic finance principles because both prohibit harmful industries and emphasize maqasid al-Shariah (objectives that benefit society). Malaysia issued the world's first green sukuk in 2017 (Tadau Energy); Indonesia followed with the first sovereign green sukuk in 2018. Saudi Arabia and the UAE are now the largest sovereign green-sukuk issuers. For U.S. Muslim investors, ESG sukuk are accessible primarily through emerging-market and global sukuk ETFs that include sustainability-screened tranches.", "relatedTerms": [ "sukuk", "halal-screening", "ijara" ], "sameAs": "https://en.wikipedia.org/wiki/Green_sukuk", "url": "https://www.halalwallet.us/glossary/esg-sukuk" }, { "slug": "falah", "term": "Falah", "arabic": "فلاح", "pronunciation": "fah-LAAH", "category": "General", "shortDefinition": "Success and well-being in this life and the hereafter — the ultimate objective of Islamic economic activity.", "definition": "A Quranic concept meaning success, prosperity, and well-being in both this life and the hereafter. In Islamic economics, falah represents the ultimate goal of all financial and commercial activity — not merely profit maximization, but holistic well-being that includes spiritual fulfillment, social justice, and sustainable prosperity. This concept distinguishes Islamic finance from purely profit-driven conventional models.", "relatedTerms": [ "maqasid-al-shariah", "shariah" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/falah" }, { "slug": "faraid", "term": "Faraid", "arabic": "فرائض", "pronunciation": "fah-RAH-id", "category": "Estate Planning", "shortDefinition": "Islamic inheritance law prescribing fixed shares for heirs based on Quranic guidelines.", "definition": "Islamic inheritance law. A system of fixed shares that dictates how a deceased Muslim's estate is distributed among heirs. Designated shares go to the spouse, children, parents, and siblings according to Quranic guidelines (primarily Surah An-Nisa, 4:11-12). The system ensures wealth is distributed broadly rather than concentrated. In the U.S., a valid Islamic will (wasiyyah) is typically needed to ensure Faraid compliance, as state intestacy laws follow different distribution rules. Providers like ShariaWiz offer Faraid-compliant estate plans.", "relatedTerms": [ "wasiyyah", "waqf", "mirath", "asaba", "radd", "awl-inheritance", "hajb" ], "sameAs": "https://en.wikipedia.org/wiki/Islamic_inheritance_jurisprudence", "url": "https://www.halalwallet.us/glossary/faraid" }, { "slug": "faskh", "term": "Faskh", "arabic": "فسخ", "pronunciation": "FASKH", "category": "Contracts", "shortDefinition": "Judicial annulment of a marriage by an Islamic judge or scholarly authority for a valid cause.", "definition": "A dissolution of marriage granted by a qadi (Islamic judge) or scholarly body for a recognized cause — such as harm, abuse, abandonment, or the husband's failure to provide (nafaqah). Faskh differs from khula in that the wife does not generally return the mahr, because the dissolution is granted on the basis of fault or hardship rather than as a negotiated release. It differs from talaq in that the dissolution is pronounced by a judicial authority rather than the husband. In the United States, a faskh has no automatic civil effect; the couple still needs a civil divorce, and an Islamic prenup can codify the financial consequences in enforceable terms.", "relatedTerms": [ "talaq", "khula", "iddah", "nikah" ], "sameAs": "https://en.wikipedia.org/wiki/Divorce_in_Islam", "url": "https://www.halalwallet.us/glossary/faskh" }, { "slug": "fatwa", "term": "Fatwa", "arabic": "فتوى", "pronunciation": "FAT-wah", "category": "Governance", "shortDefinition": "A religious ruling on a specific matter issued by a qualified Islamic scholar.", "definition": "A religious ruling or opinion issued by a qualified Islamic scholar (mufti) on a specific matter. In finance, a fatwa may certify that a product or transaction complies with Shariah principles. A fatwa is not binding law — it is a scholarly opinion that carries weight based on the credentials of the issuing scholar and the rigor of the analysis. Financial institutions may seek fatwas from individual scholars or Shariah boards to validate their product structures.", "relatedTerms": [ "shariah-board", "shariah", "aaoifi", "fiqh-al-muamalat" ], "sameAs": "https://en.wikipedia.org/wiki/Fatwa", "url": "https://www.halalwallet.us/glossary/fatwa" }, { "slug": "fiqh-al-aqalliyyat", "term": "Fiqh al-Aqalliyyat", "arabic": "فِقْه الْأَقَلِّيَّات", "pronunciation": "FIQH al-a-kal-LEE-yaat", "category": "Governance", "shortDefinition": "Islamic jurisprudence developed specifically for Muslims living as minorities in non-Muslim-majority societies.", "definition": "Literally \"jurisprudence of minorities.\" A modern branch of Islamic legal scholarship that addresses how Muslims living in non-Muslim-majority jurisdictions can practice Islamic law within secular legal systems. Pioneered by Yusuf al-Qaradawi and Taha Jabir al-Alwani in the 1990s, fiqh al-aqalliyyat rests heavily on maslaha (public benefit) and recognizes that some classical rulings developed in Muslim-majority contexts require recalibration for minority contexts. A 2025 peer-reviewed study in Asy-Syir'ah Journal explicitly placed Islamic estate-planning platforms like Shariawiz within this framework — translating mandatory Faraid principles into U.S. trust-and-estate law.", "relatedTerms": [ "maslaha", "fiqh", "ijtihad", "shariah" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/fiqh-al-aqalliyyat" }, { "slug": "fiqh-al-muamalat", "term": "Fiqh al-Muamalat", "arabic": "فقه المعاملات", "pronunciation": "FIKH al-moo-ah-mah-LAHT", "category": "Governance", "shortDefinition": "Islamic jurisprudence governing commercial and financial transactions.", "definition": "The branch of Islamic jurisprudence (fiqh) that governs commercial and financial transactions. It covers the rules for sales, partnerships, leases, guarantees, agency, and all forms of economic exchange. Fiqh al-muamalat is derived from the Quran, Sunnah (prophetic traditions), ijma (scholarly consensus), and qiyas (analogical reasoning). It provides the legal foundation for all Islamic financial products. Different schools of thought (Hanafi, Maliki, Shafi'i, Hanbali) may reach different conclusions on specific structures.", "relatedTerms": [ "shariah", "fatwa", "maqasid-al-shariah" ], "sameAs": "https://en.wikipedia.org/wiki/Fiqh", "url": "https://www.halalwallet.us/glossary/fiqh-al-muamalat" }, { "slug": "forced-heirship", "term": "Forced Heirship", "arabic": null, "pronunciation": "FORCED HEIR-ship", "category": "Estate Planning", "shortDefinition": "A civil-law rule (notably in Louisiana) reserving a portion of the estate for specific children — limiting testamentary freedom.", "definition": "A legal rule, primarily of civil-law (Roman-law) origin, that reserves a portion of a deceased person's estate for specific heirs (usually children) and limits the deceased's ability to disinherit them. In the United States, Louisiana is the only state with forced heirship — significantly narrowed by 1996 constitutional amendment, but still binding for children under 24 or with disabilities (Louisiana Civil Code arts. 1493–1495). For Muslim families in Louisiana, the interaction between civil-law forced heirship and Faraid is generally favorable: both regimes reserve shares for children, and a properly drafted Islamic will can align them. For Muslim families everywhere else, forced heirship is mostly relevant as a comparison: U.S. law lets you disinherit children, but Islam does not.", "relatedTerms": [ "faraid", "wasiyyah", "elective-share" ], "sameAs": "https://en.wikipedia.org/wiki/Forced_heirship", "url": "https://www.halalwallet.us/glossary/forced-heirship" }, { "slug": "gcc", "term": "GCC", "arabic": "مجلس التعاون الخليجي", "pronunciation": "G-C-C", "category": "General", "shortDefinition": "The six-country Gulf Cooperation Council — the world's most concentrated Islamic finance region.", "definition": "Gulf Cooperation Council. The political and economic union of six Arab states bordering the Persian Gulf: Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Qatar, and Oman. Together the GCC accounts for the largest share of global Islamic banking assets, roughly half of all sukuk issuance, and a disproportionate share of takaful premiums. Saudi Arabia and the UAE are the two dominant Islamic-finance hubs in the bloc, with Bahrain historically serving as the regional standard-setting center (it hosts AAOIFI). For U.S. Muslim investors, GCC exposure is the default in most halal global-equity and sukuk ETFs.", "relatedTerms": [ "sukuk", "takaful", "aaoifi" ], "sameAs": "https://en.wikipedia.org/wiki/Gulf_Cooperation_Council", "url": "https://www.halalwallet.us/glossary/gcc" }, { "slug": "gharar", "term": "Gharar", "arabic": "غرر", "pronunciation": "ghah-RAHR", "category": "Prohibitions", "shortDefinition": "Excessive uncertainty or ambiguity in a contract — one of the three major prohibitions in Islamic finance.", "definition": "Excessive uncertainty or ambiguity in a contract. One of the three major prohibitions in Islamic finance (alongside riba and maysir). Contracts must have clearly defined terms, subject matter, price, and obligations. Gharar is prohibited because it can lead to exploitation, disputes, and injustice. Minor uncertainty (gharar yasir) is tolerated in everyday transactions, but major uncertainty (gharar fahish) — such as selling goods that don't yet exist or whose quality is unknown — invalidates a contract. Conventional insurance is often cited as containing gharar because the outcome (claim payout) is uncertain.", "relatedTerms": [ "riba", "maysir", "takaful" ], "sameAs": "https://en.wikipedia.org/wiki/Gharar", "url": "https://www.halalwallet.us/glossary/gharar" }, { "slug": "hajb", "term": "Hajb (Blocking)", "arabic": "حجب", "pronunciation": "HAJB", "category": "Estate Planning", "shortDefinition": "The rule in Islamic inheritance by which a nearer heir reduces or excludes a more distant one.", "definition": "Hajb is the principle in Islamic inheritance (Faraid) whereby the presence of a nearer or stronger heir reduces or completely excludes a more distant one. For example, a son blocks the deceased's brothers and sisters entirely, a father blocks the grandfather, and a mother blocks the grandmother. Partial blocking (hajb nuqsan) reduces a share — a spouse drops from 1/2 to 1/4, or 1/4 to 1/8, when descendants exist. Understanding hajb is essential because it explains why some relatives inherit nothing even when they are close. A Faraid calculator applies blocking automatically.", "relatedTerms": [ "faraid", "asaba", "radd", "awl-inheritance" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/hajb" }, { "slug": "halal", "term": "Halal", "arabic": "حلال", "pronunciation": "hah-LAHL", "category": "General", "shortDefinition": "Permissible under Islamic law — in finance, products and transactions that comply with Shariah principles.", "definition": "Permissible under Islamic law. In finance, refers to products and transactions that comply with Shariah principles — avoiding interest (riba), prohibited industries, excessive uncertainty (gharar), and gambling (maysir). Halal financial products include Shariah-compliant mortgages, halal investment funds, Islamic bank accounts, and takaful insurance. The term applies broadly to all aspects of Muslim life, including food, conduct, and commercial dealings.", "relatedTerms": [ "haram", "shariah", "riba" ], "sameAs": "https://en.wikipedia.org/wiki/Halal", "url": "https://www.halalwallet.us/glossary/halal" }, { "slug": "halal-mortgage", "term": "Halal Mortgage", "arabic": null, "pronunciation": null, "category": "Financing Structures", "shortDefinition": "A home financing arrangement structured to avoid interest (riba), typically using diminishing partnership or lease-to-own models.", "definition": "A home financing arrangement structured to comply with Islamic law by avoiding interest (riba). In the U.S., halal mortgages typically use one of three Shariah-compliant structures: (1) Musharakah Mutanaqisah (diminishing partnership) — the buyer and provider co-own the property, with the buyer gradually purchasing the provider's share; (2) Ijara (lease-to-own) — the provider purchases the property and leases it to the buyer until full ownership transfers; or (3) Murabaha (cost-plus) — the provider purchases the home and sells it to the buyer at a transparent markup with installment payments. Major U.S. providers include Guidance Residential, UIF Corporation, Ijara CDC, and LARIBA.", "relatedTerms": [ "diminishing-partnership", "musharakah-mutanaqisah", "ijara", "murabaha", "riba" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/halal-mortgage" }, { "slug": "halal-screening", "term": "Halal Screening", "arabic": null, "pronunciation": null, "category": "Investment", "shortDefinition": "The process of evaluating stocks and investments for compliance with Islamic principles.", "definition": "The process of evaluating stocks, funds, and other investments for compliance with Shariah principles. Screening typically involves two layers: (1) Business activity screening — excluding companies that derive significant revenue from haram industries (alcohol, tobacco, gambling, pork, conventional finance, weapons, adult entertainment); and (2) Financial ratio screening — excluding companies with excessive debt-to-asset ratios, interest income, or impure revenue above established thresholds. Major screening providers include AAOIFI, MSCI, Dow Jones, and S&P. U.S. halal investment platforms like Wahed Invest, Azzad Asset Management, and Saturna Capital apply these screens to their fund offerings.", "relatedTerms": [ "shariah", "halal", "purification" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/halal-screening" }, { "slug": "haram", "term": "Haram", "arabic": "حرام", "pronunciation": "hah-RAHM", "category": "Prohibitions", "shortDefinition": "Prohibited under Islamic law — in finance, includes interest-based products and investments in prohibited industries.", "definition": "Prohibited under Islamic law. In finance, includes interest-based products, investments in alcohol, gambling, pork, weapons, tobacco, and adult entertainment industries. Conventional mortgages, personal loans with interest, credit card interest charges, and savings account interest are all forms of haram financial activity. Muslims are instructed to avoid both earning and paying riba, and to ensure their investments and financial dealings are free from haram elements.", "relatedTerms": [ "halal", "riba", "maysir", "gharar" ], "sameAs": "https://en.wikipedia.org/wiki/Haram", "url": "https://www.halalwallet.us/glossary/haram" }, { "slug": "hawl", "term": "Hawl", "arabic": "حول", "pronunciation": "HOWL", "category": "Zakat", "shortDefinition": "One full lunar year — the holding period after which zakat becomes obligatory on qualifying wealth.", "definition": "One full lunar year (approximately 354 days). Zakat becomes obligatory when qualifying wealth above the Nisab threshold has been held for one complete Hawl. The lunar calendar is used rather than the solar calendar, meaning the Zakat due date advances by approximately 11 days each year. Some scholars permit using the solar year for convenience, adjusting the rate to 2.577% to account for the longer period.", "relatedTerms": [ "zakat", "nisab" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/hawl" }, { "slug": "healthcare-directive", "term": "Healthcare Directive", "arabic": null, "pronunciation": "HELTH-care dih-REK-tiv", "category": "Estate Planning", "shortDefinition": "A legal document naming who decides your medical care if you can't, and recording your moral/religious limits on end-of-life intervention.", "definition": "Also called a living will or healthcare proxy. A legal document authorizing another person to make medical decisions on your behalf when you cannot communicate, and recording your specific moral and religious wishes about end-of-life care, life support, and related issues. Most U.S. Muslim scholarly bodies — including IMANA (Islamic Medical Association of North America) and the Fiqh Council of North America — affirm healthcare directives as permissible and strongly recommended for Muslim Americans. Without a directive, family disputes or default state policy can produce outcomes that violate your faith preferences at the most vulnerable moment of your life.", "relatedTerms": [ "power-of-attorney", "wasiyyah" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/healthcare-directive" }, { "slug": "hibah", "term": "Hibah", "arabic": "هبة", "pronunciation": "HEE-bah", "category": "Banking", "shortDefinition": "A voluntary gift with no expectation of return — used in Islamic banking as discretionary bonuses on deposits.", "definition": "A voluntary gift given without any expectation of return or consideration. In Islamic banking, hibah is used by some institutions to provide returns on savings and current accounts without characterizing them as interest. The bank holds deposits under a wadiah (safekeeping) or qard (loan) arrangement and may give account holders a discretionary hibah (bonus) based on the bank's performance. Because the hibah is voluntary and not guaranteed, it is not considered riba.", "relatedTerms": [ "wadiah", "qard-hasan", "riba" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/hibah" }, { "slug": "huquq-allah", "term": "Huquq Allah", "arabic": "حُقُوق اللَّه", "pronunciation": "hoo-KOOK al-LAH", "category": "Estate Planning", "shortDefinition": "\"Rights of Allah\" — religious obligations a Muslim must discharge, including unpaid zakat and unperformed Hajj.", "definition": "Literally \"the rights of God.\" Religious obligations a Muslim must discharge that the law treats as analogous to debts. Examples include outstanding zakat, an unperformed obligatory Hajj, and missed mandatory fasting and prayers. In Islamic estate planning, scholars treat unpaid huquq Allah as debts of the estate — paid from the gross estate before any distribution to heirs, alongside ordinary contractual debts. A properly drafted Islamic will explicitly accounts for huquq Allah so the executor knows to discharge them first.", "relatedTerms": [ "zakat", "wasiyyah", "faraid" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/huquq-allah" }, { "slug": "iddah", "term": "Iddah", "arabic": "عدة", "pronunciation": "IH-dah", "category": "Contracts", "shortDefinition": "The post-divorce (or post-widowhood) waiting period during which the wife is entitled to maintenance.", "definition": "The mandatory waiting period after divorce or the death of a husband, during which the wife cannot remarry. Iddah serves multiple purposes: confirming whether the wife is pregnant, providing time for reconciliation, and giving the wife a period of stability and financial maintenance. Quranic basis: 2:228, 2:234, 65:1. Duration depends on circumstance — typically three menstrual cycles for divorce, four months and ten days for widowhood. In an Islamic prenup, iddah maintenance is preserved as a fixed financial obligation that a U.S. court can enforce alongside the prenup's other terms.", "relatedTerms": [ "talaq", "khula", "mahr", "nikah" ], "sameAs": "https://en.wikipedia.org/wiki/Iddah", "url": "https://www.halalwallet.us/glossary/iddah" }, { "slug": "ifsb", "term": "IFSB", "arabic": null, "pronunciation": "I-F-S-B", "category": "Governance", "shortDefinition": "Global standard-setter that sets prudential and supervisory standards for Islamic finance regulators.", "definition": "Islamic Financial Services Board. An international standard-setting organization based in Kuala Lumpur, Malaysia, established in 2002. While AAOIFI sets Shariah and accounting standards for institutions, IFSB sets prudential and supervisory standards for the regulators that oversee them — covering capital adequacy, risk management, governance, and stress testing for Islamic banks, takaful operators, and Islamic capital markets. Its members include central banks and financial regulators from more than 80 jurisdictions. AAOIFI and IFSB are complementary: AAOIFI tells institutions how to operate; IFSB tells regulators how to supervise them.", "relatedTerms": [ "aaoifi", "shariah-board", "shariah" ], "sameAs": "https://en.wikipedia.org/wiki/Islamic_Financial_Services_Board", "url": "https://www.halalwallet.us/glossary/ifsb" }, { "slug": "ijara", "term": "Ijara", "arabic": "إجارة", "pronunciation": "ee-JAH-rah", "category": "Financing Structures", "shortDefinition": "A lease or rental agreement — one of the three main halal home financing structures used in the U.S.", "definition": "A lease or rental agreement used in Islamic finance. In the U.S. home financing context, a funding partner purchases the property and leases it to the buyer. Ownership transfers at the end of the lease term (Ijara wa Iqtina). IjaraCDC — a 501(c)(3) nonprofit — is the leading U.S. Ijara provider, structuring financing through 100+ residential and 200+ commercial funding partners in all 50 states. Monthly payments go to Ijara (an Islamic organization) rather than a conventional bank. The structure avoids interest because payments are classified as rent rather than loan repayments. The lessor retains ownership risk, a key Shariah requirement.", "relatedTerms": [ "diminishing-partnership", "murabaha", "halal-mortgage", "musharakah" ], "sameAs": "https://en.wikipedia.org/wiki/Ijarah", "url": "https://www.halalwallet.us/glossary/ijara" }, { "slug": "intestate", "term": "Intestate", "arabic": null, "pronunciation": "in-TES-tate", "category": "Estate Planning", "shortDefinition": "Dying without a legally valid will — triggering state intestacy laws that almost never align with Faraid.", "definition": "The U.S. legal term for dying without a legally valid will. When a Muslim American dies intestate, the distribution of their estate is governed by their state's intestacy statute — a default rule set that almost never matches the Quranic shares in Surah An-Nisa 4:11-12. In Arizona, for example, a spouse with children from a prior relationship inherits half of separate property and none of the deceased's community property; in New York, a surviving spouse receives the first $50,000 plus half the balance; in Florida, half of intestate property if the spouse has other children. Faraid governs none of these outcomes. Creating an Islamic will is the only reliable way to avoid intestate distribution.", "relatedTerms": [ "wasiyyah", "faraid", "probate", "elective-share" ], "sameAs": "https://en.wikipedia.org/wiki/Intestate", "url": "https://www.halalwallet.us/glossary/intestate" }, { "slug": "islamic-family-waqf", "term": "Islamic Family Waqf", "arabic": "وَقْف عَائِلِي إِسْلَامِي", "pronunciation": "WAKF EYE-lee is-LAH-mee", "category": "Estate Planning", "shortDefinition": "A joint living revocable trust for Muslim couples, scholar-approved to manage assets in life and distribute by Faraid at death.", "definition": "A modern Islamic estate-planning instrument: a joint living revocable trust for married Muslim couples that takes effect immediately upon signing, manages both spouses' assets during their lifetimes, and at the second spouse's death distributes the remainder to Quranic heirs (Faraid). The first scholar-approved Islamic Family Waqf in the United States was co-developed by ShariaWiz and Azzad Asset Management, the largest U.S. Sharia-compliant investment firm. Unlike a simple Islamic will, a family waqf avoids probate for funded assets and gives the surviving spouse continuity of management.", "relatedTerms": [ "waqf", "wasiyyah", "faraid", "elective-share" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/islamic-family-waqf" }, { "slug": "istihsan", "term": "Istihsan", "arabic": "استحسان", "pronunciation": "is-tih-SAHN", "category": "Governance", "shortDefinition": "Juristic preference — a method of legal reasoning that allows deviation from strict analogy for the greater good.", "definition": "A method of Islamic legal reasoning meaning 'juristic preference.' It allows a scholar to depart from strict analogical reasoning (qiyas) when that reasoning would produce an impractical or unjust result, and instead adopt a ruling that better serves the public interest or the objectives of Shariah. Used particularly in the Hanafi school of thought. In Islamic finance, istihsan may justify modern product innovations that serve genuine economic needs even if they don't have exact precedents in classical jurisprudence.", "relatedTerms": [ "fiqh-al-muamalat", "shariah", "maqasid-al-shariah" ], "sameAs": "https://en.wikipedia.org/wiki/Istihsan", "url": "https://www.halalwallet.us/glossary/istihsan" }, { "slug": "istikhara", "term": "Istikhara", "arabic": "استخارة", "pronunciation": "is-ti-KHAH-rah", "category": "General", "shortDefinition": "The prayer of seeking guidance — two voluntary rakahs and a Prophetic dua prayed before a major decision such as marriage.", "definition": "Salat al-istikhara is the Sunnah prayer for seeking Allah's guidance in a permissible matter — most famously a marriage decision. The Prophet ﷺ taught it as two rakahs of voluntary prayer followed by a specific dua (Sahih al-Bukhari 1162) asking Allah to decree and facilitate the matter if it is good for one's religion, livelihood, and final outcome, and to divert it otherwise. Istikhara follows — rather than replaces — due diligence and consultation, and contrary to widespread belief, no dream, sign, or feeling is required: the answer comes through how the matter unfolds. It may be repeated while the concern persists.", "relatedTerms": [ "nikah", "khitbah" ], "sameAs": "https://en.wikipedia.org/wiki/Salat_al-Istikharah", "url": "https://www.halalwallet.us/glossary/istikhara" }, { "slug": "istisna", "term": "Istisna'a", "arabic": "استصناع", "pronunciation": "is-tis-NAH", "category": "Contracts", "shortDefinition": "A manufacturing or construction contract with pre-agreed price, specifications, and delivery timeline.", "definition": "A manufacturing or construction contract where a buyer commissions the creation of an asset to be delivered at a future date. The price, specifications, and delivery timeline are agreed upon in advance. Unlike Salam, the payment in Istisna'a can be made in installments throughout the construction period rather than in full upfront. Widely used in construction financing, project finance, and equipment manufacturing. It is one of the few Islamic contracts that permits the sale of something that does not yet exist, provided the specifications are clearly defined.", "relatedTerms": [ "salam", "bay", "murabaha" ], "sameAs": "https://en.wikipedia.org/wiki/Istisna%27", "url": "https://www.halalwallet.us/glossary/istisna" }, { "slug": "jualah", "term": "Ju'alah", "arabic": "جعالة", "pronunciation": "joo-AH-lah", "category": "Contracts", "shortDefinition": "A service-for-fee contract where payment is contingent on completing a specified task.", "definition": "A service contract where one party offers a reward or fee to another for performing a specific task or achieving a particular result. Payment is contingent upon successful completion. Unlike a standard employment contract, the worker is not guaranteed compensation if the task is not completed. In Islamic banking, ju'alah can be used to structure fee-based services such as loan processing, asset management, and advisory services without involving interest.", "relatedTerms": [ "wakalah", "ujrah" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/jualah" }, { "slug": "kafaa", "term": "Kafa'a", "arabic": "كفاءة", "pronunciation": "kah-FAH-ah", "category": "Contracts", "shortDefinition": "Compatibility or suitability between spouses considered in an Islamic marriage match.", "definition": "The concept of suitability or compatibility between prospective spouses in Islamic marriage law, traditionally considered in factors such as deen (religious commitment), character, and sometimes social or financial standing. Kafa'a functions primarily as a protection for the bride and her family: the wali may object to a clearly unsuitable match. Scholars across the madhhabs weigh the factors differently, with the strongest consensus on religion and character as the decisive considerations, echoing the Prophetic guidance to prioritize a partner's deen. Kafa'a is a consideration in arranging a marriage, not a pillar of the nikah's validity.", "relatedTerms": [ "nikah", "wali", "mahr" ], "sameAs": "https://en.wikipedia.org/wiki/Kafa%27ah", "url": "https://www.halalwallet.us/glossary/kafaa" }, { "slug": "kafalah", "term": "Kafalah", "arabic": "كفالة", "pronunciation": "kah-FAH-lah", "category": "Contracts", "shortDefinition": "A guarantee or surety where a third party assumes responsibility for another's financial obligation.", "definition": "A guarantee or surety contract in Islamic law. A third party (kafil) assumes responsibility for the financial obligations of another party (makful anhu) if that party defaults. Traditionally, kafalah should be provided as a charitable act without a fee. However, modern Islamic finance has debated whether fees for guarantees are permissible. Kafalah is used in Islamic banking for letters of credit, bank guarantees, and performance bonds. Some scholars distinguish between personal guarantees (kafalah bil-nafs) and financial guarantees (kafalah bil-mal).", "relatedTerms": [ "dhaman", "rahn" ], "sameAs": "https://en.wikipedia.org/wiki/Kafalah", "url": "https://www.halalwallet.us/glossary/kafalah" }, { "slug": "khitbah", "term": "Khitbah", "arabic": "خطبة", "pronunciation": "KHIT-bah", "category": "Contracts", "shortDefinition": "The Islamic engagement — a formal proposal and mutual promise to marry, which is not itself a marriage.", "definition": "The formal proposal and mutual promise to marry in Islam. A khitbah creates exclusivity — once a proposal is accepted, another man may not propose over it until the first matter is concluded (Sahih al-Bukhari 5142) — and legitimizes the process of the two parties getting to know one another within Islamic boundaries. It is not a nikah: the engaged couple remain non-mahram to each other until the marriage contract is concluded, and either party may still withdraw, since the khitbah is a promise rather than a binding contract. The engagement period is traditionally used for verification, consultation (istisharah), istikhara, agreeing the mahr, and preparing the marriage documents.", "relatedTerms": [ "nikah", "mahr", "wali" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/khitbah" }, { "slug": "khula", "term": "Khula", "arabic": "خلع", "pronunciation": "KHOO-lah", "category": "Contracts", "shortDefinition": "Wife-initiated divorce in Islamic law, typically involving the return of mahr.", "definition": "Wife-initiated divorce in Islamic law. The wife requests dissolution of the marriage and typically returns the mahr (or a portion of it) to the husband as compensation. Khula is grounded in Quran 2:229 and the precedent of Habiba bint Sahl. In the United States, khula procedures can be codified inside an Islamic prenup so a state court can enforce them as ordinary contract terms — for example, by setting out dispute resolution by Islamic arbitration with a binding award the civil court will adopt.", "relatedTerms": [ "talaq", "nikah", "mahr", "iddah" ], "sameAs": "https://en.wikipedia.org/wiki/Khula", "url": "https://www.halalwallet.us/glossary/khula" }, { "slug": "mahr", "term": "Mahr", "arabic": "مهر", "pronunciation": "MEHR", "category": "Contracts", "shortDefinition": "The obligatory bridal gift in Islamic marriage — a financial right of the wife, due from the husband.", "definition": "An obligatory financial gift from the husband to the wife in an Islamic marriage, prescribed by the Quran (4:4). The mahr is the wife's exclusive property and may take the form of cash, gold, real estate, or any other agreed-upon asset. It is typically split into two components: the prompt mahr (muqaddam), due at the marriage contract, and the deferred mahr (mu'akhkhar), due on divorce or the husband's death. U.S. courts treat the mahr as an ordinary contractual term and apply state contract law — which is why a vaguely drafted nikah-based mahr is often unenforceable. A properly drafted Islamic prenup documents the mahr in specific dollar amounts and execution-compliant language.", "relatedTerms": [ "nikah", "iddah", "khula", "talaq", "faraid", "nafaqah", "walima" ], "sameAs": "https://en.wikipedia.org/wiki/Mahr", "url": "https://www.halalwallet.us/glossary/mahr" }, { "slug": "maqasid-al-shariah", "term": "Maqasid al-Shariah", "arabic": "مقاصد الشريعة", "pronunciation": "mah-KAH-sid ash-shah-REE-ah", "category": "Governance", "shortDefinition": "The higher objectives of Islamic law — preservation of faith, life, intellect, lineage, and wealth.", "definition": "The higher objectives and purposes of Islamic law. Scholars identify five essential objectives (daruriyyat) that Shariah seeks to protect: (1) faith (din), (2) life (nafs), (3) intellect (aql), (4) lineage/family (nasl), and (5) wealth (mal). In Islamic finance, maqasid al-Shariah provides a framework for evaluating whether financial products and practices serve genuine economic and social benefit, beyond merely checking technical compliance with contract rules. A product that is technically Shariah-compliant but exploitative may still fail the maqasid test.", "relatedTerms": [ "shariah", "fiqh-al-muamalat", "falah" ], "sameAs": "https://en.wikipedia.org/wiki/Maqasid", "url": "https://www.halalwallet.us/glossary/maqasid-al-shariah" }, { "slug": "maslaha", "term": "Maslaha", "arabic": "مَصْلَحَة", "pronunciation": "MAS-la-ha", "category": "General", "shortDefinition": "Public benefit or general welfare — a foundational principle scholars use to derive rulings when texts don't directly apply.", "definition": "Literally \"benefit\" or \"common good.\" One of the secondary sources of Islamic law, used to derive rulings when there is no explicit Quranic verse or hadith governing a contemporary issue. The principle is most associated with the Maliki school and Imam al-Ghazali. It rests on the framework of maqasid al-shariah — the higher objectives of Islamic law (preservation of religion, life, intellect, lineage, and wealth). Maslaha is the principle scholars invoke when permitting practices such as autopsies (when required by law or for medical education), organ donation, and other modern issues with no direct textual ruling.", "relatedTerms": [ "fiqh-al-aqalliyyat", "ijtihad", "fiqh" ], "sameAs": "https://en.wikipedia.org/wiki/Maslaha", "url": "https://www.halalwallet.us/glossary/maslaha" }, { "slug": "maysir", "term": "Maysir", "arabic": "ميسر", "pronunciation": "MAY-sir", "category": "Prohibitions", "shortDefinition": "Gambling or games of chance — one of the three major prohibitions in Islamic finance.", "definition": "Gambling or games of chance. One of the three major prohibitions in Islamic finance (alongside riba and gharar). Financial transactions that resemble gambling — with speculative, chance-based outcomes rather than genuine economic activity — are considered maysir. This prohibition extends to derivative instruments and speculative trading strategies where the outcome depends primarily on chance rather than productive economic activity. Conventional insurance is also considered by many scholars to contain elements of maysir.", "relatedTerms": [ "gharar", "riba", "haram", "takaful" ], "sameAs": "https://en.wikipedia.org/wiki/Maisir", "url": "https://www.halalwallet.us/glossary/maysir" }, { "slug": "mirath", "term": "Mirath", "arabic": "ميراث", "pronunciation": "mee-RAHTH", "category": "Estate Planning", "shortDefinition": "Islamic inheritance — the transfer of wealth from a deceased Muslim to rightful heirs according to Shariah.", "definition": "The Islamic system of inheritance and the transfer of wealth from a deceased Muslim to their rightful heirs. Mirath is governed by detailed Quranic rules (see Faraid) that prescribe fixed shares for specific relatives. A Muslim may only bequeath up to one-third of their estate outside the fixed shares (via wasiyyah). The remaining two-thirds must be distributed according to the Faraid system. In the U.S., Muslims typically need an Islamic will to ensure their estate is distributed according to mirath rules, as state intestacy laws follow different distribution formulas.", "relatedTerms": [ "faraid", "wasiyyah", "waqf" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/mirath" }, { "slug": "mudarabah", "term": "Mudarabah", "arabic": "مضاربة", "pronunciation": "moo-DAH-rah-bah", "category": "Financing Structures", "shortDefinition": "A profit-sharing partnership where one party provides capital and the other provides expertise.", "definition": "A profit-sharing partnership where one party (Rab al-Maal) provides capital and the other (Mudarib) provides expertise and management. Profits are shared according to a pre-agreed ratio — for example, 60/40 or 70/30. Financial losses are borne entirely by the capital provider unless caused by the manager's negligence or breach of contract terms. The mudarib's loss is limited to their time and effort. Mudarabah is used in Islamic banking for investment accounts, mutual funds, and some business financing arrangements. It is one of the two foundational partnership structures in Islamic finance (alongside Musharakah).", "relatedTerms": [ "musharakah", "rab-al-maal", "mudarib" ], "sameAs": "https://en.wikipedia.org/wiki/Mudarabah", "url": "https://www.halalwallet.us/glossary/mudarabah" }, { "slug": "mudarib", "term": "Mudarib", "arabic": "مضارب", "pronunciation": "moo-DAH-rib", "category": "Roles", "shortDefinition": "The managing partner in a Mudarabah — provides expertise and labor rather than capital.", "definition": "The managing partner or entrepreneur in a Mudarabah partnership. The mudarib contributes expertise, time, and management skill rather than capital. They are responsible for making investment decisions and managing the enterprise. The mudarib receives their agreed share of profits as compensation. If the venture incurs losses (not due to negligence), the mudarib loses only their effort and time, not financial capital. In Islamic banking, the bank typically acts as mudarib when managing investment deposits.", "relatedTerms": [ "mudarabah", "rab-al-maal" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/mudarib" }, { "slug": "murabaha", "term": "Murabaha", "arabic": "مرابحة", "pronunciation": "moo-RAH-bah-hah", "category": "Financing Structures", "shortDefinition": "A cost-plus sale where the seller discloses the original cost and adds a transparent, agreed-upon markup.", "definition": "A cost-plus sale. The seller purchases an asset and resells it to the buyer at a disclosed, agreed-upon markup. The buyer pays the total amount in installments. The price, markup amount, and payment schedule are fixed and transparent at the time of the contract — the buyer knows exactly what they are paying and why. The key difference from a conventional loan is that the financier takes actual ownership of the asset (however briefly) before selling it, creating a genuine sale transaction rather than a debt relationship. Commonly used for home financing, auto financing, business equipment purchases, and commodity financing.", "relatedTerms": [ "commodity-murabaha", "bay", "ijara", "halal-mortgage" ], "sameAs": "https://en.wikipedia.org/wiki/Murabaha", "url": "https://www.halalwallet.us/glossary/murabaha" }, { "slug": "musawamah", "term": "Musawamah", "arabic": "مساومة", "pronunciation": "moo-sah-WAH-mah", "category": "Contracts", "shortDefinition": "A negotiated sale where the seller is not required to disclose the original cost or profit margin.", "definition": "A negotiated sale where the seller is not obligated to disclose the original cost or profit margin. Unlike Murabaha (where the cost and markup must be transparent), in Musawamah the buyer and seller negotiate and agree on a final price through bargaining. It is the most common type of everyday commercial transaction. In Islamic finance, Musawamah can be used when cost-plus transparency is not required or practical.", "relatedTerms": [ "murabaha", "bay" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/musawamah" }, { "slug": "musharakah", "term": "Musharakah", "arabic": "مشاركة", "pronunciation": "moo-SHAH-rah-kah", "category": "Financing Structures", "shortDefinition": "A joint partnership where all parties contribute capital and share profits and losses proportionally.", "definition": "A joint partnership where all parties contribute capital and share profits and losses proportionally. In its most common U.S. form — Musharakah Mutanaqisah (diminishing partnership) — the buyer gradually purchases the provider's share of a property over time while paying rent on the provider's portion. Unlike Mudarabah (where only one party provides capital), all musharakah partners contribute financially and share risk. Profits can be distributed in any agreed ratio, but losses must be shared proportional to capital contribution. This is one of the two foundational partnership structures in Islamic finance.", "relatedTerms": [ "musharakah-mutanaqisah", "diminishing-partnership", "mudarabah" ], "sameAs": "https://en.wikipedia.org/wiki/Musharakah", "url": "https://www.halalwallet.us/glossary/musharakah" }, { "slug": "musharakah-mutanaqisah", "term": "Musharakah Mutanaqisah", "arabic": "مشاركة متناقصة", "pronunciation": "moo-SHAH-rah-kah moo-tah-NAH-ki-sah", "category": "Financing Structures", "shortDefinition": "Diminishing partnership — the most widely used halal mortgage structure in the United States.", "definition": "Diminishing partnership. A form of Musharakah where one partner's share decreases over time as the other partner buys it out. This is the most common halal mortgage structure in the United States, used by Guidance Residential (the largest U.S. halal mortgage provider) and UIF Corporation. The buyer and provider co-purchase the property; the buyer's ownership percentage increases with each payment until they own 100%. Monthly payments typically consist of two components: (1) a payment that increases the buyer's equity stake, and (2) a rental payment for the provider's share of the property. Because the arrangement is structured as a partnership (not a loan), there is no interest (riba) involved.", "relatedTerms": [ "musharakah", "diminishing-partnership", "ijara", "halal-mortgage" ], "sameAs": "https://en.wikipedia.org/wiki/Diminishing_musharakah", "url": "https://www.halalwallet.us/glossary/musharakah-mutanaqisah" }, { "slug": "mutah-gift", "term": "Mut'ah (consolatory gift)", "arabic": "متعة الطلاق", "pronunciation": "MUT-ah", "category": "Contracts", "shortDefinition": "A consolatory gift a husband gives a divorced wife in Islam, distinct from temporary marriage.", "definition": "In the context of divorce, mut'ah (mut'at al-talaq) is a consolatory or parting gift a husband gives his divorced wife, referenced in the Quran (2:236, 2:241: \"And for divorced women is a provision according to what is acceptable - a duty upon the righteous\"). Its purpose is to ease the financial and emotional impact of divorce, especially where a marriage ends before consummation or before a mahr was fixed. This should not be confused with the separate, contested concept of mut'ah (temporary marriage), which the Sunni schools regard as prohibited. As a divorce provision, the consolatory mut'ah can be documented alongside mahr and iddah maintenance in an Islamic prenup.", "relatedTerms": [ "mahr", "iddah", "talaq", "nikah" ], "sameAs": "https://en.wikipedia.org/wiki/Mahr", "url": "https://www.halalwallet.us/glossary/mutah-gift" }, { "slug": "nafaqah", "term": "Nafaqah", "arabic": "نفقة", "pronunciation": "nah-fah-KAH", "category": "Contracts", "shortDefinition": "The husband's Islamic obligation to financially maintain his wife and household.", "definition": "The financial maintenance a husband is obligated to provide for his wife and children in Islam — housing, food, clothing, and reasonable needs. Nafaqah is owed regardless of the wife's own wealth: even a wealthy or high-earning wife retains the right to be maintained by her husband, because in Islam each spouse independently owns their property (separation of property) while the duty to provide rests on the husband. This asymmetry of financial obligation is one reason Faraid assigns a son twice a daughter's residuary share. Nafaqah continues for the wife during the iddah period after divorce. It is a claimable right, not optional charity.", "relatedTerms": [ "mahr", "nikah", "iddah", "faraid" ], "sameAs": "https://en.wikipedia.org/wiki/Nafaqa", "url": "https://www.halalwallet.us/glossary/nafaqah" }, { "slug": "nikah", "term": "Nikah", "arabic": "نكاح", "pronunciation": "nih-KAH", "category": "Contracts", "shortDefinition": "The Islamic marriage contract — verbal or written, requiring offer, acceptance, and witnesses.", "definition": "The Islamic marriage contract. Validity requires offer (ijab) and acceptance (qabul) between the bride (or her wali) and the groom, witnessed by at least two Muslim witnesses, and inclusion of a mahr. The nikah may be verbal or written, but written documentation is considered best practice. In the United States, the nikah establishes the religious marriage but is generally not sufficient on its own to function as a legally enforceable U.S. premarital agreement — that role is typically played by a separate Islamic prenup drafted to satisfy state contract law.", "relatedTerms": [ "mahr", "wali", "khula", "talaq", "walima", "kafaa" ], "sameAs": "https://en.wikipedia.org/wiki/Nikah", "url": "https://www.halalwallet.us/glossary/nikah" }, { "slug": "nisab", "term": "Nisab", "arabic": "نصاب", "pronunciation": "nih-SAHB", "category": "Zakat", "shortDefinition": "The minimum wealth threshold above which zakat becomes obligatory — equivalent to 85 grams of gold or 595 grams of silver.", "definition": "The minimum threshold of wealth that makes Zakat obligatory. Equivalent to the value of 85 grams of gold or 595 grams of silver (whichever is lower). A Muslim whose total qualifying wealth exceeds the Nisab for one full lunar year (Hawl) must pay Zakat at a rate of 2.5%. The Nisab value fluctuates with gold and silver market prices. As of 2026, the gold Nisab is typically between $5,000–$7,000 USD, while the silver Nisab is considerably lower. Most scholars recommend using the silver standard to include more people in the obligation of giving.", "relatedTerms": [ "zakat", "hawl", "zakat-al-fitr" ], "sameAs": "https://en.wikipedia.org/wiki/Nisab", "url": "https://www.halalwallet.us/glossary/nisab" }, { "slug": "postnuptial-agreement", "term": "Postnuptial Agreement", "arabic": null, "pronunciation": "post-NUP-shul a-GREE-ment", "category": "Contracts", "shortDefinition": "A marital contract signed after the wedding — useful when a prenup was not executed in time.", "definition": "A written contract between spouses entered into after the wedding (in contrast to a prenup, which is signed before). Postnups can address the same issues as prenups — mahr documentation, separation of property, elective-share waiver, and Islamic arbitration — but receive heavier scrutiny in most U.S. courts because the fiduciary relationship between spouses can raise concerns about coercion. Some states (Ohio is a notable example) historically refused to enforce postnups at all. For Muslim couples who married without a prenup, a postnup is the best available document to retrofit mahr enforceability and Faraid protection — though it must be drafted carefully and with full mutual disclosure.", "relatedTerms": [ "nikah", "mahr", "elective-share" ], "sameAs": "https://en.wikipedia.org/wiki/Postnuptial_agreement", "url": "https://www.halalwallet.us/glossary/postnuptial-agreement" }, { "slug": "power-of-attorney", "term": "Power of Attorney (POA)", "arabic": null, "pronunciation": "POW-er of at-TOR-nee", "category": "Estate Planning", "shortDefinition": "A legal document granting another person authority to act on your behalf for financial, legal, or property matters.", "definition": "A legal document by which one person (the principal) authorizes another (the agent or attorney-in-fact) to act on their behalf for financial, legal, or property matters. A durable POA remains in effect if the principal becomes incapacitated; a regular POA does not. Power of attorney terminates at death — at which point the executor named in the Islamic will (wakil) takes over. Every standard U.S. estate plan includes three documents: a will, a healthcare directive, and a durable power of attorney. Each is independently necessary; none replaces the others.", "relatedTerms": [ "healthcare-directive", "wasiyyah" ], "sameAs": "https://en.wikipedia.org/wiki/Power_of_attorney", "url": "https://www.halalwallet.us/glossary/power-of-attorney" }, { "slug": "probate", "term": "Probate", "arabic": null, "pronunciation": "PRO-bate", "category": "Estate Planning", "shortDefinition": "The court-supervised process of validating a will and administering the deceased's estate.", "definition": "The court process by which a deceased person's will is validated, debts and taxes paid, and the remainder distributed to heirs. Probate can take months to years, costs typically 3–7% of the estate, and is a matter of public record. Assets held in a properly funded trust (such as the Islamic Family Waqf) avoid probate; assets passing by beneficiary designation (life insurance, 401(k), TOD accounts) and right of survivorship also bypass probate. For Muslim Americans, probate is where unpaid mahr, charitable bequests (wasiyyah up to 1/3), and the elective-share waiver are actually adjudicated — making careful documentation in advance critical.", "relatedTerms": [ "wasiyyah", "intestate", "right-of-survivorship" ], "sameAs": "https://en.wikipedia.org/wiki/Probate", "url": "https://www.halalwallet.us/glossary/probate" }, { "slug": "purification", "term": "Purification", "arabic": "تطهير", "pronunciation": "tat-HEER", "category": "Investment", "shortDefinition": "The practice of donating the haram portion of investment returns (such as interest income) to charity.", "definition": "The process of cleansing investment returns by donating the impermissible (haram) portion to charity. Even Shariah-screened stocks may generate small amounts of interest income or revenue from non-compliant activities. Investors calculate the percentage of impure income and donate that proportion of their returns to charity (without intending it as sadaqah or seeking spiritual reward for that portion). Halal investment platforms and robo-advisors like Wahed Invest often automate purification calculations. AAOIFI and other bodies provide guidelines for calculating the purification ratio.", "relatedTerms": [ "halal-screening", "halal", "zakat" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/purification" }, { "slug": "qard-hasan", "term": "Qard Hasan", "arabic": "قرض حسن", "pronunciation": "KARD HAH-san", "category": "Financing Structures", "shortDefinition": "A benevolent, interest-free loan where only the principal is repaid — the only fully permissible loan in Islam.", "definition": "A benevolent or interest-free loan. The borrower repays only the principal amount with no additional charges or markup. It is considered a charitable act (not a commercial transaction) and is the only type of loan fully permissible in Islam. The lender cannot benefit financially from the arrangement. Some Islamic banks offer qard hasan for current (checking) accounts — the bank treats the deposit as a loan from the customer and may return the exact amount on demand, sometimes offering a voluntary gift (hibah) without any obligation.", "relatedTerms": [ "riba", "hibah", "wadiah" ], "sameAs": "https://en.wikipedia.org/wiki/Qard_al-Hassan", "url": "https://www.halalwallet.us/glossary/qard-hasan" }, { "slug": "rab-al-maal", "term": "Rab al-Maal", "arabic": "رب المال", "pronunciation": "RABB al-MAHL", "category": "Roles", "shortDefinition": "The capital provider in a Mudarabah partnership — provides funds but not management.", "definition": "The capital provider in a Mudarabah partnership. This party provides the funds but does not actively manage the investment. They bear financial losses (unless the loss was caused by the manager's negligence or breach of terms) and share in profits per the agreed ratio. In Islamic banking, depositors in investment accounts act as the rab al-maal, while the bank acts as mudarib (managing partner). The rab al-maal has the right to set broad investment parameters but cannot interfere in day-to-day management decisions.", "relatedTerms": [ "mudarabah", "mudarib" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/rab-al-maal" }, { "slug": "radd", "term": "Radd (Return)", "arabic": "رد", "pronunciation": "RUDD", "category": "Estate Planning", "shortDefinition": "The return of a leftover surplus to the fixed-share heirs when no residuary heir exists.", "definition": "Radd is the mechanism in Islamic inheritance (Faraid) by which a leftover surplus of the estate is returned proportionally to the fixed-share (Qur'anic) heirs when the prescribed shares total less than the whole estate and no residuary heir (ʿasaba) survives to take the balance. For example, a single daughter takes her fixed 1/2, and with no son or other residuary present, the remainder is returned to her (in most schools), increasing her effective share. Where two or more Qur'anic heirs share the surplus, it is reapportioned in proportion to their original shares: a mother (1/6) and one daughter (1/2), with a 1/3 balance and no residuary, end up with 1/4 and 3/4 respectively. By the classical majority opinion the surviving spouse does not share in radd — a contested point, with some authority for including the spouse when no other Qur'anic heir exists. Radd is the counterpart to ʿawl: where ʿawl proportionally reduces shares that exceed the estate, radd distributes a surplus that falls short.", "relatedTerms": [ "faraid", "awl-inheritance", "asaba", "tasib", "ahl-al-faraid", "hajb" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/radd" }, { "slug": "rahmah", "term": "Rahmah", "arabic": "رَحْمَة", "pronunciation": "RAH-mah", "category": "General", "shortDefinition": "Mercy, compassion, and care — the defining Quranic attribute of Allah, central to Islamic ethics.", "definition": "Mercy, compassion, and care. Rahmah is the most repeated attribute of Allah in the Qur'an: every chapter except one opens with \"Bismillah ar-Rahman ar-Rahim\" (\"In the name of Allah, the Most Merciful, the Most Compassionate\"). Islamic scholars invoke rahmah as a foundational principle when reasoning through contemporary issues — most notably the Fiqh Council of North America's 2019 fatwa permitting organ donation, which rested explicitly on rahmah, public benefit (maslaha), and the Qur'anic principle (5:32) that saving one life is as if one has saved all of humanity.", "relatedTerms": [ "maslaha", "sadaqah-jariyah" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/rahmah" }, { "slug": "rahn", "term": "Rahn", "arabic": "رهن", "pronunciation": "RAHN", "category": "Contracts", "shortDefinition": "Collateral or pledge — an asset provided as security for a debt or financial obligation.", "definition": "Collateral or pledge in Islamic finance. An asset provided by a borrower as security for a financial obligation. If the borrower defaults, the creditor can sell the pledged asset to recover the outstanding amount. The key difference from conventional collateral is that the creditor cannot benefit from or use the pledged asset during the pledge period (in most scholarly opinions). Any income generated by the pledged asset belongs to the pledgor. Rahn is commonly used alongside Murabaha and other financing structures to provide security.", "relatedTerms": [ "kafalah", "dhaman", "murabaha" ], "sameAs": "https://en.wikipedia.org/wiki/Rahn_(Islamic_banking)", "url": "https://www.halalwallet.us/glossary/rahn" }, { "slug": "riba", "term": "Riba", "arabic": "ربا", "pronunciation": "RIH-bah", "category": "Prohibitions", "shortDefinition": "Interest or usury — the most strictly prohibited practice in Islamic finance.", "definition": "Interest or usury. One of the most strictly prohibited practices in Islamic finance, condemned in the strongest terms in the Quran (2:275-279). Includes any guaranteed, predetermined return on a loan or deposit regardless of the underlying economic outcome. There are two types: (1) Riba al-Nasiah — interest charged on a loan based on time and amount (the most common form); and (2) Riba al-Fadl — exchanging unequal quantities of the same commodity (e.g., gold for gold in unequal amounts). Conventional mortgages, personal loans, credit card interest, and savings account interest are all forms of riba. The prohibition drives the entire Islamic finance industry, which has developed alternative structures like Murabaha, Musharakah, and Ijara to meet financing needs without interest.", "relatedTerms": [ "halal", "haram", "gharar", "maysir", "murabaha", "ijara" ], "sameAs": "https://en.wikipedia.org/wiki/Riba", "url": "https://www.halalwallet.us/glossary/riba" }, { "slug": "right-of-survivorship", "term": "Right of Survivorship", "arabic": null, "pronunciation": "rite of sur-vie-vor-ship", "category": "Estate Planning", "shortDefinition": "A legal feature where jointly held property automatically passes to the surviving owner — bypassing the will entirely.", "definition": "A legal feature of joint ownership where, on the death of one owner, the property automatically passes to the surviving owner without going through probate. Common examples: a home held as joint tenants with right of survivorship (JTWROS), or a bank account with a named survivor. Because right-of-survivorship transfers happen outside the will, they can unintentionally override an Islamic distribution plan: a home titled JTWROS with a spouse will pass entirely to that spouse regardless of what your Islamic will says. Muslim families should audit how each asset is titled and align it with the Faraid plan before signing the will.", "relatedTerms": [ "probate", "wasiyyah", "faraid" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/right-of-survivorship" }, { "slug": "sadaqah", "term": "Sadaqah", "arabic": "صدقة", "pronunciation": "SAH-dah-kah", "category": "Charitable", "shortDefinition": "Voluntary charitable giving — distinct from obligatory zakat.", "definition": "Voluntary charitable giving in Islam. Unlike Zakat (which is obligatory and calculated at specific rates), Sadaqah is given freely in any amount, at any time, to any deserving cause. Sadaqah can be monetary or non-monetary (including acts of kindness, sharing knowledge, or removing harm from a path). In Islamic finance, Sadaqah is relevant to purification of investment returns — when a portfolio generates haram income, that portion is donated as Sadaqah to cleanse the returns. Waqf (endowment) is considered a form of ongoing Sadaqah (Sadaqah Jariyah).", "relatedTerms": [ "zakat", "waqf", "purification" ], "sameAs": "https://en.wikipedia.org/wiki/Sadaqah", "url": "https://www.halalwallet.us/glossary/sadaqah" }, { "slug": "sadaqah-jariyah", "term": "Sadaqah Jariyah", "arabic": "صَدَقَة جَارِيَة", "pronunciation": "sa-DA-qah jah-REE-yah", "category": "Charitable", "shortDefinition": "\"Continuous charity\" — a charitable act whose reward continues after the giver's death, such as endowing a well, school, or trust.", "definition": "Literally \"flowing\" or \"continuous\" charity. A category of charitable giving whose benefit — and therefore reward to the giver — extends beyond death. The Prophet ź said: \"When a person dies, all of his deeds end except three: a sadaqah jariyah, knowledge that benefits people, or a righteous child who prays for him\" (Sahih Muslim). Classical examples include building a mosque, digging a well, planting trees, or establishing a waqf (charitable trust). In modern estate planning, sadaqah jariyah is typically funded through the one-third bequest (wasiyyah) — the portion of an Islamic will that can be directed to non-heir beneficiaries and charitable causes.", "relatedTerms": [ "sadaqah", "wasiyyah", "waqf", "rahmah" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/sadaqah-jariyah" }, { "slug": "salam", "term": "Salam", "arabic": "سلم", "pronunciation": "sah-LAHM", "category": "Contracts", "shortDefinition": "A forward sale — full payment upfront for goods delivered at a future date.", "definition": "A forward sale contract where the buyer pays the full price in advance for goods to be delivered at a future date. The quality, quantity, and delivery date must be clearly specified at the time of contract. Salam is one of the few exceptions to the general Islamic rule against selling what you do not possess — it was specifically permitted by the Prophet Muhammad (peace be upon him) for agricultural products. In modern Islamic finance, parallel Salam structures (where the bank enters two separate Salam contracts) are used for commodity financing and working capital.", "relatedTerms": [ "istisna", "bay", "murabaha" ], "sameAs": "https://en.wikipedia.org/wiki/Bai%27_Salam", "url": "https://www.halalwallet.us/glossary/salam" }, { "slug": "shariah", "term": "Shariah", "arabic": "شريعة", "pronunciation": "shah-REE-ah", "category": "General", "shortDefinition": "Islamic law derived from the Quran and Sunnah — the foundation of all Islamic financial principles.", "definition": "Islamic law derived from the Quran (holy book) and Sunnah (practices and sayings of Prophet Muhammad, peace be upon him). Governs all aspects of Muslim life including financial transactions, contracts, and business dealings. In finance, Shariah compliance means adhering to principles that prohibit interest (riba), excessive uncertainty (gharar), gambling (maysir), and investment in prohibited industries. Shariah is interpreted and applied by qualified scholars through the disciplines of fiqh (jurisprudence), and financial products are reviewed by Shariah boards to ensure compliance.", "relatedTerms": [ "fiqh-al-muamalat", "fatwa", "shariah-board", "maqasid-al-shariah" ], "sameAs": "https://en.wikipedia.org/wiki/Sharia", "url": "https://www.halalwallet.us/glossary/shariah" }, { "slug": "shariah-board", "term": "Shariah Board", "arabic": "هيئة شرعية", "pronunciation": "HAY-ah SHAH-ree-ah", "category": "Governance", "shortDefinition": "A committee of qualified Islamic scholars that certifies the Shariah compliance of financial products.", "definition": "A committee of qualified Islamic scholars that oversees and certifies the Shariah compliance of financial products and institutions. They review contracts, approve product structures, conduct audits, and provide ongoing supervision. A robust Shariah board is considered essential for institutional credibility. AAOIFI recommends a minimum of three scholars per board. HalalWallet labels providers with 'Formal Board' when they disclose an active Shariah supervisory board. Major U.S. halal finance providers like Guidance Residential and Azzad Asset Management maintain formal Shariah boards with named, credentialed scholars.", "relatedTerms": [ "fatwa", "aaoifi", "shariah" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/shariah-board" }, { "slug": "sukuk", "term": "Sukuk", "arabic": "صكوك", "pronunciation": "soo-KOOK", "category": "Investment", "shortDefinition": "Islamic investment certificates — structured as ownership shares in assets rather than debt obligations.", "definition": "Islamic bonds or certificates. Unlike conventional bonds that represent debt and pay interest, sukuk represent proportional ownership in an underlying asset, project, or investment. Returns are tied to the asset's performance rather than a fixed interest rate. The global sukuk market exceeds $800 billion. Common structures include Ijara Sukuk (backed by lease income), Murabaha Sukuk (backed by trade receivables), and Musharakah Sukuk (backed by partnership equity). Sukuk have been issued by sovereign governments (Malaysia, Saudi Arabia, Indonesia) and corporations. In the U.S., sukuk are accessible through some halal investment funds and ETFs.", "relatedTerms": [ "ijara", "murabaha", "musharakah", "halal-screening" ], "sameAs": "https://en.wikipedia.org/wiki/Sukuk", "url": "https://www.halalwallet.us/glossary/sukuk" }, { "slug": "tasib", "term": "Ta'sib", "arabic": "تَعْصِيب", "pronunciation": "tah-SEEB", "category": "Estate Planning", "shortDefinition": "Residuary inheritance in Islamic law — the heirs who take the balance of the estate after Qur'anic shares are paid.", "definition": "The Islamic doctrine of residuary inheritance. After the Qur'anic heirs (ahl al-fara'id) receive their predetermined shares, any remaining balance is distributed among the residuary heirs (asaba) by ta'sib. Sons and other male agnatic descendants are the primary asaba; daughters can become asaba when they inherit alongside a son (taking half a son's share). Three subtypes are recognized in classical fiqh: ta'sib through self (asaba bi nafsihi), as a derivative of another (asaba bi ghayrihi), and with another (asaba ma'a ghayrihi). Ta'sib is one of the three main inheritance-distribution doctrines, alongside radd and 'awl.", "relatedTerms": [ "faraid", "ahl-al-faraid", "radd", "awl-inheritance", "dhawu-al-arham" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/tasib" }, { "slug": "tabarru", "term": "Tabarru'", "arabic": "تبرع", "pronunciation": "tah-BAR-roo", "category": "Insurance", "shortDefinition": "A voluntary contribution or donation — the foundation of Takaful (Islamic insurance) pooling.", "definition": "A voluntary contribution or donation. In Takaful (Islamic insurance), tabarru' is the mechanism that distinguishes it from conventional insurance. Participants donate a portion of their contributions to a shared pool (tabarru' fund) that is used to pay claims for any participant who suffers a loss. Because the contributions are framed as donations rather than premiums, the element of gharar (uncertainty) in the payout is removed — you are giving to help others, not buying an uncertain promise of coverage.", "relatedTerms": [ "takaful", "sadaqah", "gharar" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/tabarru" }, { "slug": "takaful", "term": "Takaful", "arabic": "تكافل", "pronunciation": "tah-KAH-ful", "category": "Insurance", "shortDefinition": "Islamic cooperative insurance based on mutual assistance and shared risk among participants.", "definition": "Islamic cooperative insurance. Participants contribute to a shared pool (fund) that provides mutual financial protection against loss or damage. Based on principles of cooperation (ta'awun), shared responsibility, and mutual benefit — unlike conventional insurance's transfer-of-risk model. Key differences from conventional insurance: (1) contributions are treated as donations (tabarru') to the common pool; (2) the fund is owned by participants, not the company; (3) surplus is returned to participants or donated to charity; (4) investments are Shariah-compliant. Takaful models include Mudarabah-based (the operator manages the fund for a profit share) and Wakalah-based (the operator manages the fund for a fixed fee).", "relatedTerms": [ "tabarru", "gharar", "maysir", "wakalah" ], "sameAs": "https://en.wikipedia.org/wiki/Takaful", "url": "https://www.halalwallet.us/glossary/takaful" }, { "slug": "talaq", "term": "Talaq", "arabic": "طلاق", "pronunciation": "tah-LAQ", "category": "Contracts", "shortDefinition": "Husband-initiated divorce in Islamic law.", "definition": "Husband-initiated divorce in Islamic law. The classical jurists distinguished between revocable (raj'i) and irrevocable (ba'in) talaq, with detailed procedural rules around timing, the iddah waiting period, and witnesses. In the United States, talaq performed outside a civil divorce proceeding has no automatic legal effect — the marriage remains intact under state law until a civil divorce is granted. A properly drafted Islamic prenup can codify the procedural sequence and financial consequences of talaq (mahr, iddah maintenance, separation of property) in language a state court can enforce.", "relatedTerms": [ "khula", "nikah", "mahr", "iddah" ], "sameAs": "https://en.wikipedia.org/wiki/Talaq", "url": "https://www.halalwallet.us/glossary/talaq" }, { "slug": "tarikah", "term": "Tarikah (Estate)", "arabic": "تركة", "pronunciation": "tah-rih-KAH", "category": "Estate Planning", "shortDefinition": "The estate of a deceased Muslim — all assets left behind, subject to Islamic distribution.", "definition": "The tarikah is the estate of a deceased Muslim — everything of value they leave behind, including cash, property, investments, retirement accounts, and life-insurance proceeds. Before distribution, the tarikah pays (in order) funeral expenses, then debts (including any unpaid mahr), then any bequest up to one-third, with the remainder divided among heirs by Faraid. A common U.S. mistake is forgetting that retirement accounts and life insurance — which pass by beneficiary designation outside probate — are part of the tarikah and subject to the Quranic shares. Aligning beneficiary forms with an Islamic will keeps the whole tarikah within Faraid.", "relatedTerms": [ "faraid", "wasiyyah", "mahr" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/tarikah" }, { "slug": "tawarruq", "term": "Tawarruq", "arabic": "تورق", "pronunciation": "tah-WAR-rook", "category": "Contracts", "shortDefinition": "A monetization arrangement involving the purchase and immediate resale of a commodity to obtain cash.", "definition": "A monetization arrangement where a buyer purchases a commodity on deferred payment terms from a seller, then immediately sells the same commodity to a third party for cash at the current market price. The net effect provides the buyer with immediate cash and a deferred payment obligation to the original seller. Widely used in personal financing and treasury management in Malaysia and the Gulf. Controversial among scholars — AAOIFI's Shariah Board resolved in 2009 that organized tawarruq (where the commodity trading is pre-arranged) is impermissible, while individual tawarruq (where the client independently finds a third-party buyer) may be permitted.", "relatedTerms": [ "bai-al-inah", "commodity-murabaha", "murabaha", "riba" ], "sameAs": "https://en.wikipedia.org/wiki/Tawarruq", "url": "https://www.halalwallet.us/glossary/tawarruq" }, { "slug": "transmutation-agreement", "term": "Transmutation Agreement", "arabic": null, "pronunciation": "trans-mew-TAY-shun a-GREE-ment", "category": "Estate Planning", "shortDefinition": "A written agreement converting marital community property into separate property — used in community-property states to preserve Faraid.", "definition": "A written agreement between spouses in a community-property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin) that re-characterizes existing community property as the separate property of one spouse, or vice versa. Because community-property regimes default to 50/50 ownership of marital assets — directly conflicting with the Islamic separation-of-property principle — a transmutation agreement is often the cleanest way to align ownership with Quranic distribution and the Islamic will. California Family Code § 852, for example, requires transmutation agreements to be in writing and expressly state the change.", "relatedTerms": [ "community-property", "elective-share", "faraid" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/transmutation-agreement" }, { "slug": "ujrah", "term": "Ujrah", "arabic": "أجرة", "pronunciation": "OOJ-rah", "category": "Contracts", "shortDefinition": "A fee or wage charged for services rendered — the Islamic basis for fee-based financial services.", "definition": "A fee, wage, or commission charged for services rendered. Ujrah provides the Islamic legal basis for fee-based financial services that avoid interest. Instead of charging interest on a loan, an Islamic bank may charge a service fee (ujrah) for processing, administration, or advisory work. The fee must be for a genuine service, clearly disclosed, and not disguised interest. Ujrah is commonly used in Wakalah contracts (where an agent charges a fee for managing investments) and in some Takaful models.", "relatedTerms": [ "wakalah", "jualah", "ijara" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/ujrah" }, { "slug": "wadiah", "term": "Wadiah", "arabic": "وديعة", "pronunciation": "wah-DEE-ah", "category": "Banking", "shortDefinition": "Safekeeping or custody — the basis for some Islamic checking and savings accounts.", "definition": "Safekeeping or custody. A deposit arrangement where a financial institution holds funds as a custodian. There are two types: (1) Wadiah Yad Amanah — pure safekeeping where the custodian cannot use the funds and is not liable for loss except through negligence; (2) Wadiah Yad Dhamanah — safekeeping with guarantee, where the custodian may use the funds (with permission) but guarantees the return of the full deposit amount. The latter is used as the basis for some Islamic checking and savings accounts. The bank may offer a voluntary gift (hibah) to depositors but is not obligated to do so.", "relatedTerms": [ "hibah", "qard-hasan", "amana" ], "sameAs": "https://en.wikipedia.org/wiki/Wadi%27ah", "url": "https://www.halalwallet.us/glossary/wadiah" }, { "slug": "wakalah", "term": "Wakalah", "arabic": "وكالة", "pronunciation": "wah-KAH-lah", "category": "Contracts", "shortDefinition": "An agency contract where one party appoints another to act on their behalf for a fee.", "definition": "An agency contract where one party (the principal) appoints another (the agent, or wakil) to conduct transactions or manage investments on their behalf. The agent earns a fee (ujrah) or, in some structures, a share of profit for their services. Wakalah is widely used in Islamic finance for investment management (Wakalah bil-Istithmar), where investors appoint a fund manager as their agent. It is also one of the two main operational models for Takaful — in the Wakalah model, the insurance operator manages the takaful fund for a fixed agency fee rather than a profit share.", "relatedTerms": [ "ujrah", "jualah", "takaful", "mudarabah" ], "sameAs": "https://en.wikipedia.org/wiki/Wakalah", "url": "https://www.halalwallet.us/glossary/wakalah" }, { "slug": "wali", "term": "Wali", "arabic": "ولي", "pronunciation": "WAH-lee", "category": "Contracts", "shortDefinition": "The bride's marriage guardian — typically her father or closest male relative — required for a valid nikah in most madhhabs.", "definition": "The marriage guardian of the bride in Islamic law — typically her father, then her closest adult male agnate relative. The wali represents the bride in the nikah contract negotiations and consents to the marriage on her behalf in the Shafi'i, Maliki, and Hanbali madhhabs. The Hanafi school permits an adult woman to contract her own marriage without a wali, provided the groom is of suitable status (kafa'a). The wali's role is protective — to ensure the bride is not coerced and that the marriage is to her benefit, including a fair mahr.", "relatedTerms": [ "nikah", "mahr", "kafaa" ], "sameAs": "https://en.wikipedia.org/wiki/Wali_(Islam)", "url": "https://www.halalwallet.us/glossary/wali" }, { "slug": "walima", "term": "Walima", "arabic": "وليمة", "pronunciation": "wah-LEE-mah", "category": "Contracts", "shortDefinition": "The marriage feast in Islam — a recommended celebration hosted after the nikah.", "definition": "The wedding feast in Islam, a Sunnah celebration held to announce and celebrate a marriage. The Prophet (peace be upon him) instructed a Companion to hold a walima \"even with one sheep\" (Sahih al-Bukhari 5167), and attending when invited is emphasized. The walima is traditionally hosted by the groom's side, though customs vary by culture. Importantly, the walima is distinct from the mahr: the mahr is the husband's obligatory gift to the wife, while the walima is a recommended celebration. Islam encourages moderation — a simple, debt-free feast is closer to the Sunnah than the lavish, often loan-funded weddings that cultural expectations sometimes impose.", "relatedTerms": [ "nikah", "mahr" ], "sameAs": "https://en.wikipedia.org/wiki/Walima", "url": "https://www.halalwallet.us/glossary/walima" }, { "slug": "waqf", "term": "Waqf", "arabic": "وقف", "pronunciation": "WAHK-f", "category": "Charitable", "shortDefinition": "An Islamic endowment — assets permanently dedicated to a charitable purpose.", "definition": "An Islamic endowment — a charitable trust where assets are donated permanently for a specific purpose (education, healthcare, community benefit). The assets themselves cannot be sold, gifted, or transferred; only the income they generate is used for the designated purpose. Waqf is considered a form of ongoing charity (Sadaqah Jariyah) that continues to benefit others long after the donor's death. Historically, waqf funded mosques, universities, hospitals, and infrastructure across the Islamic world. In the modern U.S. context, waqf can be established as part of an Islamic estate plan.", "relatedTerms": [ "sadaqah", "faraid", "wasiyyah" ], "sameAs": "https://en.wikipedia.org/wiki/Waqf", "url": "https://www.halalwallet.us/glossary/waqf" }, { "slug": "wasiyyah", "term": "Wasiyyah", "arabic": "وصية", "pronunciation": "wah-SEE-yah", "category": "Estate Planning", "shortDefinition": "An Islamic will — allowing a Muslim to bequeath up to one-third of their estate outside the fixed inheritance shares.", "definition": "An Islamic will or bequest. Allows a Muslim to direct up to one-third of their estate to beneficiaries or causes outside the mandatory Faraid (inheritance) shares. The remaining two-thirds must be distributed according to the Quranic rules of inheritance. A wasiyyah cannot be used to give additional shares to those who already receive Faraid-designated portions (unless the other heirs consent). In the U.S., an Islamic will is legally recognized when properly drafted and executed according to state laws. It is strongly recommended for all Muslims in non-Muslim-majority countries to ensure their estate is distributed according to their wishes and Islamic guidelines.", "relatedTerms": [ "faraid", "mirath", "waqf", "tarikah", "asaba" ], "sameAs": "https://en.wikipedia.org/wiki/Wasiyyah", "url": "https://www.halalwallet.us/glossary/wasiyyah" }, { "slug": "wasiyyah-wajibah", "term": "Wasiyyah Wajibah", "arabic": "وَصِيَّة وَاجِبَة", "pronunciation": "wah-SEE-yah WAH-jih-bah", "category": "Estate Planning", "shortDefinition": "The \"obligatory bequest\" — a wasiyyah of up to 1/3 of the estate to grandchildren whose parent predeceased the grandparent, replacing the share that parent would have taken.", "definition": "When a son or daughter predeceases their own parent, the grandchildren are normally blocked from inheriting if a surviving uncle exists. To address the resulting hardship, scholars including Ibn Hazm, Imam Ahmad, Al-Hasan al-Basri, al-Tabari, and Yusuf al-Qaradawi treated a wasiyyah to those grandchildren as obligatory (wajib). Egypt (1946), Pakistan (Muslim Family Law Ordinance 1961, § 4), Morocco, UAE, Tunisia, Kuwait, Syria, and Algeria have codified the obligatory bequest, capping it at 1/3 of the estate. In the U.S., the obligatory bequest must be explicitly written into an Islamic will to take effect.", "relatedTerms": [ "wasiyyah", "faraid", "mirath" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/wasiyyah-wajibah" }, { "slug": "zakat", "term": "Zakat", "arabic": "زكاة", "pronunciation": "zah-KAHT", "category": "Zakat", "shortDefinition": "One of the Five Pillars of Islam — an obligatory annual 2.5% charitable contribution on qualifying wealth.", "definition": "One of the Five Pillars of Islam. An obligatory annual charitable contribution of 2.5% of qualifying wealth above the Nisab threshold. Applies to cash, gold, silver, investments, business assets (inventory and receivables), and other forms of wealth held for one full lunar year (Hawl). Zakat is not a tax or donation — it is a religious obligation and a right of the poor in the wealth of those who are financially able. There are eight categories of eligible Zakat recipients defined in the Quran (9:60). Zakat purifies wealth, promotes social welfare, and reduces inequality. HalalWallet's Zakat Calculator helps U.S. Muslims accurately calculate their annual obligation.", "relatedTerms": [ "nisab", "hawl", "zakat-al-fitr", "sadaqah" ], "sameAs": "https://en.wikipedia.org/wiki/Zakat", "url": "https://www.halalwallet.us/glossary/zakat" }, { "slug": "zakat-al-fitr", "term": "Zakat al-Fitr", "arabic": "زكاة الفطر", "pronunciation": "zah-KAHT al-FIT-r", "category": "Zakat", "shortDefinition": "A special charitable contribution required at the end of Ramadan, paid per person in the household.", "definition": "A special charitable contribution required at the end of Ramadan, before Eid al-Fitr prayers. Unlike regular Zakat (which is wealth-based and annual), Zakat al-Fitr is a fixed amount per person in the household — typically the cost of one meal or approximately $10–$15 per person in the U.S. It must be paid before the Eid prayer to count. The head of household pays for themselves and all dependents. Its purpose is to purify the fasting person from any idle talk or indecent behavior during Ramadan and to ensure the poor can celebrate Eid with dignity.", "relatedTerms": [ "zakat", "nisab", "sadaqah" ], "sameAs": "https://en.wikipedia.org/wiki/Zakat_al-Fitr", "url": "https://www.halalwallet.us/glossary/zakat-al-fitr" }, { "slug": "asaba", "term": "ʿAsaba (Residuary Heirs)", "arabic": "عصبة", "pronunciation": "ah-SAH-bah", "category": "Estate Planning", "shortDefinition": "Residuary heirs in Islamic inheritance who take whatever remains after the fixed-share heirs are paid.", "definition": "In Islamic inheritance (Faraid), the ʿasaba are residuary heirs who do not take a fixed Quranic fraction but inherit whatever remains after the fixed-share heirs (ashab al-furud) receive their portions. The son is the strongest example: he inherits the residue and, alongside daughters, takes twice each daughter's share. Other residuaries include the father (when no male descendant exists), the full brother, and the grandfather. When no fixed-share heir is present, a residuary heir can take the entire estate. An Islamic will is required for these shares to be honored under U.S. probate law.", "relatedTerms": [ "faraid", "wasiyyah", "hajb", "radd" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/asaba" }, { "slug": "awl-inheritance", "term": "ʿAwl (Proportional Reduction)", "arabic": "عول", "pronunciation": "AWL", "category": "Estate Planning", "shortDefinition": "Proportional reduction of inheritance shares when the fixed fractions add up to more than the whole estate.", "definition": "ʿAwl is the adjustment in Islamic inheritance (Faraid) used when the sum of the fixed Quranic shares exceeds the whole estate (more than 1). All shares are scaled down proportionally so they fit within the estate. For example, a husband (1/2) and two full sisters (2/3 combined) together claim 7/6 of the estate; under ʿawl the husband's share is reduced to 3/7 and the sisters' combined share to 4/7. ʿAwl ensures every entitled heir still receives a fair, proportionate portion rather than some heirs being excluded. It is the mirror image of radd (the return of a surplus) and, alongside hajb (blocking), is one of the mechanisms that make Faraid mathematically precise.", "relatedTerms": [ "faraid", "radd", "hajb", "asaba", "tasib", "ahl-al-faraid" ], "sameAs": null, "url": "https://www.halalwallet.us/glossary/awl-inheritance" } ], "totalRecords": 97 }