The longevity and sustainability of Islamic family businesses (IFBs) are perpetually challenged by the complexities inherent in succession planning, a critical issue exacerbated by the mandatory distribution rules of Faraid (Islamic inheritance law). The strict application of Faraid post-mortem often results in the fragmentation of business assets and ownership among numerous heirs, which can destabilize the enterprise and threaten its long-term viability. This paper addresses this crucial challenge by investigating the strategic role of Hibah (inter vivos gift) as a proactive, Shariah-compliant instrument for wealth transfer and ensuring business continuity within IFBs. The core of the analysis centers on the inherent flexibility of Hibah, particularly in its contemporary and sophisticated form known as Hibah Amanah (Trust Hibah). This mechanism empowers Muslim business owners to strategically transfer assets, including crucial business shares, real property, and other capital, to designated, preferred heirs during their lifetime. By executing this transfer, the gifted assets are effectively removed from the estate subject to Faraid upon the owner's death, thereby mitigating the risk of fragmentation and preserving the integrity of the business structure. The study adopts a comparative legal and practical approach, examining the implementation of Hibah in key jurisdictions such as Malaysia and Indonesia. These contexts demonstrate a growing utilization of Hibah strategies to pre-emptively resolve potential inheritance-related family conflicts and facilitate a seamless transition of both management control and ownership. Furthermore, the research critically analyses the jurisprudential evolution of Hibah, tracing its foundations in classical Islamic jurisprudence (Fiqh) and its subsequent adaptation by contemporary Islamic scholars to address the complexities of modern corporate and business structures. The findings underscore that a meticulously structured Hibah strategy transcends a mere estate planning tool. It emerges as a vital mechanism for strategic business succession, offering a robust and religiously sanctioned pathway to reconcile the sacred religious obligations of inheritance with the economic imperative of enterprise sustainability and the preservation of the family's legacy across multiple generations.
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