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Actions of Agent must be in Favor of Principal

Answered according to Shafi'i Fiqh by Darul Iftaa Jordan
My father has granted me power of attorney to manage his funds. Is it permissible that I give a loan from his money, even a son/daughter of his? If I did so, is that loan a debt on him/her or part of their share in the inheritance? Is it permissible that I sell some of his property and distribute the money amongst some of the heirs? This is knowing that he is having health issues undermining his capacity.

Answer:

Praise be to Allah the Lord of the Worlds.

Wakala refers to a contract where a principal (Muwakkil) authorizes or appoints an agent (Wakeel) to do a well-defined legal action on his or her behalf. The actions of the agent must be in favor of the principal because the former is an entrusted person. An-Nawai says, "Wakala has the same ruling as a deposited in trust."{Rawadat At-Talibeen, 4/325}. In conclusion, the agent`s actions must be in the best interest of the principal. Therefore, he may not give loans or gifts, even to the children of the principal himself, and if he did, then his actions are invalid because they harm the principal. Moreover, it is forbidden that he gifts the principal`s money to others, even his children since inheritance is divided after the death of the testator. In case the principal lacked capacity or it was deficient, then the power of attorney is invalid because perfect capacity is a condition for the validity of the latter. And Allah the Almighty knows best.

This answer was collected from the official government Iftaa Department of Jordan.

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