Praises and glorifications be to Allah the most Gracious and most the Merciful. May the peace and blessings of Allah be upon the prophet of mercy and guidance; the Prophet Muhammad, his family and all companions.
An individual under the concept of Islam has the right to own property and to dispose it as and when he pleases without going beyond certain boundaries of Islam. He must not be extravagant nor miser. Islam allows one to do good and charitable acts with his property such as donating to the poor, orphans and the needy, through either gift or will. This is however voluntary in Islam besides the obligatory poor due known as zakat.
The voluntary transfer of one’s property to another person by name is called a gift deed. A gift deed is drawn during the lifetime of the donor. If the donor dies before the gift deed is accepted then, the gift deed becomes void. It is important that the property one is donating as gift is lawfully earned by one.
A will on the other hand is the legal declaration in which a person drawing the will can name one or any number of persons as beneficiary of his various assets including property and funds. Will comes into play only after the death of the testator. Basically, a gift differs from a Will in the following various:
1-a gift is donated and received whiles the donor is still alive, whilst in the case of a Will, it only comes into enforcement after the death of the testator (donor)
2-it is not allowed to make a will more than one third 1/3 of one’s entire property but for gift, it is allowed to give out ones whole wealth.
In the Islamic law the power of the testator is limited in two ways:
Firstly, he cannot bequest more than 1/3 of his net estate unless the other heirs consent to the bequest or there are no legal heirs at all or the only legal heir is the spouse who gets his/her legal share and the residue can be bequeathed as can be deduced from the hadith of Sa‘d ibn Abi Waqqas (may Allah be please with him): "I was stricken by an ailment that led me to the verge of death. The Prophet came to pay me a visit. I said, "O Allah's Apostle! I have much property and no heir except my single daughter. Shall I give two-thirds of my property in charity?" He said, "No." I said, "Half of it?" He said, "No." I said, "One-third of it?" He said, "You may do so, though one-third is also too much, for it is better for you to leave your offspring wealthy than to leave them poor, asking others for help..." (Sahih al-Bukhari, Sahih Muslim, Muwatta, Tirmidhi, Abu Dawud and Ibn Majah.)
Secondly, the testator cannot make a bequest in favor of a legal heir under the Islamic law.