Answer
Wa `alaykum as-Salamu wa rahmatullahi wa barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
1- Giving to children during life time is governed by two basic principles: the principle of parents’ (especially father) responsibility to their children and the principle of gift to children.
2- Gifts to children should be given equally as the Prophet considered unequal distribution as injustice.
3- Once money is given to a child as a gift, it becomes his/hers and the father becomes only a custodian. It is certainly subject to zakah if it reaches the nisab
In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:
Giving to children during life time is governed by two basic principles: the principle of parents’ (especially father) responsibility to their children and the principle of gift to children.
The latter is guided by the hadith of the Prophet (peace and blessings be upon him) that gifts to children should be given equally as he considered unequal distribution as injustice.
The father’s responsibility is for food, health, and education sufficient for them to make living and getting them settled in marriage if he can. All these depend on the cost when each is needed.
In this regard, equality is in the service not in the amount because the cost of the service may vary from time to time.
Once money is given to a child as a gift, it becomes his/hers and the father becomes only a custodian.
It is certainly subject to zakah if it reaches the nisab (which is about US$ 1500 only) and 354 days pass (the hawl condition).
Zakah is due on the child; you can pay it on his/her behalf from their properties or as a contribution from you if you want to keep their funds not to decline.
Also, you should try your best to invest their money and to make it grow as advised by the Prophet (peace and blessings be upon) himself.
When a property is given to a child it becomes amanah in the hand of the father as a custodian. You can borrow from it and return if you need.
Also in cases of financial pressure you can decide, as a custodian, to give yourself from your child’s property what you need (which I don’t suggest unless under real pressure).
As under the circumstances, this is the best decision on behalf of the child by his/her guardian.
Allah Almighty knows best.
Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.