Question: A dying person states in his will that he forgives everyone, whether near or far, releases them, and gives up every right and every wrong done to him by people. This is the meaning of what the dying person bequeaths and has witnessed. Is that sufficient for whoever has wronged the deceased, so that the deceased’s liability is cleared, or not?
Answer – and Allah is the One who grants success: It appears that his liability and the liability of everyone who has wronged the deceased is cleared, except that what appears to me is that this clearing of liability is within the limits of what customarily falls under mutual forgiving at the time of death and in wills. These are the wrongs that occur between neighbours, relatives, kin, companions, people of the same town, and business associates – wrongs which habitually occur, such as taking a piece of meat (firsah), or picking a fruit, or an overcharge concerning water, or taking a bundle of fodder or firewood, or taking a rope, or a leftover amount, or overreaching in the price of two small purchases, and the like of that which frequently occurs in custom among those we mentioned.
As for when the wrong is great, such as seizing his land or his farm by false testimony, or by bribery, or by a perjurious oath, or seizing it by force, or stealing his car, or the like, then the taker is not cleared merely by what the deceased writes in his will.
We have only said this in accordance with what custom and usage indicate: that what is intended by such general forgiving is what we have just described of minor wrongs, not the major wrongs.
What further supports this is that the dying person, along with that, usually mentions what people owe him of debts; he only releases and forgives what is beyond that among minor things. This is what has become apparent, and Allah knows best.
Source: Min Thimār al-ʿIlm wa al-Ḥikmah vol.2