Ruling on giving everything one owns in charity
Question

                What is the ruling on giving all that one owns in charity?
Praise be to Allah.
    The scholars of the four madhhabs are agreed that it is 
    mustahabb for charity to be composed of whatever is surplus to one’s needs 
    and the needs of those for whom one is responsible. If a person gives in 
    charity that which affects his needs or the needs of those for whom he is 
    responsible, that is a sin, because his spending on them is obligatory and 
    it is not permissible to give precedence to a naafil (supererogatory) action 
    over an obligatory one.  

    But with regard to whatever is surplus to the needs of those 
    on whom a person is obliged to spend, the majority of scholars say that 
    holding on to whatever wealth he needs is preferable to giving it all away 
    in charity, unless he has an income or is sure that he will be able to put 
    his trust in Allaah and be patient and steadfast in bearing poverty and will 
    be able to refrain from begging. Some scholars regarded it as mustahabb to 
    give all his wealth in that case. The Shaafa’is regard this as being the 
    most correct view, and it is the apparent meaning of al-Muwaffaq’s words in
    al-Mughni. What may be understood from the Maaliki and Hanafi 
    madhhabs is that they do not regard that as mustahabb, because after 
    mentioning the above conditions concerning the permissibility of giving all 
    one's wealth in charity, they say, “There is noting wrong with that,” as if 
    the matter is permissible in their view. But some Maalikis add to that a 
    comment which may be understood as meaning that they regard it as mustahabb, 
    as they say, “The way of encouraging giving all one's wealth in charity is 
    that the donor should feel good about it after giving all his wealth and 
    should not feel regret about being without wealth or hope to gain a similar 
    amount of wealth in the future. He should not have any need of it in the 
    future for himself or for those on whom he is obliged or encouraged to 
    spend. Otherwise it is not recommended for him (to give all his wealth in 
    charity), rather it is haraam for him to do so if those on whom he is 
    obliged to spend are in certain need, or it is makrooh for him to do so if 
    he is certain that those on whom it is recommended for him to spend are in 
    need, because it is better to give in charity that which is surplus to his 
    needs and the needs of those on whom he is obliged to spend.”

    (al-Mawsoo’ah al-Fiqhiyyah, 26/339) 
From these comments it is 
    clear that the scholars did not limit charity to one third (of one's 
    wealth). The evidence from the Qur’aan and Sunnah that these scholars based 
    their views on is as follows: 

    1 – The aayah (interpretation of the meaning): 

    “And let not your hand be tied (like a miser) to your 
    neck, nor stretch it forth to its utmost reach (like a spendthrift), so that 
    you become blameworthy and in severe poverty”

    [al-Isra’ 17:29]
The mufassireen said, in 
    their commentaries on this aayah: Do not give all that you have when you and 
    your dependents are in need of it, so that you are left with no money to 
    spend, like an exhausted camel, i.e., one which has lost its strength and 
    has no energy. And it was said that it means, lest you be blamed and come to 
    regret it. But the one who is being addressed here is not the Prophet  
    (peace and blessings of Allaah be upon him), because he is not one of those 
    who would regret spending what they had in their hands for the sake of 
    Allaah. Rather Allaah forbade extravagance in spending and giving all the 
    money that one has in hand, less that end in regret on the part of the one 
    who spent all that he had.

    (al-Mawsoo’ah 4/184) 

    2 – It was narrated that Ka’b ibn Maalik (may Allaah be 
    pleased with him) said: “I said, ‘O Messenger of Allaah, as a sign of my 
    repentance I will give away some of my wealth in charity to Allaah and His 
    Messenger.’ The Messenger of Allaah  (peace and blessings of Allaah be 
    upon him) said: ‘Keep some of your wealth for yourself, that will be better 
    for you.’” (al-Bukhaari, 2552; Muslim, 4973). 

    The Prophet  (peace and blessings of Allaah be upon him) 
    did not specify that he should give one-third in charity.

     Al-Shawkaani (may Allaah have mercy on him) said: “The 
    hadeeth of Ka’b indicates that it is prescribed for the one who wants to 
    give all his wealth in charity to keep some of it. That does not imply that 
    if he wanted to go ahead with it, he would not be able to do so. It was said 
    that giving all one's wealth in charity varies according to one's situation. 
    If a person is strong and knows that he will be able to bear the 
    consequences with patience, then there is no reason why he should not do 
    that.  Based on that we may interpret the action of Abu Bakr al-Sideeq and 
    the way in which the Ansaar preferred others to themselves even though they 
    were in need of that [cf. al-Hashr 59:9]. But if a person is not like that, 
    then he should not do that. This is how the words “There is no charity 
    except when one has the means” should be interpreted. According to another 
    report, “The best of charity is that which is given when one has the means.”

    (al-Nayl 8/288)

     3 – It was narrated that Anas ibn Maalik (may Allaah be 
    pleased with him) said: Abu Talhah was the richest man among the Ansaar in 
    Madeenah in terms of date palm trees, and the most beloved of his wealth to 
    him was the garden of Bayruha’. It was opposite the Mosque and the Messenger 
    of Allaah  (peace and blessings of Allaah be upon him) used to go there 
    and drink its water, which was good.”

     Anas added: “When the aayah (interpretation of the meaning) 
    –  

    ‘By no means shall you attain Al-Birr (piety, 
    righteousness — here it means Allaah’s reward, i.e. Paradise), unless you 
    spend (in Allaah’s Cause) of that which you love’

    [Aal ‘Imraan 3:92] – 

    was revealed, Abu Talhah stood up and went to the Messenger 
    of Allaah  (peace and blessings of Allaah be upon him), and said: ‘O 
    Messenger of Allaah, Allaah says, “By no means 
    shall you attain Al-Birr (piety, righteousness — here it means Allaah’s 
    reward, i.e. Paradise), unless you spend (in Allaah’s Cause) of that which 
    you love…” The most beloved of my wealth to me is 
    the garden of Bayruha’, and I am giving it in charity to Allaah, hoping to 
    find reward for that with Allaah. So dispose of it, O Messenger of Allaah, 
    as Allaah shows you.’ The Messenger of Allaah  (peace and blessings of 
    Allaah be upon him) said: ‘Bravo! That is a good deal, that is a good deal. 
    I have heard what you said and I think that you should give it to your 
    relatives.’ Abu Talhah said, ‘I will do that, O Messenger of Allaah.’ So Abu 
    Talhah shared it out among his relatives and cousins (sons of his paternal 
    uncles).”

    (al-Bukhaari, 1368; Muslim, 1664)

     Al-Shawkaani (may Allaah have mercy on him) said (al-Nayl, 
    3/36):

     “This indicates that it is permissible to give more than one 
    third of one’s wealth in charity when one is alive and not suffering from 
    terminal illness, because the Prophet  (peace and blessings of Allaah be 
    upon him) did not ask Abu Talhah how much he wanted to give in charity, but 
    he said to Sa’d ibn Abi Waqqaas when he was sick, “A third is a lot.”.