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Hawaii Wills and Trust Requirements

When deciding between a will or trust in Hawaii or making other estate planning decisions in this state, it is important to understand the key differences between these two primary different estate planning tools and the general rules regarding estate documents.

Statutory Authority

Wills: Hawaii Uniform Probate Code (Haw. Rev. Stat., Ch. 560), Art. II – Intestate Succession and Wills (Haw. Rev. Stat. §§560:2-101, et. seq.).

Trusts: Haw. Rev. Stat., Title 30 – Guardians and Trustees, Ch. 554 – Trusts and Trustees (Haw. Rev. Stat. §§554-1, et. seq.). Hawaii Uniform Trust Code, effective Jan. 1, 2022.

Hawaii Will Requirements

To form a valid will in Hawaii, a testator must be at least 18 years old and “of sound mind.”  Hawaii wills must be in writing and must be signed by the testator (or on the testator’s behalf by another person signing at the testator’s direction while in the testator’s conscious presence).

Two witnesses must also sign a Hawaii will.  Witnesses must sign within a reasonable time after observing the testator sign the will or acknowledge that the testator’s signature and will are genuine.  Any person generally competent to act as a witness may be a witness to a will. An interested witness—that is, a witness with a beneficial interest in the will—does not invalidate a Hawaii will or any provision within the will.

In Hawaii, a written document that does not formally satisfy all requirements for a Hawaii will may nonetheless be treated as a valid will if a proponent of the document can establish by clear and convincing evidence that the deceased person intended for the document to be treated as the decedent’s will (or as a revocation, alteration, or revival of an existing will).

Hawaii does not require notarization of wills. However, a Hawaii will can be made “self-proved” through execution of a compliant affidavit by the testator and witnesses. A self-proved affidavit attests that the testator signed the document willingly, voluntarily, with the intent that it be a will, and while the testator had adequate capacity and was not under constraint or undue influence. Witness testimony is unnecessary for admission of a will in probate if the will is accompanied by a self-proved affidavit. The Hawaii Legislature publishes a model self-proved affidavit within Haw. Rev. Stat. §560:2-504.

Hawaii law allows a testator to incorporate within a will by reference other written documents in existence when the will is executed. The will must clearly express the intent to incorporate the other document, and the incorporated document must be sufficiently described in the will to allow identification.

Hawaii explicitly recognizes a testator’s right to incorporate by reference a written statement or list—often called a memorandum of personal property—making dispositions of specific items of tangible personal property.  A testator cannot distribute real estate or money using a memorandum of personal property. To be effective, a memorandum must be signed by the testator and referenced in the will, and it must describe the disposed items and intended recipients with reasonable certainty. The written document may be created before or after execution of the will, altered after its initial creation, and need not have significance beyond its dispositions under the will.

Amendment, Revision, and Revocation of Hawaii Wills

Amendment of a Hawaii will can be accomplished through a codicil (a later-executed addendum to an existing will) or execution of a new will that includes the desired amendments.  In either case, the new will or codicil must satisfy all formalities required for a Hawaii will.

A Hawaii will can be revoked if the testator—or another person at the testator’s request in the testator’s presence—performs a “revocatory act” with the intent to revoke the will.  Revocatory acts include burning, tearing, or cancelling the will.

A Hawaii will be can also be revoked through execution of a later will that revokes the prior will either expressly or by inconsistency.  A later will expressly revokes a prior will if the later will clearly states the testator’s intention to revoke the earlier will. A later will is considered to revoke a prior will by inconsistency if the later will disposes of substantially all of the testator’s estate. A later will that does not completely dispose of the testator’s estate is presumed to have been intended as a supplement to the earlier will—with the later-executed will controlling in the event of any conflicting provisions.

If, after executing a will, a Hawaii testator is divorced, any provisions in the will in favor of the former spouse are deemed to have been revoked unless the will, a court order, or a property settlement agreement between the former spouses expressly states otherwise. Hawaii’s rule regarding revocation due to divorce also applies to revocable trusts, insurance and annuity policies, and comparable beneficiary designations in favor of a former spouse.

If a Hawaii testator marries after execution of a will, the surviving spouse inherits the same share of the estate he or she would have inherited had the testator died intestate—adjusted for any distributions to children of the testator born before the marriage and who are not children of the surviving spouse.  A later-wed spouse’s share is inapplicable if the will was made in contemplation of the marriage, the testator intended the will to apply notwithstanding the marriage, or the testator made other provisions for the surviving spouse intended in lieu of provisions under a will.

If a child is born to or adopted by a testator after execution of a Hawaii will, the child may be entitled to a share of the estate.  If the testator had no children when making the will, an after-born child receives a share equal to what the child would have inherited had the testator died intestate—unless the testator devised substantially all of the estate to the omitted child’s other parent. If the testator has other children provided for under the will, the after-born child’s share is calculated based upon devises, if any, to other children.  An omitted child’s share is inapplicable if the omission appears from the will to have been intentional or if the testator otherwise provided for the child in lieu of the will.

Holographic and Oral Wills

Hawaii law recognizes an unwitnessed document intended as a will as a valid holographic will if the testator’s signature and all material provisions of the will are in the testator’s own handwriting. A court may consider evidence outside of the document itself in determining whether a holographic will was in fact intended as a will.

Oral (or “nuncupative”) wills are not recognized under Hawaii law.

Hawaii Trust Requirements

As of January 1, 2022, Hawaii trusts are primarily governed by Hawaii’s version of the Uniform Trust Code—which adds a new chapter to Title 30 of the Hawaii Revised Statutes and repeals Chapters 554A and 554C and Article VII of Hawaii’s Uniform Probate Code.

To create a valid trust under Hawaii law, the settlor must express an intent to create a trust and have adequate capacity (measured under the same standard applying to wills). An agent acting under valid power of attorney may also create a trust on a settlor’s behalf if the power of attorney authorizes creation of trusts. Unless a Hawaii trust is expressly made irrevocable, the settlor is assumed to retain the power to revoke or amend the trust. A Hawaii trust is void to the extent its creation was induced through fraud, duress, or undue influence.

A valid Hawaii trust must have a definite beneficiary (subject to exceptions such as for charitable trusts, trusts for the care of animals, and certain trusts created for noncharitable purposes), along with a trustee with actual duties to perform. The trustee of a Hawaii trust is a fiduciary subject to the “Prudent Investor Rule” and has a duty to administer a trust prudently–taking into account the trust’s terms, purposes, and circumstances.

A Hawaii trust’s purposes must be lawful, possible to achieve, and not contrary to Hawaii public policy. The terms of a trust and the trust itself must be generally for the benefit of the trust’s beneficiaries, subject to the provisions of the trust. Hawaii’s Uniform Trust Code specifically authorizes “charitable trusts” created for charitable purposes (such as the relief of poverty, advancement of education or religion, or promotion of health, governmental, or municipal purposes), life insurance trusts, trusts created for the care of animals (sometimes called “pet trusts”), and land trusts designed to hold title to real estate.

Though most trusts are evidenced by a written trust instrument setting forth the trust’s terms, the Hawaii Uniform Trust Code allows for oral trusts if the terms can be established by clear and convincing evidence. Certain types of trusts—such as trusts that own real estate—must be evidenced by a formal writing.

Hawaii trusts can be formed through transfer of property by a settlor to a trustee (either during life or through a will or other testamentary disposition), a declaration by the owner of property that the owner holds the property as trustee, by exercising a power of appointment in favor of a trustee, or by a court order.

Although creditors of a trust’s beneficiaries generally may attach a beneficiary’s interest in a trust, Hawaii law protects beneficiary interests from attachment if a trust includes a “spendthrift provision” restricting beneficiaries’ right to transfer interests in the trust.  If a spendthrift provision is present, most creditors of beneficiaries cannot attach trust assets until actually distributed to the beneficiary. However, spendthrift provisions do not prevent attachment for satisfaction of certain domestic support obligations and claims of government agencies.

Creditors of a Hawaii revocable trust’s settlor can attach trust assets as long as the settlor remains living (or, upon death, through estate claims). If a trust is irrevocable, settlors’ creditors can reach the maximum amount of trust assets that could be distributed to the settlor or for the settlor’s benefit.

Hawaii trusts terminate upon revocation or expiration under the trust’s own terms, when there is no purpose of the trust remaining to be achieved, or when the trust’s purposes become unlawful, contrary to public policy, or impossible to achieve. A trust may also be modified or terminated by a court upon the petition of the trustee, beneficiaries, and/or settlor.  In some circumstances, modification or termination of a trust may be made upon the consent of the trustee and all beneficiaries. Upon petition, a court may also reform or modify the terms of a trust to conform to the settlor’s intent or achieve the settlor’s tax objectives.

Special Considerations

Estate Taxes: Hawaii does not have an inheritance tax but is among the 12 states that still impose a state-level estate tax. Estates of Hawaii decedents valued above $5.49 million qualify for the estate tax. The tax is assessed on assets over the limit at rates progressing from 10 – 20% depending on the total estate value.

Simplified Probate:  Hawaii offers a streamlined small-estates probate process, allowing for abbreviated administration of qualifying estates. An estate cannot use the small-estate process if it includes Hawaii real estate or other assets exceeding $100,000 in value. Upon probate court approval of a verified petition, the clerk is appointed to administer the estate—collecting and distributing estate assets in accordance with the streamlined procedure.

Hawaii also has a summary probate process for estates with personal property below $100,000 but that do include real estate. The summary process works through the court but involves less formality than standard probate.

Non-Probate Transfers:  Hawaii law provides several mechanisms for transferring assets without going through probate. In addition to non-probate transfer using living trusts, Hawaii allows assets co-owned as joint tenants with right of survivorship to automatically transfer to a surviving co-owner.  Married couples can also elect to own property as tenants by the entirety—which has a right of survivorship like joint tenancy and provides additional protection against creditors.

POD (payable-on-death) and TOD (transfer-on-death) designations—which allow for automatic non-probate transfer to a named beneficiary upon an owner’s death—are also useful for bypassing probate in Hawaii.  POD designations can be added to financial accounts and CDs.  TOD designations can be used with registered securities, brokerage accounts, and other similar assets.

Along the same lines, some assets—like retirement accounts, annuities, and life insurance—allow owners to name a beneficiary who automatically takes ownership of the asset upon the original owner’s death.

Transfer-on-Death (TOD) Deeds and Vehicle Titles:  Hawaii is among the minority of states that recognize TOD designations on real estate deeds.  Real estate subject to a TOD designation automatically transfers to the named beneficiary upon the owner’s death, avoiding the need for probate.  Hawaii does not authorize TOD designations on vehicle titles.

Spousal Shares: To protect against disinheritance, Hawaii law affords surviving spouses a right (waivable by a valid pre- or post-nuptial agreement) to claim a spousal elective share in a decedent spouse’s “augmented estate.”  The elective share percentage ranges from 3 to 50 percent, depending on how long the couple has been married. A surviving spouse receives a supplemental elective share of up to $50,000 if the surviving spouse’s share of the estate would otherwise be less than $50,000.

Along with wealth within the decedent’s net probate estate, the augmented estate includes the value of some non-probate transfers (such as assets held in joint tenancy or subject to POD designations) and considers the value of the surviving spouse’s estate.

If a married Hawaii decedent leaves no will, the surviving spouse’s intestate share is the entire estate if

  • The decedent leaves no surviving parent or descendant; or
  • All of the deceased spouse’s surviving children are also the children of the surviving spouse, and vice versa.

If the deceased spouse leaves a surviving child who is not also the child of the surviving spouse, the surviving spouse’s share is $100,000, plus half of the balance. The surviving spouse’s share is $150,000 plus half the balance if the decedent’s children are also children of the surviving spouse, but the surviving spouse has children who are not children of the decedent.

Creating a will or trust does not have to be difficult or intimidating.  However, certain circumstances—like second marriages, stepchildren, aging parents, special needs beneficiaries, guardianships, and business interests (to name a few)—can add a layer of complexity and result in unforeseen long-term consequences.  Whenever any out-of-the-ordinary issues are present, it’s a good idea to consult with an experienced attorney familiar with and licensed under the laws of the relevant jurisdiction.

 

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