Estate Planning
with the Law Office of Stephen H. Reese
Why Choose Us?
For over thirty years, the Hawaii community has turned to us for assistance with estate planning, and it’s easy to see why. You can feel the difference working with an attorney from the Law Office of Stephen H. Reese.
Estate planning attorneys Stephen H. Reese and John M. Van Atta each work with clients throughout Hawaii on a personalized basis to help them to understand their options, complete necessary documents, and ensure that their wishes and legacy are honored.
Let us guide you . . .
What is Estate Planning?
At the most fundamental level, estate planning can be considered the use of legal documents (see further discussion below) to provide for the transition of your assets after you’re gone. But, estate planning can also be considered from a broader perspective as:
TRANSFER PLANNING
Deciding to whom and how your physical and financial assets will transfer.
FINANCIAL PLANNING
Ensuring that you have financial resources to live comfortably.
FAMILY PLANNING
Providing for future family harmony and well-being.
LEGACY PLANNING
Influencing how you will be remembered.
CONTINGENCY PLANNING
Thinking through the “what-if” scenarios both during life and after death.
The Tools of Estate Planning
Basic estate planning documents in Hawaii include a Will, Trust, Durable Power of Attorney, and Advance Health-Care Directive. Toggle the following topics to learn more:
A Will is a testamentary instrument that provides instructions on how you would like your assets to be distributed upon your death.
The terms of your Will designate who will be the Personal Representative of your Estate (the person responsible for settling your Estate) and the Guardian of your minor children, if any.
Upon one’s death, his or her Will must be validated by the Probate Court and a Personal Representative must be appointed by the Court before settlement of the decedent’s Estate can begin. The Probate Court process can be time-consuming and costly and is a matter of public record.
Therefore, a Trust is usually recommend as it can be kept confidential. If you pass away without a Trust or a Will, the Court will appoint a Personal Representative and distribute your property pursuant to Hawaii law and statutes.
In Hawaii, in general, a valid Will is in writing, signed by the testator, and witnessed by at least two individuals (generally competent to be a witness), each of who have signed the Will acknowledging the testator’s signature.
The testator and two witnesses must sign before a notary public. If the Will does not meet these requirements, the Will still may be found valid by the Hawaii Probate Court depending on the surrounding circumstances.
A Trust is a legal relationship that is created when:
A party (known as the “Grantor”, “Settlor” or “Trustor”),
– transfers property to a person or company (known as the “Trustee”),
– to hold said property in accordance with the provisions of a written instrument (the trust document),
– for the benefit of one or more persons or entities (the “Beneficiaries”).
Property includes both real property (such as land and buildings) and personal property (such as bank accounts, stock and bonds, and personal effects.
A Trust can be used to avoid probate, provide asset management, minimize state and federal transfer taxes, and ensure your assets are distributed at your death according to your wishes. A common form of a Trust is a revocable living trust whereby the Grantor retains the authority to make changes to the terms of the trust document during his or her lifetime.
During your lifetime, you can serve as the Trustee and remain in control of the Trust assets. Upon your incapacity, your Successor Trustee will manage your assets for your benefit. Upon your death, your Successor Trustee will ensure all last bills are paid, taxes are filed and paid, and assets are distributed as directed in the trust document.
Having a Trust allows for a seamless transition upon your incapacity and/or death.
A Durable Power of Attorney is a legal instrument that appoints an agent (also called an attorney-in-fact) to act on your behalf with regards to your financial matters.
An agent can be appointed for a very specific purpose (i.e., signing closing documents for real estate sale) or for more general purposes.
Your agent will have authority to manage non-trust assets while you are alive, but does not have authority to manage your Trust assets. The Power of Attorney terminates upon your death or its revocation.
The Advance Health-Care Directive allows you to give instructions about your own health care, to name someone else to make health-care decisions for you, either immediately or only if you are unable to do so yourself, to designate your primary physician (optional), and whether you are a an organ donor (optional).
This form does not act as a Do Not Resuscitate, but instead informs the doctors of your end of life decisions such as life-sustaining or life-prolonging treatments and who you choose to advocate on your behalf if you are unable to do so on your own.
Choices are provided for you to express your wishes regarding the provision, withholding or withdrawal of treatment to keep you alive, including the provision of artificial nutrition and hydration, as well as the provision of pain relief medication.
More on Trusts . . .
Benefits of Revocable Living Trusts
There are many different types of trusts. For most cases, however, a revocable living trust provides many estate planning benefits.
Direction and Control after Death
The primary benefit of a trust is to give clear directions about what you want to happen to your property after you are gone. For instance, if you own a home, you can give a loved one the right to live in the home and set the conditions of their residence; you can give a loved one the right to purchase the home and set the terms; or you can direct that the home be sold and the sales proceeds distributed among your designated beneficiaries.
Avoid Probate
Probate is a court proceeding to transfer title to your assets. It can be a long, time-consuming, expensive, and stressful process. A trust can avoid probate and its challenges.
Avoid Conservatorship
In addition to taking care of your property after you die, your trust can be used to provide for your care as you age. Without proper planning, your loved ones may have to apply to a court for appointment of a conservator to manage your assets if you are unable to manage your assets yourself. Rather than needing to seek court involvement, which can be expensive and embarrassing, your designated trustee can use your trust funds and property to provide for your care.
Tax Efficiency
A revocable living trust can include provisions that take advantage of estate, gift, and generation-skipping transfer taxes to minimize the impact of such taxes on your estate.
Protection for Minors, Special Needs, Spendthrifts
If your beneficiaries may be minors or otherwise too young to inherit property or if they face other challenges such as substance abuse or illness or if they simply are not good with money, a trust can be used to provide for their care without giving them large sums of money outright. A trust can also be used to provide for a beneficiary’s health care and education or to help them purchase a first home or start a business.
Consolidate Assets
A trust can be used to consolidate ownership of assets in order to manage them more effectively. Additionally, if property is owned in multiple states, a trust can be used to avoid the need for a probate proceeding in each of those states.
How Trusts Work
A Trust requires three roles:
Grantor (also called “Settlor”): Transfers property to a Trustee to be managed according to a written trust document.
Trustee: A person who must, by law, manage trust property according to trust terms.
Beneficiary: Someone entitled to benefits from a Trust.
In most cases, someone who creates a revocable living trust serves in all three roles while they are alive. In other words, they are the Grantor, the Trustee, and Beneficiary. For most day-to-day practical purposes, owning property in a revocable living trust is no different than owning property outright.
The terms of the trust designate who will be trustee after the Grantor. If the Grantor becomes unable to manage the trust property while they are alive or upon the Grantor’s death, the designated Trustee steps in to manage the Trust property according to the terms written by the Grantor in the Trust.
Questions?
Call us today for a complimentary estate planning consultation.
