Trust Funds in Hawaii
Like trust funds in others states, Hawaii trust funds establish a legal relationship between a settlor (grantor) and beneficiaries. For example in Hawaii, a trust fund can be established by an individual who wishes for his assets to be distributed equally among his three children upon his death.
Generally, a trustee assumes responsibility for a trust once a settlor is gone. The trustee can be a Hawaii trusts attorney, a close friend, relative or sometimes a legal entity (a company). The trustee is responsible for overseeing the intentions of the settlor in several regards:
- The trustee is personally liable for problems that may arise with the trust. This might include adjusting poorly performing investment of funds in the trust.
- If the trust requires active management by the trustee over time, the trustee is responsible for reporting transactions associated with the trust property.
- The trustee is also responsible for filing required tax returns for the trust.
- Professional trustees, such as an attorney or certified public accountant, are held to higher liability standards than non-professional trustees in management of the trust assets.
- The trustee holds power to grant or refuse requests for early withdrawals by beneficiaries.
- Trustees are paid according to terms established in the original trust document.
How the trust treats beneficiaries is entirely up to the settlor. Beneficiaries can request changes in how and when they receive funds, but the leeway that is allowed is between the settlor and the trustee.
Types of trust funds
A trust fund in Hawaii can take several forms. Here are a few:
- Express trusts: The most common trust, it requires strong, written proof of value and it can take effect before or at the time of death of the settlor.
- Implied trusts: When the intention of the settlor to create a trust can be presumed, even if such a trust document had not been written.
- Constructive trusts: These are applied in the case where the settlor or beneficiary gained legal title to property by wrongdoing. A court request for an equitable remedy may construct a trust that rectifies an unjust allocation of assets.
- Generation-skipping trusts: These are established to pass assets to grandchildren. However, the income from assets can be designated for payout to children while leaving the asset value for the third generation.
As can be surmised by these trust definitions, the setting up of a Hawaii trust fund requires solid, experienced legal representation to ensure your interests are fully implemented. At the Law Offices of Reuben S.F. Wong, our Hawaii trusts lawyers cultivate long-standing relationships with our clients, based on trust and open lines of communication. For the convenience of our clients, weekend appointments are available, and we provide services in Mandarin and Cantonese.
