Hawaii Revocable and Irrevocable Trusts
When discussing estate planning in Hawaii, revocable trusts invariably are central to the conversation—as are their corollary, irrevocable trusts in Hawaii. As lawyers who provide effective representation to clients in all matters of wills and trusts, we believe it is important to understand the distinctions between different types of trust arrangements and how our clients can achieve their estate planning objectives.
Here is a side-by-side comparison of how trust fund structures can vary.
Irrevocable trusts in Hawaii
Upfront, it should be clear that an irrevocable trust does not mean a trust is unchangeable. In simplest terms, irrevocable trusts are intended to be unchangeable by the trustee or beneficiaries, but under certain circumstances the grantor has the right to make such changes as he or she sees fit. A court may also decide, in rare cases, that unexpected circumstances warrant a change—such as when an investment is a great risk due to market conditions.
But the spirit and intent of the laws on irrevocable trusts make it clear that a trust fund in Hawaii should not have changing terms or be amended or revised. An irrevocable trust can mean significant tax advantages when, for example, property is placed in such a trust. Also, property can be placed in a trust to be held until the death of the grantor, out of reach of creditors but available to heirs. Other features of irrevocable trusts include:
- They can be converted from revocable to irrevocable status upon death of grantor.
- Terms can extend over decades and generations (in particularly large estates)
- Terms can be contingent on behaviors of heirs, usually placed to encourage responsible management of inheritances.
Hawaii revocable trusts
A revocable trust is generally more flexible than an irrevocable trust, and the primary advantage is that such a trust avoids the need for probate of assets following death. A few features of a revocable trust are:
- Can include any type of asset, including real property, stocks, bonds, checking and savings accounts, life insurance policies and mutual funds.
- Banks and stockbrokers need to have a copy of the trust agreement.
- You can change or revoke the trust under the conditions of revocable living trusts at any time.
- Additions and withdrawals to the trust are allowed at any time.
The establishment of any irrevocable or revocable trusts should take into consideration each of these factors, as well as the potential financial needs of the grantor in his or her remaining years. Because they can solve different problems, both revocable and irrevocable trusts are at times created for the same client. An experienced trusts lawyer in Hawaii can always explain the options.
At the Law Offices of Reuben S.F. Wong, we 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.
