Owning a home in Hawaii means you own property worth protecting. A trust can serve as a useful estate planning tool to do just that. With property planning, you can use a trust to express your wishes and instructions, avoid probate, help to minimize taxes, maintain harmony in your family, ensure a legacy for your loved ones, and keep your affairs private and out of the court system.
A trust is simply a legal arrangement to care for property and is usually expressed through a written document. It requires that someone owning property transfers that property to a “trustee” who cares for the property on behalf of a “beneficiary.” In the typical case, you or your spouse act as both “trustee” and “beneficiary,” meaning that you care for and manage your property for your own benefit.
After you're gone, or in the event that you were to become unable to care for your own property, whether through accident, illness or aging, then someone who you have designated takes over as trustee. On your instructions, the new trustee will distribute your property to a new beneficiary or set of beneficiaries, which are oftentimes children or grandchildren. Or, if your beneficiaries are too young, or if it is best that they do not come into ownership of the property, then your trustee can continue to hold the property for their benefit.
While many people are concerned that trusts are complex and hard to understand, as a practical matter, very little changes with regard to your property. You can think of your trust like a flexible, removable container for your property that comes with written instructions. Initially, title to your property is transferred into the container. You retain full rights to your property. You can transfer property in and out of the container. You can modify the instructions. You can even throw the container away, if you like.
It’s not essential to have a trust for your home, but without one, your home may be subject to the probate process, which is a court process. It can be long and expensive process, just like any judicial proceeding. Additionally, without clear instructions, your surviving loved ones may be left with different opinions about what you would have wanted, which potentially sets them up for confrontation and dispute.
There may be other reasons to consider using a trust depending on your particular circumstances. As a result, consider speaking with your estate planning attorney about whether a trust is right for you.
by John Van Atta, Attorney at Law Office of Stephen H. Reese
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