Avoiding Hawaii Probate
Basic Hawaii Probate Concepts:

If you die without having either your Hawaii real property in a trust, or another person on title with you as a Joint Tenant or Tenant by the Entirety (both of which carry the right of survivorship), your interest in your Hawaii Real Property will have to go through a Hawaii probate proceeding upon your death. Unlike some states, Hawaii does not have a non-court procedure to transfer real property after the owner(s) die.

In Hawaii, most timeshare ownerships are considered real property interests and have recorded conveyance documents. There are some exceptions.

Probate is the court process to determine the new owners of property after an owner’s death, and the transfer of the property to a new owner. Probate proceedings can tie-up your property for months or years and can often cost a family thousands of dollars in probate costs and attorneys fees. (See below regarding Hawaii Probate options)

If you have a joint owner on title with you, probate can be postponed until the last joint owner dies. Having a Last Will and Testament does not avoid probate for the remaining owner. Even if your estate is probated in your state of residence, your heirs will still need to file a Hawaii probate to take care of your Hawaii real property interest. The Will is helpful in providing instructions for distribution of property, and nominating a Personal Representative, and it can save costs, but it does not avoid the need for a probate proceeding.

Some Ways to Avoid Hawaii Probate:

Advance planning can save money and allow for a smooth transfer of title to accomplish your estate planning goals. Some key points to remember:

- Establishing a Revocable Living Trust, and conveying title to the Hawaii real property into the Trust with a recorded conveyance document, is a very effective way to avoid probate. I recommend that you have an experienced estate planning attorney draft your Trust, to make sure you have the kind of Trust which fits your circumstances.

- If you have established a Revocable Living Trust, make sure your Hawaii real property (including timeshares) is conveyed to the Trust with a deed or other proper conveyance document which is recorded in the appropriate Hawaii recording office. Many Hawaii timeshare owners who have Trusts have failed to properly convey their timeshares into their Trusts, resulting in unfortunate probate expenses.

- If husband and wife are on title to Hawaii property as Tenants by the Entirety (which has rights of survivorship), and they obtain a divorce, their tenancy automatically changes to Tenants in Common, which does not have automatic rights of survivorship. You should consult with a Hawaii attorney about how to avoid possible probate in such a situation.

- A divorce decree or judgment awarding Hawaii real property to one spouse does not automatically transfer the title of the Hawaii real property to that spouse: a deed or other conveyance document must still be signed, notarized and recorded in the proper Hawaii recording office for the title to legally transfer as directed by the court order or judgment.

- Adding an adult person on title, such as a family member, as a Joint Tenant can help avoid probate. However, this is not necessarily advisable for many people. You should consult with your estate planning attorney to determine what problems can result, before deciding if adding another person on title is recommended in your situation.

When Hawaii Probate is Needed for Real Property, there are sometimes options:

1. Small Estate Probate. For property valued at $100,000.00 or less on the date of death of the owner. The clerk of the Small Estate Probate Office in the county where the property is located can provide an application for Small Estate Probate. The cost in 2008 is approximately $650.00 minimum (varies depending on the value of the property). You do not need a Hawaii attorney to apply. If the application is accepted, the clerk handles publication notice in the newspaper and the court will issue an order of distribution of the property. An appraisal for date of death value of the property is required (County Tax valuation may be accepted). The process takes approximately 6-12 months. For timeshare owners, the resort maintenance fees must still be paid while waiting for the court distribution order. Some resorts will not allow the timeshare to be reserved until the title is in the name of a new owner.

2. Ancillary Acknowledgment of Authority process. This can be used (a) where there is already a probate started and still pending in the decedent’s residence state, (b) where there is no dispute among beneficiaries and heirs as to who is to be the beneficiary of the property, (c) where there are no unpaid creditors, and (d) where all condominium fees, resort fees, taxes, subdivision assessments, etc., will be paid up to date. This process will not work for you if there is no personal representative appointed in the decedent’s state. The benefits are that no appraisal of the property is needed and the process can usually be handled in about 3 months. The cost is more than Small Estate Probate, because a licensed Hawaii attorney is used to file the court papers, but there is more flexibility in distribution options than with Small Estate Probate.

3. Informal and Formal Hawaii Probate. If there is no state probate proceeding outside of Hawaii, or if the property is to be sold by the personal representative as part of probate and a court confirmation of the sale is needed, the next least expensive Hawaii probate option is an Informal Probate proceeding in the Hawaii Probate Court to obtain Letters Testamentary to transfer the property. Informal probate requires more steps and documents than Acknowledgment of Authority probate, but usually does not require attorney travel or in-court time (assuming all heirs/interested parties will sign waivers and agreements to the process).

   A formal Probate is needed where court confirmation of a sale of property is needed, or when the situation warrants obtaining court orders regarding the Will, final accounts, distribution, final judgment, and for other issues. Formal Probate is usually more expensive than Informal Probate.

   If an informal or formal probate or Acknowledgment of Authority process is needed for Hawaii property, please contact our office for an explanation of the options, estimated attorney’s fees and costs.