Estate Planning of Honolulu Blog
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When undergoing the difficult process of transitioning a deceased loved one’s assets, probate avoidance is a must. Probate court proceedings can be long and frustrating, putting your family through unnecessary hassle as they ascertain who gets what. Sparing those close to you of the emotional and financial stress that this process causes can be achieved in various ways. One vehicle to drive this quest for avoiding probate will help considerably to ease the process.
Joint Ownership of Estate
Joint ownership is a reliable and effective way to secure probate avoidance in Honolulu or anywhere else in Hawaii. If you co-own a property and this co-ownership includes the right to survivorship, then the surviving owner automatically owns that property when the other owner passes away. You will then be able to transfer the property without needing the courts to get involved. All you need to do is show paperwork proving that you, the surviving owner, legally hold the property’s title.
Three joint ownership types contain a right to survivorship in Hawaii. One case is joint tenancy, where a property is passed to the surviving owners when one dies. If you have a significant other (married or not), this is very helpful when you’ve acquired real estate, vehicles, or any other valuable property. Then, there’s tenancy by the entirety, which is much like joint tenancy, but is permissible for married couples and registered domestic partners only. Another type for married couples is community property with right of survivorship, which functions similarly to joint tenancy.
How to Prove Joint Ownership
If you find that your property is not properly titled, it is highly recommended that you execute a new deed that clearly states survivorship intentions. All you have to do is complete a simple form and supply a copy of the previous owner’s or co-owner’s death certificate to become the sole owner.
For real property, you as the surviving owner will have to record a document proving joint ownership. Evidence can be presented as an affidavit or a sworn statement. This statement should contain a legal property description and a statement that the property was held in joint tenancy. You should also include recording information that identifies the prior document was establishing joint ownership. So attach the book and page number or document identification number for the prior deed. The deceased owner’s name, death date, and death certificate copy should be included as well as your name.
Whenever you or a loved one owns property or accrues liquid assets worth more than $100,000, you should take the time to create a solid backup plan. There are potential drawbacks when you add someone as a co-owner, such as the potential triggering of the federal gift tax if the property value is high. But, using joint ownership measures will help you avoid stressful proceedings when you transfer property rights. Probate avoidance in Honolulu and across the board becomes achievable by putting this simple vehicle in motion.
To learn more about proper estate planning, schedule a free consult with Michael Madison, Honolulu Estate Planning Attorney.
What is probate?
Many people don’t think about probate until someone they care about passes away and their assets are held up in probate court. What is probate? Probate is the official way an estate is settled with the supervision of Hawaii courts. Probate only comes into play when there is no will or a will has been determined to be invalid. On the most basic level, probate helps prevent fraud. Fraud could occur if a person’s assets are taken from who they are intended for. Without proper legal documents and proceedings, this could happen.
During probate, the court has the legal authority to gather and estimate value for the deceased’s assets. Once the value of one’s estate is determined, all outstanding bills and taxes are paid. After all debts are paid in full, the remaining value will be distributed amongst beneficiaries and heirs. Usually, one person either the decedent’s spouse, child, or personal representative, will be assigned by the court to distribute these benefits.
In Hawaii, there are several ways a person can avoid their estate entering probate. But, the most important factor is that all paperwork is handled appropriately and filed before death.
Establish Joint Ownership
One of the ways, Hawaiians can avoid probate court is to establish joint ownership. Joint ownership will help families avoid probate. Under joint ownership, if something is owned with a partner, and “the right of survivorship” applies, the asset can pass to one owner if the other dies. This type of agreement does not have to go through probate court.
In Hawaii, you can create a living trust for virtually any asset including real estate, bank accounts, and vehicles too. Living trusts are designed to protect a decedent’s largest assets from probate proceedings. It is one of the most popular forms of probate avoidance strategies in Hawaii. Living trusts are relatively cost-effective and simple to set up. However, it’s best to have legal guidance to ensure the trust cannot be challenged in the future.
Designate Transfer-On-Death Beneficiaries
With transfer-on-death benefits, a person’s assets can transfer automatically at the time of a person’s death. Examples of assets that can be handled under this legality include bank accounts, brokerage accounts, real estate, and not securities. Transfer on death benefits do not apply to vehicles in Hawaii.
The guidelines above can help a family avoid the hassle of probate court after a loved one’s death. Taking steps to avoid probate court can ease a family’s burden and allow them to mourn in peace.
If you are entitled to a portion of an estate and got stuck in Hawaii probate court, you are likely wondering where you should turn for answers. Your only option at this point is to deal with the process in a way that reduces the pain and stress. You already know by now that a proper estate plan would have helped you avoid this situation, but you can’t do much about it now that you are here. Tell your friends and family that they need a proper estate plan if they own property or more than $100,000 in assets.
People tend to panic when they go to probate court because they don’t know if they will get the property or assets to which they are entitled. Since avoiding probate in Hawaii is not possible once you are in it, do your best not to panic. If you allow yourself to panic, you could make a poor decision that will make the problem worse than it already is. Take a few deep breaths and give yourself a little time to relax. Although it won’t always be easy, calming yourself down and keeping a level head are your best options if you want to make the most of the situation.
If you and the other beneficiaries have trouble reaching a fair agreement, you could stay in Hawaii probate court much longer than you thought. You will force the court to settle disputes between you and the people who disagree with you, which could take several hearings. In addition to going to court hearings, someone could try to appeal a decision with which they disagree. Being agreeable and willing to make a few compromises won’t be easy but is the best way to move forward without unneeded stress. Working with the other people involved in the legal process might not seem ideal from the surface, but it could save you a lot of time and legal fees.
You can never know if the other people involved with the case have your best interests at heart when they move forward. Probate issues are complex and often trigger people’s greed, prompting loved ones to turn on each other. Even if you trust the other beneficiaries, getting a lawyer is the only safe way for you to take action. Your probate lawyer is the only one who will place your interest above everything else.
Avoiding probate in Hawaii is the best way to handle the situation, get the assets to which you are entitled, and ensure that your loved one’s final wishes are met. A member of our legal team will speak with you and help you prevent going to probate court so that you won’t need to deal with the complex legal process. Even if you are already stuck in probate court, our legal team can safeguard your rights and give you the best results possible. If you have questions or would like to move forward, contact us today to get your free consultation.
Deciding on a business structure that is right for your entity is an essential part of establishing a new organization. It is necessary to know the difference between a sole proprietorship and a limited liability company (LLC). These business structures differ in members benefit, ownership, and taxes. This article highlights the three significant advantages of LLC owners have over sole proprietors.
- Limited Personal Liability
In a limited liability company, proprietors are not responsible for business debts, while in a sole proprietorship setting the property owners to settle the advances. If the entity is unable to pay its loans on time, lenders will go after bank accounts or properties of each owner to raise their money. By contrast, if an LLC firm runs out of finances, the individual members are not usually accountable. Also, LLC members have protection from any court case that arises against the enterprise.
It is worth noting that under certain situations, a shareholder may be responsible for the LLC debts if:
- They guarantee a loan
- The organization violate state law like failure to pay revenue or defraud consumers
- Their funds have intermingled with LLC finances
- The LLC has minimal insurance and capitalization
- More Tax Options
The Income of LLC shareholders is not taxed at the corporate level. Individual proprietors share company losses as they are directly passed to them. It allows individual members to claim the losses of a firm. The feature aids to avoid double taxing and margins to stay within an entity for future growth.
If you operate a company as a sole proprietor, the revenue department will tax you as a self-employed firm. The business law considers the enterprise income as your income for taxation purposes. A limited liability company, on the other hand, can be taxed as a corporation, partnership, or sole proprietorship. LLC owners have the power to make an election for the business to be classified as a corporation for the sake of taxation. Failure to make the request, the organization, will pay its duties as a sole proprietorship. The number of its members also determines whether it falls under sole proprietorship or an LLC.
- Ease of Ownership Transfer
Stakeholders in a limited liability company have the right to sell their shares to a third party. The ownership transfer process will not affect the business operations. However, for a sole proprietorship enterprise, the owner cannot sell their interests directly as they have to individually transfer each of its permits, assets, and licenses. Sole proprietors must produce new and valid tax identification numbers and bank accounts for the transfer.
Sole proprietorship and a limited liability company are the most popular structures for enterprises. Hawaii residents should understand their advantages and disadvantages to make an ideal decision. Remember to check out the startup and operational costs of both structures to save your money. The two must adhere to specific regulations during registration, taxation, and ownership transfer. A business lawyer will guide you on the perfect structure for your needs.
Eye on The Prize: Are You a Big Picture Thinker?
As most of us know, nothing in life is guaranteed. For that reason, it is highly important that you keep an eye on the prize – an easy transfer of estate valuables to your family or named beneficiaries if something were to happen. The grand picture involves thinking ahead and no longer procrastinating. After all, your family’s future is in your hands – there is no room for postponement. Plus, if your Hawaii estate planning is in set up now, it will release a lot of worry you and also help your ohana. Once your estate plan is in place, the benefits will be overflowing.
Plan your Work, and Work your Plan
Although life insurance is both valuable and very necessary, it does not secure your estate. In fact, quite the contrary, insurance generally will not even cover all your costs. Oftentimes an estate plan can not only cover the remaining “hidden” costs but it adds to the families assets. Without a plan, the estate is in jeopardy. As well, an estate plan needs to be carefully thought out. How the plan is implemented depends on many variables like net worth, family dynamics, transfer of assets and certain individual preferences. Yet to plan your work now and also work your plan you need to be wise by devising a smart Hawaii estate planning as soon as possible. Your actions of making a trust now are a fortuitous way to help your immediate family and future generations to come.
EVERYONE NEEDS IT BUT NOBODY WANTS TO THINK ABOUT IT
By postponing the small amount of work in doing an estate plan, you have the potential of affecting your family for generations. Like insurance, you should always have an estate plan made. Likewise, it should always be updated to ensure all assets are included. If you are concerned about the future of your family but have not set up an estate plan, then now is time to secure your family’s’ tomorrow.
1.The Bishop Museum is a Cultural and Educational MUST For Kids and Adults.
This is a must for Hawaii families. It is an educational and fun experience. The Bishop museum was built in 1889 by Charles Reed Bishop in honor of his deceased wife Princess Bernice Pauahi Bishop. The museum has many events and exhibits that are fun and educational. A trip to the Bishop Museum is a must on the list of family activities for Hawaii families. Exploring the history and timeless treasure of Hawaii is a great way to spend a rainy day with the kids.
2. Too Rainy To Go To the Beach? Let’s Ice Skate!
Building a sand castle or outdoor swimming may be cancelled, so why not go ice skating? The Ice Palace opened in 1982 is the only ice rink available in Hawaii. There are public hours available for free skating, a hockey league, and skate school for those just learning. The Ice Palace is also available for special events such as birthday parties. There are several party packages available. Hawaii families can enjoy an afternoon of skating and spending time together. The Palace, as it is known to locals, has been visited by people from all over the world. The Ice Palace has attracted countless crowds, and has been visited by Olympian skater, Kristy Yamaguchi. Some adults who grew up in the 80’s probably have memories of their visits at the Ice Palace. Why not create a memory for your kids?
3. Lunch and a Visit To the Waikiki Aquarium
The Waikiki Aquarium opened in 1904 and has been showing the wonders of the Hawaii reefs ever since. There is much to see in the exhibits which offer viewings of corals, marine communities, jellyfish, natural predators, and much more. The Waikiki Aquarium also has a full calendar of events and offers programs for schools, activities and classes for the family, and the opportunity to plan your own private celebration. However, if you are just there to experience family activities for Hawaii families on a rainy day, then a self-guided tour is always allowed. Your kids can enjoy learning about their natural environment. There are lots of delicious places to eat, but remember that the parking is metered, so be sure to bring lots of quarters.
Families in Hawaii have lots of options when it comes to finding family friendly activities on a rainy day. Instead of keeping the kids inside, why not build some memories by treating them to an outing to one of the wonderful, historical, and educational options listed?
Trusts operate as legal documents that get established that is called a grantor. Your trust will hold your property and assets for specific people. These people get called beneficiaries. A person known as the trustee controls the trust. Sometimes, the grantor can act as the trustee. Other times, the grantor can hand trustee duties to a family member, friend, or Hawaii estate planning professional.
Did You Create a Revocable Trust In The Past?
If you did make a revocable trust in the past, you might want to take some time to do a short and simple review. Sometimes, circumstances can change in the time since you last did your trust. As the grantor, you want to ensure that your trust reflects your current wishes.
If you haven’t completed the estate planning process yet, you will want to start as soon as possible. We never know when unexpected events could occur. By creating a trust in the present, we can make sure that our loved ones get looked after in the event of a tragedy.
Have Your Circumstances Changed Since The Trust Was Originally Drafted?
Changing circumstances can often happen to many people with a Hawaii trust. For example, your financial picture may have undergone drastic changes. Or you might want to add or take off a beneficiary from the original draft of your estate. By drafting a revocable trust, you can quickly make changes as the grantor whenever the need arises.
Review Your Trust Every Few Years
Lives change in the blink of an eye. So do family dynamics and financial circumstances. Ensure that your Hawaii trust reflects your current life circumstances by doing a trust review every few years. Doing this can go a long way towards preventing nasty court battles after you’re gone.
Ensure That Your Trust Gets Distributed According To Your Intent
Every few years, you should take the time to review your revocable trust and make any desired changes. If you don’t take the time to perform trust reviews while you’re alive and of sound mind, an unwanted beneficiary could receive money or property from your estate. While revocable trusts remain harder to contest in court than wills, it’s not impossible to challenge them. By stating your intent now, you can make it much more likely that all approved beneficiaries will get their rightful share of your assets and property.
If you would like to learn more about Hawaii estate planning, trust reviews, or creating a new trust from scratch, you can send an email to our offices. You can also call our offices directly. Either way, a member of our staff will answer any question or concern you may have.
Make a Will
You needs a will, regardless of income level. You should name an executor and assign a guardian for each child under 18. In the case of young children, you also need to have a minor’s trust created by an attorney. This means that any assets left to them will be held in said trust until the recipient reaches the age of majority. You should review your will with each life event, or at least every three years.
Know When to Create Trusts
If you own property especially if you want to keep terms private, establish a living trust is critical. This bypasses probate and the associated costs. Otherwise, generate a trust within the will, especially when:
- You don’t want to leave any assets directly to minor children.
- You want to protect you property from falling into the hands of a child’s ex-spouse or a creditor.
- You feel that your adult children lack responsibility in handling an inheritance.
Properly planning and protecting your estate is important now more than ever. Schedule a no-obligation consultation today.
While buying a home is a time spent looking forward to a better life, one should also view the process as an opportunity to plan for the end of one’s life. Considering what you leave behind for your loved ones is as important as building your own future, so even first time homeowners in Hawaii should be considering ways to make that time easier for your family. That means doing what you can now to limit the grueling process of probate, years from now.
Revocable Trusts Can Make Life Easier For Your Survivors
When meeting with an attorney for the purposes of their estate planning in Hawaii, many individuals and couples opt for a revocable trust instead of a will. The reasoning behind this move is that trusts spend far less time in probate, making it possible for heirs to receive their inheritance in a more timely manner. In addition to shaving months off of the probate process, a trust could end up saving families thousands of dollars in legal fees.
Another advantage to establishing a trust of which many people are unaware is that the Federal Deposit Insurance Corp. insurance limit is higher than it is on individual bank accounts. Where the FDIC only insures individual accounts up to $250,000 in many banks, trusts are granted a higher limit, usually an additional $250,000 per beneficiary.
Widely Unknown Facts About Revocable Trusts
There’s an undeniable advantage to first time homeowners in Hawaii by including their real estate in a revocable trust. By doing so, the property can avoid forced sale by the state to cover debts in probate. Instead, the trust will pass the home on directly to your beneficiaries upon your death, avoiding court interference. The trust can also detail your wishes for how any existing lien on the property should be handled. For instance, you may want other assets in the trust to be used to pay off that debt, or you can leave that decision up to your trustee. In any case, the revocable trust allows you to decide what will be done with your home, confident that your last wishes will be respected.
Another benefits of establishing a revocable trust, when conducting your estate planning in Hawaii, is that the trust is a private document. Unlike a standard will, the trust doesn’t go through probate and, therefore, doesn’t fall under public domain. Copies of any will can be obtained by requesting it from the court, but trusts are not available in this way.
Unfortunately, if litigation occurs, such as a disinherited heir contesting the terms of the trust, the trust will become a part of public records. Copies of the trust will be made available during the litigation process, causing the details of the trust to become publicly available.
Finally, it should be noted that a will is still necessary, or, at least, advised in setting up your final wishes. When a will is left behind, the court uses that document to open up the estate to probate, allowing creditors to make claims against the decedent’s assets for a limited period of time. Usually, that term is no longer than three months.
Why is that good? Without probate, creditors have up to two years to make claims against an estate. For that reason alone, it’s better to have a will in place.
There are many more advantages to setting up a revocable in addition to a will. By discussing the option with an experienced probate lawyer, you can decide if this is the best route for your circumstances.
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