Hawai‘i’s estate tax exclusion remains at $5,490,000 per person, with tax rates as high as 20%. While this may seem like a high threshold, many Hawai‘i residents can exceed it quickly—especially when factoring in the value of a primary residence, inherited assets, life insurance proceeds, retirement accounts and investment portfolios.
Minimizing exposure to Hawai‘i’s estate tax should be a key part of your estate planning strategy. One of the most effective yet often over-looked tools is estate tax portability. This allows a surviving spouse to use the unused portion of the deceased spouse’s estate tax exclusion—potentially doubling the exclusion to $10,980,000. However, portability is not automatic. You must file a timely Hawai‘i estate tax return after the first spouse passes away, even if no tax is due at that time. Unfortunately, many families miss this opportunity because their advisors whether attorneys or CPAs—are unfamiliar or uncomfortable with the process and simply don’t file the return.
Failing to claim portability can result in a significant and unnecessary estate tax burden when the surviving spouse dies.
If you or your spouse have a combined estate nearing or exceeding Hawai‘i’s exclusion amount, now is the time to plan ahead and take full advantage of the available estate tax strategies.
YIM & YEMPUKU, LLLC–Estate Planning Attorneys
2054 S. Beretania St., Honolulu, HI 96826
808-524-0251 | yimandyempukulaw.com
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