Tag: Estate planning

  • Who Gets My Stuff?

    You may have heard the old joke, “where there’s a will … I want to be in it.” That may be true, but is estate planning really all about “who gets my stuff?” Who gets your stuff is important, but when you sift through the reasons for doing estate planning, you may find that identifying who gets your stuff takes a distant back seat to far more important considerations.

    The primary concern most of us have about our estates is figuring out how to stay in control. Does it really matter who gets your stuff if you don’t get to enjoy it during your lifetime? So the foundation of your estate plan should be making sure you are in control of your stuff for as long as you are alive and well, and so your hand-picked decision makers will step in if you are unable to manage your stuff yourself. Choosing your successor fiduciaries is as important as any decision you will make about your estate plan.

    Part of staying in control of your stuff involves protecting it from creditors, predators and plain old bad luck. Think of your estate plan as a castle. Imagine a large stone enclosure surrounded by a moat. In the old days, the moat would be stocked with alligators to discourage anyone from approaching the walls. With your present-day estate plan, you can stock the moat with a different kind of gator: litigators — attorneys paid for with insurance — to protect you from people who would like your stuff to be their stuff. Having adequate liability insurance is a critical element of your estate plan.

    The walls of your castle represent various legal structures you can put in place to protect your home, business, rental properties and other assets. The legal structures might include trusts, limited liability companies, corporations, limited partnerships or a combination of entities. You can also consider using a special kind of ownership with your spouse called tenancy by the entirety to protect your stuff from claims against one spouse, and to make it so that both spouses must agree to any mortgage, sale, or other transfer of the tenancy by the entirety property.

    Ultimately, you will want your estate plan to assure that your stuff goes to whom you want, when you want, the way you want, with the lowest overall cost, delay and loss of privacy. You may want to put special restrictions on a gift to one beneficiary without imposing the same restrictions on your other beneficiaries. You might have special assets or special situations (including a special needs loved one) that require careful planning. The only way to navigate the alternatives is with the help of experienced counsel who can educate you as to the available options and help you pick the ones that are right for you and your loved ones. Good counsel can help you build the castle that is just right for your situation.

    Thinking of your estate plan as your castle helps you to zero in on your true values and objectives when it comes to making arrangements with your assets that will put you and your loved ones in the best possible position when something bad happens in the future.

    SCOTT MAKUAKANE is a lawyer whose practice emphasizes estate planning and trust law. He is a graduate of Ka‘u High School, Duke University, and the University of Hawaii School of Law. Scott has practiced estate planning law since 1983. He is the principal of Est8Planning Counsel LLLC, a 6-lawyer firm with offices in Honolulu, Kihei (Maui) and Kalaheo (Kauai). Scott has chaired the Elder Law and the Probate & Estate Planning Sections of the Hawaii State Bar Association, has served as President of the Financial Planning Association of Hawaii, President of the Board of Trustees of the Foundation of the Rotary Club of Honolulu, and President of the Christian Legal Society of Hawaii

    You may have heard the old joke, “where there’s a will … I want to be in it.” That may be true, but is estate planning really all about “who gets my stuff?” Who gets your stuff is important, but when you sift through the reasons for doing estate planning, you may find that identifying…

  • Meaningful Estate Planning

    As with many issues, to those who know, no explanation is necessary. To those who don’t know, no explanation is sufficient.

    In medicine, there is cure and care; in finance, there is worth and value. In estate planning, there is wealth and meaning. Most people see the estate planner’s role as writing a document that transfers wealth at death. Just as significant is our role to communicate our client’s meaning clearly. This meaning is the foundation for estate planning.

    The vast majority of estate plan failures occur because there was not a clear transfer of meaning. Clients who know that meaning serves as the foundation of the plan need no explanation; but there is no sufficient explanation for those who view the plan merely as transferring of property. And that is OK, if that is truly what they want.

    Clients sometimes think that they start estate planning when they see the lawyer. But the estate planning process starts long before that as each person begins to fashion a life of meaning and accumulate wealth. The result of one’s life is revealed at death. If one dies well, they lived well, with meaning, and passed meaning on as the underlying foundation for wealth. This challenging time offers an opportunity for us to choose what matters to us — what is meaningful; what is not.

    STEPHEN B. YIM, ATTORNEY AT LAW
    2054 S. Beretania St., Honolulu, HI 96826
    808-524-0251 | www.stephenyimestateplanning.com

    In medicine, there is cure and care; in finance, there is worth and value. In estate planning, there is wealth and meaning. Most people see the estate planner’s role as writing a document that transfers wealth at death. Just as significant is our role to communicate our client’s meaning clearly. This meaning is the foundation…

  • Siblingship

    Siblingship is the state of being related or interrelated, or a state of affairs existing between one of two or more individuals having one common parent. The term describes the unique, dynamic relationship existing between siblings. Siblings begin their relationship at a very young age. They experience joys and setbacks together — laugh and cry together. And through fighting, they can learn conflict resolution together. No other relationship is like siblingship.

    Sibling fights arise over property, so many parents aim to divide up their property fairly, in hopes that siblings will not fight. In my experience, this is not enough to avoid arguments.

    The estate planning process, if done properly, can do much to minimize the risk of fighting when parents die. However, many plans do not speak clearly enough in this respect. Leaving a family home or a heirloom “equally to the children” does not go far enough to help avoid family squabbles. Deciding what to do with the family home during a time of grieving puts too much pressure on the sibling relationship.

    Ultimately, the estate plan should mirror and reflect our lives and relationships. If your plan does not mirror and reflect your most important values, or does not speak clearly enough to ensure the preservation of the relationships am {Play}ong your children, I encourage you to review your plan with your estate planning attorney.

    STEPHEN B. YIM, ATTORNEY AT LAW
    2054 S. Beretania St., Honolulu, HI 96826
    808-524-0251 | www.stephenyimestateplanning.com

    Siblingship is the state of being related or interrelated, or a state of affairs existing between one of two or more individuals having one common parent. The term describes the unique, dynamic relationship existing between siblings. Siblings begin their relationship at a very young age. They experience joys and setbacks together — laugh and cry…

  • A Legacy of Aloha

    Estate planning is the process of protecting that which is important and then passing those important things on to our loved ones and future generations. Many concepts that are central to Hawaiian culture are particularly applicable to estate planning. Starting with the concept of ‘ohana (a very inclusive notion of family), all the way through lokahi (a sense of unity — especially appropriate at the passing of a loved one), estate planning and the culture of our islands interweave to form a rich tapestry of aloha.

    The term ha‘aha‘a describes an attitude of humility, which promotes family harmony during stressful times. Stress may arise in dealing with with illness and death, and the distribution of the assets of the deceased. Humility allows family members to form closer bonds at these times.

    Sometimes, dealing with issues surrounding the disposition of a loved one’s remains, much less the disposition of assets, requires family members to talk out differences and come to a consensus regarding what is right, or pono, as well as respect the wishes of the deceased and the living. It is common for different family members to have different views regarding the wishes of the deceased person, which may result in disagreements that can be both heated and destructive.

    However, all of the disputing parties may be right on some level. The deceased may have had many conversations with different members of the ‘ohana over the years. One family member might remember instructions given on one date that conflict with those given to another family member on another date. But a consensus may be reached if both family members can come together through the process of ho‘oponono, or making things right through talking out differences.

    Ho‘oponopono is a delicate process, and a successful conclusion may depend on the leadership of an experienced individual who can help family members clearly express their views and then validate those views so that all involved can both understand and respect the feelings and positions being communicated. Ho‘oponopono may be used while the senior family member is still alive to head off disputes and instill unity in the family.

    Mālama, or caring for and perpetuating one’s legacy, infuses and motivates Hawaiian-style estate planning. It extends from caring for family to caring for community through charitable giving. Remembering our root values helps to ensure that we are leaving a legacy of aloha.

    SCOTT MAKUAKANE, Counselor at Law
    Focusing exclusively on estate planning and trust law.
    www.est8planning.com
    808-587-8227 | maku@est8planning.com

    Estate planning is the process of protecting that which is important and then passing those important things on to our loved ones and future generations. Many concepts that are central to Hawaiian culture are particularly applicable to estate planning. Starting with the concept of ‘ohana (a very inclusive notion of family), all the way through…

  • What to Do Before a Loved One Passes

    We have been receiving an increased number of phone calls from our clients’ children, notifying us about the imminent death of one of their parents. The children usually call in a panic, asking if anything needs to be done before their parent passes. We do our best to assist them; however, sometimes it is just too late.

    When a client’s child, who is usually the trustee, contacts the estate planner right after their parent passes, the trustee is usually advised to call back sometime after the funeral.

    When the trustee is ready to proceed, he or she is asked to identify and collect financial information and important documents (i.e. wills, trusts, partnership documents, etc.), and bring several certified copies of the death certificate and an inventory of the assets. How the decedent’s assets are to be distributed and handled is determined in the initial estate administration meeting.

    If no issues or problems arise, the entire estate administration process generally takes about six to eight months — up to several years.

    Estate planners strongly suggest conducting an estate plan review at least every three to five years so that important decisions don’t have to be made during the very stressful time of a loved one’s waning days.

    STEPHEN B. YIM, ATTORNEY AT LAW
    2054 S. Beretania St., Honolulu, HI 96826
    808-524-0251 | www.stephenyimestateplanning.com

    We have been receiving an increased number of phone calls from our clients’ children, notifying us about the imminent death of one of their parents. The children usually call in a panic, asking if anything needs to be done before their parent passes. We do our best to assist them; however, sometimes it is just…

  • A Heartfelt Operating Manual

    How nice would it be if your child was born with an operating manual? There are many parenting books out there, but none that are specifically made for your child. The obvious reason for this is because the only person who can write an operating manual for a child, is the person who is raising the child.

    This idea really hits home for clients who have a minor child or a child with a disability and are concerned about who is going to love and raise him or her if they are no longer here. In this case, the most important estate planning document is the will. The will allows parents to appoint a guardian for their child if they are no longer able or alive to care for them.

    However, establishing a will alone is insufficient. It does not tell the guardian about the child or about how to love and raise him or her.

    To supplement the will, our nonprofit, the Heartfelt Legacy Foundation, created a memorandum entitled A Heartfelt Operating Manual. We recommend our clients fill out this memorandum to provide guidance to the appointed guardians in respect to specific child-rearing practices, and important choices and wishes regarding their child’s care — it also serves as a tool for parents to use in discussions with their guardian. The will, the memorandum and a conversation will prepare the guardian to provide what you wish — the best care possible.

    HEARTFELT LEGACY FOUNDATION (501(c) 3 nonprofit)
    Stephen B. Yim, Attorney at Law
    2054 S. Beretania St., Honolulu HI 96826
    808-524-0251 | www.stephenyimestateplanning.com | www.heartfeltlegacyfoundation.com

    How nice would it be if your child was born with an operating manual? There are many parenting books out there, but none that are specifically made for your child. The obvious reason for this is because the only person who can write an operating manual for a child, is the person who is raising…

  • Who Gets my Stuff?

    Is estate planning really all about “who gets my stuff”? Your assets may be important, but when you sift through the reasons for doing estate planning, you may find that identifying who gets your stuff takes a distant back seat to far more important considerations.

    For one thing, no matter how important your stuff is to you, your health and well-being are far more important. There could come a time when you cannot make or communicate decisions about your person and your care. Having your hand-picked decision-maker designated in your advance health care directive could make all the difference between family harmony and a peaceful exit, on the one hand, or a complete nightmare at the end of your days.

    Fortify your interest

    When it comes to your stuff, part of staying in control involves protecting it from creditors, predators, and plain old bad luck. Think of your estate plan as a castle. Imagine a large stone enclosure surrounded by a moat. In the old days, the moat would be stocked with alligators to discourage anyone from approaching the walls. With your present-day estate plan, you can stock the moat with a different kind of gators: litigators — attorneys paid for with insurance — to protect you from people who would like your stuff to be their stuff. Having adequate liability insurance is a critical element of your estate plan.

    The walls of your castle represent various legal structures you can put in place to protect you, your home, your business, your rental properties, and your other assets. The legal structures for protecting your stuff might include trusts, limited liability companies, corporations, limited partnerships, or a combination of entities. You can also consider using a special kind of ownership with your spouse called tenancy by the entirety to protect your stuff from claims against one spouse, and to make it so that both spouses must agree to any mortgage, sale, or other transfer of the tenancy by the entirety property.

    Ultimately, you will want your estate plan to assure that your stuff goes to whom you want, when you want, the way you want, with the lowest overall cost, delay, and loss of privacy. You may want to put special restrictions on a gift to one beneficiary without imposing the same restrictions on your other beneficiaries. You might have special assets or special situations (including a special needs loved one) that require careful planning. The only way to navigate the alternatives is with the help of experienced counsel who can educate you as to the available options and help you pick the ones that are right for you and your loved ones. Good counsel can help you build the castle that is just right for your situation.

    Thinking of your estate plan as your castle helps you to zero in on your true values and objectives when it comes to making arrangements with your assets that will put you and your loved ones in the best possible position when something bad happens in the future.

    SCOTT MAKUAKANE, Counselor at Law
    Focusing exclusively on estate planning and trust law.

    www.est8planning.com
    808-587-8227  |  maku@est8planning.com

    Is estate planning really all about “who gets my stuff”? Your assets may be important, but when you sift through the reasons for doing estate planning, you may find that identifying who gets your stuff takes a distant back seat to far more important considerations.

  • By Invitation Only

    Ideally, estate planning is “by invitation only.” Most people misunderstand this to mean that we, as the lawyers, are the ones doing the inviting. In actuality, it’s you, the clients, who are doing the inviting, by inviting us into your unique and textured lives.
    Each person has deep concerns they want to address based on their unique life stories. By inviting us into their lives, it helps us to understand them and their concerns, so that we can hopefully help to make things better for them and their family.

    This is true even when it seems that people only want to talk about probate and taxes. Estate planning is so much more than that. When people start the conversation by saying they want to avoid probate or minimize taxes, what they are often saying is that they worked so hard to accumulate things and they want to leave as much as they can for their beneficiaries to make life easier for them.

    Many people don’t feel comfortable with this foundational human element and stay safe in “content, worth and procedure,” and avoid “context, value, and process.” However, it is each client’s unique story that provides the context and builds the foundation for each estate plan. It is the value underlying the worth of assets that provides meaning. Because life is in constant change, estate planning is a process of self-reflection and conversation, rather than solely the making of a document or going through probate.

    When you see your estate planning attorney, tell your story and write it down. It will make all the difference in the world.

    Stephen B. Yim, Attorney at Law
    2054 S. Beretania St., Honolulu HI 96826
    808-524-0251 | www.stephenyimestateplanning.com

    Ideally, estate planning is “by invitation only.” Most people misunderstand this to mean that we, as the lawyers, are the ones doing the inviting. In actuality, it’s you, the clients, who are doing the inviting, by inviting us into your unique and textured lives.

  • Three Documents Everybody Needs

    There are three estate planning documents that every competent adult living in the State of Hawai‘i should have. Of course, “competency” can be an elusive quality, but once a Hawai‘i resident has turned 18, the law of our State presumes that person to be competent. So if you have children or grandchildren getting ready to leave Hawai‘i for college in the fall — or even
    if they are staying in the Islands for the indefinite future — and if they are at least 18 years of age, they should have in place a durable power of attorney, an advance health care directive, and a HIPAA authorization. (HIPAA refers to the Health Insurance Portability and Accountability Act of 1996.)

    Durable power of attorney
    A durable power of attorney gives authority to other people to deal with one’s assets. The person who signs the power of attorney is called the principal, and the person appointed to act on the principal’s behalf is called the agent. Under Hawai‘i law, an agent owes fiduciary duties to the principal, and the agent can get in big trouble for failing to carry out those duties. Without a power of attorney in place, it might be necessary to institute an involved court proceeding if a person is absent or incapacitated at a time when something must be done with the person’s assets. This might be the case if the person is in an accident and cannot access his or her funds to pay for care or for regular obligations, such as rent.

    Advance health care directive
    You would use an advance health care directive to give authority to other people to make health care decisions for you if you are unable to communicate those decisions for yourself. If, for example, you were unconscious and you needed surgery, who would sign the consent forms for you? If you have an advance health care directive in place, your hand-picked health care agent could sign on your behalf. Your health care agent could also make other decisions for you, including end-of-life decisions. Without an advance health care directive in place, decision-making for you could be tricky, and your family could be forced into court in order to have a judge appoint someone to make decisions for you.

    HIPAA authorization
    Finally, a HIPAA authorization gives medical providers permission to talk to a person’s duly-appointed health care agents and anyone else the person wants to be privy to his or her health information. This permission is critical for actual decision-makers, because without it, a doctor can refuse to divulge anything about the person for whom decisions need to be made. Not a great position for the decision-makers to be in. They would have authority to make decisions, but no access to the specific information upon which decisions would be based. The patient may also want to give medical providers permission to talk with family members or others who do not have a decision-making role, but who the patient might nevertheless want to keep in the loop in the event of a hospitalization.

    Talk with your trusted advisers about getting these documents in place for yourself and your loved ones.

    SCOTT MAKUAKANE, Counselor at Law
    Focusing exclusively on estate planning and trust law.
    www.est8planning.com
    808-587-8227 | maku@est8planning.com

    There are three estate planning documents that every competent adult living in the State of Hawai‘i should have. Of course, “competency” can be an elusive quality, but once a Hawai‘i resident has turned 18, the law of our State presumes that person to be competent.

  • Mastering Change

    Class reunions are poignant reminders of change. With each passing year, our classmates grow a little grayer, perhaps a little balder, and maybe a little more expansive at the midsection. Good thing we are not like our classmates, right? Actually, we are. Father Time is catching up with all of us. That sobering fact should inspire us to reflect each year on our estate plans and whether they still do what we want them to do.

    No matter how well we plan, our estate plans are going to veer off course. It is impossible to predict when that will happen, but it will. Ironically, change is one of the few constants in our lives. If we want our estate plans to work when they are called upon, we need to review them at least annually and keep them as up-to-date as we can. Here’s why.

    The law changes

    Our estate plans are subject to federal, state, and county laws, regulations, and ordinances, not to mention court decisions. The government seems to love changing the rules on us. Keeping up with those changes is critical, but difficult for the average person who does not deal with the law and stay current with its variations. Thus, we should consult the folks who do stay on top of those things (our estate planning attorneys, financial planners, and certified public accountants) about the changes that may require revisions to our estate planning documents and, perhaps, the estate planning strategies that have worked for us in the past but are now inadequate.

    Our health changes

    Not to rub it in here, but with age can come changes that impact our ability to make sound decisions and handle assets for ourselves and our loved ones. About 70 percent of us are going to be completely incapacitated for some period in our lives, and we need to have safeguards in place to address those kinds of eventualities. As our health changes, our estate plans may need to change.

    Our financial situation changes

    Over time, as we acquire and divest ourselves of assets, the assumptions that underlie our estate plans may go out of date. For example, I may have removed my residence from my trust in order to secure a home equity line of credit. If I don’t remember to put it back into my trust after the credit line becomes effective, my home may need to go through probate before it can be passed on to my loved ones. That can come as an unpleasant — but preventable — surprise.

    Our relationships change

    If you are like most people, the list of people you trust to make decisions on your behalf has changed over the past 10 years. Wouldn’t it be a good idea for your estate plan to reflect your current list? Having the wrong trustee can turn out to be a disaster.

    Reviewing your estate plan annually is like changing the oil in your car or seeing your dentist every six months. You don’t have to do any of those things, but you will have much better outcomes if you do.

    SCOTT MAKUAKANE, Counselor at Law
    Focusing exclusively on estate planning and trust law.

    www.est8planning.com
    808-587-8227  |  maku@est8planning.com

    Class reunions are poignant reminders of change. With each passing year, our classmates grow a little grayer, perhaps a little balder, and maybe a little more expansive at the midsection. Good thing we are not like our classmates, right? Actually, we are. Father Time is catching up with all of us. That sobering fact should…

  • Distributions – Consider Two Standards

    As an estate planning attorney, I have the privilege of observing how families decide how to distribute their assets between and among their children. I have come to understand that there are two distinct standards that parents use to determine the gift.

    First, there is the standard of meeting needs. As parents, we observe the needs and wants of our children and do our best to meet both. One child might need or want a musical instrument because of their interest in music, and another child may need volleyball shoes as her interest is in volleyball. While the dollar worth of the musical instrument may not match the dollar worth of the volleyball shoes, we meet each child’s needs and wants equally. This standard parent is alive.

    It becomes difficult and near impossible to meet needs and wants once the parent dies, as they are no longer around to make those observations. At best, they can make an educated guess based on prior experience. However, situations change dramatically during the course of life, and what one needs or wants today could be entirely different tomorrow. Because of this uncertainty, many parents shift the standard from “needs and wants” to “equal worth” after they die.

    Often, parents think of their Last Will and Testament or Living Trust as the last letter to their children, and many children receive these as a statement of how much their parent loves them. And most parents want their children to know that they are loved equally.

    Stephen B. Yim, Attorney at Law
    2054 S. Beretania St., Honolulu HI 96826
    808-524-0251 | www.stephenyimestateplanning.com

    As an estate planning attorney, I have the privilege of observing how families decide how to distribute their assets between and among their children. I have come to understand that there are two distinct standards that parents use to determine the gift. First, there is the standard of meeting needs. As parents, we observe the…

  • Irrevocable Life Insurance Trust Benefits

    Including a trust that owns life insurance in your estate planning strategy can have the following benefits:

    MANAGEMENT. If you have a large estate and plan to pass a significant inheritance to children, an Irrevocable Life Insurance Trust (ILIT) enables you to appoint someone to manage the trust’s assets. The trustee you select could be an individual, such as one of your adult children, or a financial institution. Be sure to select someone qualified to manage significant assets.

    INCOME RATHER THAN PRINCIPAL. Many times, parents have one or more children who will not act responsibly if they receive a substantial or lump-sum inheritance, so they designate an insurance trust to receive the insurance proceeds. The trust holds and invests the trust assets and then pays income to the children, either for a specified number of years, with a lump-sum payout of the trust balance at the end of such term, or for the lives of the children. The trustee may also be given the discretion to distribute principal to the beneficiaries to cover education expenses or unanticipated healthcare or other needs.

    TAX SAVINGS. If your estate is more than the federal exemption, it may be subject to taxes at a very high rate. An ILIT is an attractive planning tool for individuals with taxable estates. The trust can be used to leave an inheritance to family that is exempt from federal estate and income taxes. For this reason, many people like to combine a charitable remainder trust (CRT) with an insurance trust. With the CRT, parents can fund a trust, tax-free, that pays them income for life and the ILIT will provide their children with an inheritance.

    National Kidney Foundation of Hawaii
    808-593-1515 | www.kidneyhi.org | www.kidney.org

    Including a trust that owns life insurance in your estate planning strategy can have the following benefits: MANAGEMENT. If you have a large estate and plan to pass a significant inheritance to children, an Irrevocable Life Insurance Trust (ILIT) enables you to appoint someone to manage the trust’s assets. The trustee you select could be…