(a) Regardless of whether the terms of a trust contain a spendthrift provision, the following rules shall apply:

will 560x170

Ask a will, trust or estate question, get an answer ASAP!
Thousands of highly rated, verified estate & trust lawyers.
Click here to chat with a lawyer about your rights.

Terms Used In Hawaii Revised Statutes 554D-505

  • Irrevocable trust: A trust arrangement that cannot be revoked, rescinded, or repealed by the grantor.
  • Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
  • Power of withdrawal: means a presently exercisable general power of appointment other than a power:

    (1) Exercisable by a trustee and limited by an ascertainable standard; or
    (2) Exercisable by another person only upon consent of the trustee or a person holding an adverse interest. See Hawaii Revised Statutes 554D-103
  • Probate: Proving a will
  • Property: means anything that may be the subject of ownership, whether real or personal, legal or equitable, or any interest therein. See Hawaii Revised Statutes 554D-103
  • Revocable trust: A trust agreement that can be canceled, rescinded, revoked, or repealed by the grantor (person who establishes the trust).
  • Settlor: means a person, including a testator, who creates, or contributes property to, a trust. See Hawaii Revised Statutes 554D-103
  • Spendthrift provision: means a term of a trust that restrains both voluntary and involuntary transfer of a beneficiary's interest. See Hawaii Revised Statutes 554D-103
  • Spouse: includes individuals who are married to each other and individuals who are reciprocal beneficiaries. See Hawaii Revised Statutes 554D-103
  • Terms of a trust: means :

    (1) Except as otherwise provided in paragraph (2), the manifestation of the settlor's intent regarding a trust's provisions as:
    (A) Expressed in the trust instrument; or
    (B) Established by other evidence that would be admissible in a judicial proceeding; or
    (2) The trust's provisions, as established, determined, or amended by:
    (A) A trustee or other person in accordance with applicable law;
    (B) A court order; or
    (C) A nonjudicial settlement agreement under section -111. See Hawaii Revised Statutes 554D-103
(1) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor’s creditors;
(2) Except as provided in chapter 554G, with respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor’s benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach shall not exceed the settlor’s interest in the portion of the trust attributable to that settlor’s contribution; and
(3) After the death of a settlor, and subject to the settlor’s right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the settlor’s death is subject to claims of the settlor’s creditors, costs of administration of the settlor’s estate, the expenses of the settlor’s funeral and disposal of remains, and statutory allowances to a surviving spouse or reciprocal beneficiary and children to the extent the settlor’s probate estate is inadequate to satisfy those claims, costs, expenses, and allowances.
(b) For purposes of this section:

(1) During the period the power may be exercised, the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power; and
(2) Upon the lapse, release, or waiver of the power, the holder is treated as the settlor of the trust only to the extent the value of the property affected by the lapse, release, or waiver exceeds the greater of the amount specified in section 2041(b)(2) or 2514(e) of the Internal Revenue Code of 1986, as amended, or section 2503(b) of the Internal Revenue Code of 1986, as amended, in each case as in effect on the effective date of this chapter.
(c) This section shall not apply to trusts created under chapter 554G.

  Previous
Next  
 Part V Contents