(a) Definitions. In this section:
“Alternative future interest” means an expressly created future interest that can take effect in possession or enjoyment instead of another future interest on the happening of one or more events, including survival of an event or failure to survive an event, whether an event is expressed in condition-precedent, condition-subsequent, or any other form. A residuary clause in a will does not create an alternative future interest with respect to a future interest created in a nonresiduary devise in the will, whether or not the will specifically provides that lapsed or failed devises are to pass under the residuary clause.
“Beneficiary” means the beneficiary of a future interest and includes a class member if the future interest is in the form of a class gift.
“Class member” includes an individual who fails to survive the distribution date but who would have taken under a future interest in the form of a class gift had the individual survived the distribution date.
“Distribution date”, with respect to a future interest, means the time when the future interest is to take effect in possession or enjoyment. The distribution date need not occur at the beginning or end of a calendar day, but can occur at a time during the course of a day.
“Future interest” includes an alternative future interest and a future interest in the form of a class gift.
“Future interest under the terms of a trust” means a future interest that was created by a transfer creating a trust or to an existing trust or by an exercise of a power of appointment to an existing trust, directing the continuance of an existing trust, designating a beneficiary of an existing trust, or creating a trust.
“Surviving beneficiary” or “surviving descendant” means a beneficiary or a descendant who neither predeceased the distribution date nor is deemed to have predeceased the distribution date under § 560:2-702.
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Terms Used In Hawaii Revised Statutes 560:2-707
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Codicil: An addition, change, or supplement to a will executed with the same formalities required for the will itself.
- Continuance: Putting off of a hearing ot trial until a later time.
- Devise: To gift property by will.
- Donee: The recipient of a gift.
- Donor: The person who makes a gift.
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Inter vivos: Transfer of property from one living person to another living person.
As used in this subsection, “surviving descendants of the deceased beneficiaries” means the descendants of deceased beneficiaries or class members who would take under a class gift created in the trust.
(c) More than one substitute gift; which one takes. If, under subsection (b), substitute gifts are created and not superseded with respect to more than one future interest and the future interests are alternative future interests, one to the other, the determination of which of the substitute gifts takes effect is resolved as follows:
(1) Except as provided in paragraph (2), the property passes under the primary substitute gift;
(2) If there is a younger-generation future interest, the property passes under the younger-generation substitute gift and not under the primary substitute gift;
(3) In this subsection:
“Primary future interest” means the future interest that would have taken effect had all the deceased beneficiaries of the alternative future interests who left surviving descendants survived the distribution date.
“Primary substitute gift” means the substitute gift created with respect to the primary future interest.
“Younger-generation future interest” means a future interest that:
(A) Is to a descendant of a beneficiary of the primary future interest;
(B) Is an alternative future interest with respect to the primary future interest;
(C) Is a future interest for which a substitute gift is created; and
(D) Would have taken effect had all the deceased beneficiaries who left surviving descendants survived the distribution date except the deceased beneficiary or beneficiaries of the primary future interest.
“Younger-generation substitute gift” means the substitute gift created with respect to the younger-generation future interest.
(d) If no other takers, property passes under residuary clause or to transferor’s heirs. Except as provided in subsection (e), if, after the application of subsections (b) and (c), there is no surviving taker, the property passes in the following order:
(1) If the trust was created in a nonresiduary devise in the transferor’s will or in a codicil to the transferor’s will, the property passes under the residuary clause in the transferor’s will; for purposes of this section, the residuary clause is treated as creating a future interest under the terms of a trust;
(2) If no taker is produced by the application of paragraph (1), the property passes to the transferor’s heirs under section 560:2-711.
(e) If no other takers and if future interest created by exercise of power of appointment. If, after the application of subsections (b) and (c), there is no surviving taker and if the future interest was created by the exercise of a power of appointment:
(1) The property passes under the donor‘s gift-in-default clause, if any, which clause is treated as creating a future interest under the terms of a trust; and
(2) If no taker is produced by the application of paragraph (1), the property passes as provided in subsection (d). For purposes of subsection (d), “transferor” means the donor if the power was a nongeneral power and means the donee if the power was a general power.
(f) Notwithstanding the foregoing, if a revocable inter vivos trust terminates on the death of the settlor of the trust and all the assets are to be distributed outright, sections 560:2-603 and 560:2-604 shall determine whether a gift has lapsed and who shall receive the property.
