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Finding out a loved one died without a will can raise a lot of uncertainty during a challenging time. Hawaii’s intestacy laws provide guidance for administering the estate and avenues to transferring those last assets, even when there’s no will.
If you find yourself dealing with the estate of a loved one, a good place to start is by evaluating whether probate is needed based on the size and type of assets the decedent left behind. Below, we review some options for smaller estates that can be faster and easier than going through full probate with the court.
Regardless of which probate method you choose, the probate process acts as a tool to help you wrap up your loved one’s estate by giving you or someone else the authority to transfer their assets.
Intestacy refers to the state of dying without a will, and probate is the process of transferring the assets that a decedent leaves behind.
When someone dies, any existing powers of attorney terminate, leaving nobody with authority to access, sell, or transfer the decedent's property. Hawaii's probate laws set several options for obtaining the needed authority to move assets. Ultimately, all assets should be out of the decedent's name after probate because a dead person can't own property.
A specific portion of the probate laws, the laws of intestacy, tell us how to distribute the decedent's property when there is no will. The intestacy laws allow for the orderly administration of the estate. Theoretically, it shouldn't matter who the personal representative is because they're charged with following those laws.
Hawaii's intestacy laws allow for inheritance by a surviving spouse or the decedent's legally adopted or biological relatives. Members of a class, like siblings, all inherit equally, regardless of their personal relationship with the decedent.
Even if the decedent failed to leave a will, it’s likely some of their assets will not be part of their probate estate and the laws of intestacy. Several types of property transfer to the beneficiary automatically upon the decedent’s death. The beneficiary needs no authority beyond proof of the decedent’s death and their own identity to effect the transfer.
Bank accounts, retirement and investment accounts, and life insurance policies are all common accounts subject to non-probate transfers. These types of accounts typically allow the owner to name a payable-on-death beneficiary. If the decedent failed to name a beneficiary, the account would become part of the probate estate.
Non-probate transfers also apply to real estate titled as joint tenants with the right of survivorship. The surviving co-owner owns the entire property upon the other co-owner’s death. Hawaii also recognizes transferable deeds at death, which name the beneficiary of a piece of real estate after the current owner’s death.
Hawaii provides several options for administering an intestate estate, depending on the size and the needs of the estate. Before opening a full probate case, consider whether one of the simplified methods applies to your situation to save time and money.
The easiest option for administering estate assets in Hawaii is using a small estate affidavit. Rather than filing a probate case with the court for the appointment of a personal representative, heirs can present the sworn affidavit to the person or entity holding estate assets.
In the affidavit, the heir will swear they have the right to distribute the property identified on the affidavit to the heirs named on it. The custodian of the asset can keep a copy of the affidavit as proof that they acted in good faith when turning over the decedent’s assets. They may also want a copy of the death certificate.
Estates worth less than $100,000 are eligible to proceed by affidavit. It can also transfer motor vehicle titles regardless of the estate value.
The small estate affidavit is the easiest option for heirs, and it allows them to manage the assets without going to court. Still, it can be challenging to take care of the entire estate's business with only the affidavit, and the affidavit requires all heirs to understand the laws of intestacy. A court order regarding estate administration often comes in handy, from dealing with stubborn bank employees to negotiating with creditors.
Heirs of small estates valued at $100,000 or less who need a court order can file for simplified probate without a will. The simplified probate procedure puts the estate administration on the fast track and allows for the expedited distribution of assets.
Under this procedure, the personal representative or clerk distributes the estate assets as early as 60 days after filing when the estate's assets total less than $10,000. For estates between $10,000 and $100,000, assets can be distributed after four months.
The simplified process provides faster results because there is no hearing. The clerk publishes a 60-day notice in the local newspaper, faster than traditional probate.
Hawaii adopted the Uniform Probate Code (“UPC”), following the same probate procedures as several other states. This includes recognizing three subsets of probate – informal, formal, and supervised probate.
In Hawaii, probate is the court’s process for appointing a personal representative to administer the estate.
The court can appoint a personal representative through informal probate without a hearing or a waiting and notice period. However, informal probate is only an option when the person applying to be a personal representative has priority for appointment.
Formal probate yields the same result as informal probate, but the appointment of the personal representative comes after a notice period to interested parties. The waiting period allows others to object to the appointment of the proposed personal representative. The court can either hold a hearing to determine the appointment or make the appointment as proposed if nobody objects.
Finally, supervised probate stands out as the most restrictive, expensive, and time-consuming type of probate. Under both informal and formal probate, the court takes a hands-off approach after the appointment of the personal representative. When an estate operates under supervised administration, the opposite is true – the personal representative must constantly update the court and request approval before taking action regarding the sale, use, or disbursement of estate assets.
The spouse or children of the decedent typically inherit in Hawaii. If the decedent left both children and a spouse, the two often split the estate. However, the spouse will inherit the lion’s share.
When someone dies without children or a spouse, the decedent’s parents will inherit their assets. When the decedent’s parents have already died, the intestacy laws turn to the decedent’s siblings.
The intestacy laws direct the personal representative to continue up the family tree to the grandparents’ generation when the decedent has no parents, siblings, spouse, or children. That can lead to the TV-like scenarios of distant, unknown cousins inheriting from someone they’ve never met.
The intestacy laws can easily be applied to the most basic and traditional family situations. For more complex scenarios, consult an experienced probate attorney for application to your unique situation.
The personal representative becomes responsible for administering the estate, which means transferring the assets to the new owners. Before giving away the estate’s assets to the heirs, it can take time for the personal representative to find and secure the assets, pay the estate’s bills, provide notice to creditors, and determine how to divide the remaining property.
Whether a spouse inherits the entire estate depends on the decedent’s family structure. The spouse can inherit the whole estate or split it with the decedent’s parents or children.
The surviving spouse inherits everything if the decedent had no descendants and no surviving parents or if all of the decedent’s descendants are also the spouse’s descendants – e.g., their children together.
When the decedent had children with someone other than the spouse, the spouse inherits $100,000 plus 50% of the remainder of the estate. The children inherit the balance.
The spouse also inherits a diminished amount if they have children from another relationship and children with the decedent. The spouse gets $150,000 plus 50% of the remainder. Again, the children inherit the balance.
When no children are involved, but the decedent’s parents are still alive, the parents get a small portion of the estate. The spouse receives the first $200,000 plus 75% of the rest of the estate. The parents inherit the rest.
The length of time it takes to administer an estate fully depends on several factors, including the size and complexity of the estate, the skill and experience of the personal representative, and whether there is conflict between the heirs and the personal representative.
The state does not set a minimum time to administer an estate, but the probate process does come with a few built-in delays. One is the period of notice to the creditors, which prevents creditors from coming back later to get money from the estate or heirs. The second is tax filing. If the personal representative needs to file taxes on behalf of the decedent or the estate, they may have to wait until the IRS opens filing season to finalize that task.
Several options exist for avoiding probate in Hawaii. Through estate planning, people can construct a web of non-probate transfers through beneficiary designations and trusts that leave nothing left in their probate estate.
If your loved one died without a will or other form of estate planning, you might be able to avoid the full probate process by using the small estate affidavit or the simplified probate procedure to transfer property.
Next of kin depends on who the decedent left behind at the time of their death. In general, priority flows from the surviving spouse to children and other descendants, to the decedent’s parents, followed by siblings, and if necessary, grandparents, aunts and uncles, and then cousins and cousins’ descendants.
The personal representative can collect “reasonable compensation” for their work on behalf of the estate. Of course, they can also choose to waive compensation, but if they collect it, the fees come from the estate itself. Personal representative fees come out of the estate before distributions to heirs.
The reasonableness of the compensation is heavily dependent on the standard fee that other personal representatives in the area charge. The skill, experience, and qualifications also influence compensation.
Intestacy laws try to create consistency and fairness. Still, they are a one-size-fits-all approach to what can be complicated family dynamics and relationships that aren’t always recognized by the law.
Many people think they don’t need a will because they don’t have many assets or assume their spouse will inherit everything. Depending on your family’s makeup, that may not be the case. To ensure your belongings go where you intend and support those you care about most, make a will or engage in other estate planning.
