After a person dies, a properly appointed personal representative of the deceased person's estate may obtain copies of or authorize a health care provider to release copies of deceased person's medical records.
     However, according to Hawaii Revised Statutes Section 622-57, if a personal representative has not been appointed, then the deceased person's "next of kin" may obtain copies or authorize a health care provider to release copies of the deceased person's medical records subject to a couple exceptions.
     The deceased person's "next of kin" is defined in this order:
1) The spouse or reciprocal beneficiary;
2) An adult child;
3) Either parent;
4) An adult sibling;
5) A grandparent; and
6) A guardian at the time of death.
     Only the person who has superseding priority may make a request for the deceased person's medical record. A person claiming to be "next of kin" must submit to the medical provider an affidavit attesting to their status of "next of kin". A person has superseding priority when all kin ranked higher in the order above are deceased or incapacitated. Proof of the higher ranking kin being deceased or incapacitated will likely have to be provided.
     The medical provider may rely upon the affidavit and, in doing so, will be immune from any claims relating to the release of the medical records.

     When creating a retirement account such as a IRA, 401(k) or other defined benefit plan, an individual is usually (and hopefully) instructed to name at least one beneficiary to the account. Upon the individual's death, the beneficiary (if still alive) will then inherit the account balance without having to go through the probate process. 

     Sometimes, though, an individual forgets to review and update the beneficiary designations on their retirements accounts. If the primary and contingent beneficiaries predecease the individual or if there is no primary and/or contingent beneficiary listed, then usually the account will revert to the estate and be subject to probate.

     But, what happens to the retirement account if 1) no beneficiaries are named or have predeceased and 2) no personal representative is appointed to administer the decedent's estate?

     Hawaii Revised Statutes Section 523A-3(14) provides that any property in an individual retirement account, defined benefit plan, or other account or plan that is qualified for tax deferral under the Internal Revenue Code is presumed to be abandoned three years after the earlier of:

     (1) the distribution or attempted distribution of the property OR
    (2) the date of the required distribution as stated in the plan or trust agreement governing the plan, or as specified in the Interal Revenue Code by distribution shall be nade to avoid a tax penalty.

     This means the retirement account will be considered abandoned property and will eventually escheat to the State of Hawaii.

     As a general rule of thumb, one should review their estate plan every three to five years to determine whether life changes or new laws merit making revisions to their plan. As part of the estate plan review, one should also examine the beneficiary designations on their retirement accounts to ensure that their primary and contingent beneficiaries are updated and current.

     When a person dies, who has priority to be appointed the personal representative (also known as the executor) of the decedent's estate? A personal representative is a person (or entity) that has the authority to administer the decedent's estate. Generally speaking, this means paying off tax, funeral expenses, debts and distributing the remainder of the estate assets.
       Hawaii Revised Statutes Section 560:3-203 provides a list of interested persons who may be appointed as the personal representative to administer the estate. They are as follows from highest to lowest priority:

     (1)  The person with priority as determined by a probated will including a person nominated by a power conferred in a will;   
    (2)  The surviving spouse or reciprocal beneficiary of the decedent who is a devisee of the decedent;
     (3)  Other devisees of the decedent;
     (4)  The surviving spouse or reciprocal beneficiary of the decedent
     (5)  Other heirs of the decedent; and
     (6)  Forty-five days after the death of the decedent, any creditor.

     This list would apply in situations where a decedent died with a Will (testate) or without a Will (intestate).

     In addition to directing where and how a person's property is distributed upon their death, a Will allows a person to nominate an individual or corporation (such as a bank) to serve as the personal representative. Such a nomination would help avoid a situation where multiple parties may fight to be appointed the personal representative since they have equal priority to serve under Hawaii Revised Statutes Section 560:3-203.

     In a prior blog post, I reviewed what a power of attorney is and the types of power of attorney that are available depending on the situation. In April 2014, the Hawaii legislature passed the Hawaii Uniform Power of Attorney Act, which was codified in Hawaii Revised Statutes Chapter 551E. This new section replaces Hawaii Revised Statutes Chapter 551D, the Hawaii Uniform Durable Power of Attorney Act. Here are some highlights from the Hawaii Uniform Power of Attorney Act:
     1.  A power of attorney is now considered "durable" unless otherwise specified. In other words, it is effective even after the principal may be incapacitated.
     2.  An issue under the Hawaii Uniform Durable Power of Attorney Act was that a person who was presented with a power of attorney did not have to accept the power of attorney. Under the Hawaii Uniform Power of Attorney Act, a person who is presented with a power of attorney may ask that the agent  certify "any factual matter concerning the principal, agent, or power of attorney". If an agent refuses a request for a certification, the person presented with the power of attorney may decline to accept the document. However, if a power of attorney presented with a certification is still refused, the agent may seek a court order mandating acceptance of the power of attorney. This change provides another layer of protection for the person being presented with the power of attorney while also giving the agent recourse if a certified power of attorney is still not accepted.
     3.  Chapter 551D does not govern power of attorney for healthcare decisions. Those fall under Advance Health Care Directives. They also do not cover power of attorney for parents or legal guardians of a minor or disabled adult under another person.

     A person may contest a Will that is presented informally for probate.  Informal probate is a procedure where a Will is presented to the registrar (not a judge) for consideration. In other words, there is no hearing before a judge. The registrar will review the probate application and Will and determine whether to accept the Will and make an appointment of a personal representative.
     If the registrar does make an appointment of a personal representative through the informal probate procedure, then an interested person may initiate a formal proceeding (before a judge) to contest the appointment of the personal representative and the submission of the Will.

     An interested person may contest a Will before the first of the following to expire:

     1.   90 days after receiving notice of an informal proceeding

     2.   12 months from the date the Will was informally admitted to probate or

    3.   30 days from the entry of a formal order approving the accounts and settlement of the estate by an informally appointed personal representative.

     Also, a challenge may be commenced by an interested person after the expiration of the above-stated limitation periods if an informal probate is closed informally (meaning the closing of the probate matter is not approved by a judge, but rather by the personal representative filing a closing statement) and notice of the informal probate proceeding was not properly given. Furthermore, the challenge must be commenced within five years of the decedent's date of death.

     Your friends and/or relatives may have mentioned that they have set up a revocable trust and urged you to look into creating one as well. While a revocable trust is a powerful and flexible estate planning tool, it is not a one-size-fits-all solution.  I would caution engaging with an attorney who insists that creating a trust no matter what. Revocable trusts are more expensive to create than a simple Will, so an attorney may be motivated more by their pocketbook than looking out for your best interests.

     That being said, generally speaking, a revocable trust is a wonderful estate planning tool that everyone should be educated about, even if it may not be currently suitable for them. Below are some of the benefits of having a revocable trust.

     Avoiding Probate.  All property transferred to a revocable trust will avoid the probate process upon the decedent's death.  This means property may be held or distributed pursuant to the trust terms to beneficiaries without having to go through the court-supervised process known as probate. This is especially important for people who own real property since Hawaii probate law mandates that real property interests are subject to probate.

     Control. One can draft the terms of the revocable trust to distribute trust assets to beneficiary in stages. This may be useful for those who have minor children who cannot legally own property or adult beneficiaries who may lack financial management skills. If a minor is a beneficiary of an estate or other property (e.g. life insurance proceeds), then a conservator will need to be appointed to manage the property until the minor reaches the age of majority, which is 18 in Hawaii. A trust can provide asset management until the minor child is an appropriate age. For an adult beneficiary who may be at risk of frittering away their inheritance, a trust can provide asset management by placing a third-party trustee in control of the assets and distributing income and principal to the beneficiary at regular intervals and/or at the trustee's discretion.

     Asset Management.  A revocable trust can also provide asset management for the person who created the revocable trust if the person becomes incapacitated for some reason. A successor trustee can step into the shoes of the incapacitated person and have the authority to access accounts to pay bills and manage financial affairs until the person gains capacity or, if the person remains incapacitated, provide ongoing asset management.  

     Disposition of Assets Upon Death.  Like a Will, a revocable trust serves as a testamentary document and can determine how property is distributed upon a person's death. However, unlike a Will a revocable trust has many more features that may be useful depending on an individual's situation.     

      What happens when a personal representative cannot find any living heirs or devisees of a decedent? Hawaii Revised Statutes Section 531-33 provides a procedure for the disposition of property in this scenario.

     First, the personal representative will need to file a petition to have the estate's final accounts approved. Notice will need to be published in the newspaper for a period of not less than three consecutive weeks. All claimants for a distributive share of the estate then have 90 days from the date of first publication to present a claim to their share of the estate.

     If no claims are presented within the 90 days or if a portion of the estate remains unclaimed after this period, then after the court approves the settlement and accounts of the estate, the court or registrar may direct the personal representative to transfer the remainder of the property to the State Director of Finance.

     The State Director of Finance is then instructed to sell any property, if possible, at public auction. The proceeds are then held pursuant to Hawaii Revised Statutes Chapter 523A, which the unclaimed property law.

     According to Hawaii Revised Statutes Section 523A(15), generally speaking, property is presumed to be abandoned five years after the owner had a right to demand the property or after the obligation to pay or distribute the property arises.

     In Hawaii, under the Uniform Probate Code, a surviving spouse has a right of election against the decedent spouse's estate.  This will be explained in greater detail below, but for historical background, we will briefly discuss the related concepts of Dower and Curtesy.
     Up until 1977, a surviving spouse was given an automatic life estate equal to 1/3 interest in any real property owned by the decedent spouse.  For men, this was known as Curtesy and for women it was referred to as Dower.  Dower affected the husband's real property in that he could not convey his interest in real property without his wife signing off.  The wife, on the other hand, could convey her real property without needing her husband's signature.
     Dower and Curtesy was replaced in 1977 by the Hawaii Uniform Probate Code.  Under the UPC, the surviving spouse has the right to take an "elective share" of the augmented estate, which consists of both the decedent spouse and surviving spouse's estates.  The amount of the "elective share" is determined by the length of the marriage and is set out under Hawaii Revised Statutes Section 560:2-202.
     Generally speaking, the augmented estate consists of the following:

1. Decedent’s probate estate;
2. Value of the surviving spouse’s assets at decedent’s date of death, plus any property that would have been in the surviving spouse’s nonprobate transfers to others under Hawaii Revised Statute Section 560:2-205, had the surviving spouse been the decedent; and
3. Decedent’s nonprobate transfers to others, including

                 a.   Property owned in substance by the decedent (i.e. joint tenancy, revocable trust, etc.)
                 b.   Property in which the decedent retained the right to possession or enjoyment during his 
                       lifetime (i.e. life estates, retained income interest, etc; or
                 c.    Property over which the decedent retained a general power of appointment.
     The surviving spouse's elective share is in addition to the homestead allowance, exempt property and family allowance, as were discussed in a previous post.