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Power of Attorney in Hawaii - An Overview

1/27/2012

A "power of attorney" is a legal document in which a person (the "principal") appoints another as his or her "attorney-in-fact". The attorney-in-fact has the authority to do those acts that are specified in the power of attorney. The terms of a power of attorney can be drafted to give the attorney-in-fact the authority to act for the principal in a broad range of circumstances. This is called a "general power of attorney". On the other hand, the power of attorney may be narrowly drafted and only apply to a specific set of situations (e.g. executing real estate documents). This is called a "special power of attorney". In Hawaii, Hawaii Revised Statutes Chapter 551D embodies the Uniform Durable Power of Attorney Act, which provides guidance on how a power of attorney should be treated.
While the differences between a "general power of attorney" and "special power of attorney" refer to the scope of authority given to the attorney-in-fact, when a power of attorney becomes effective and when it terminates are also important distinctions to consider.
Regular Power of Attorney: Generally speaking, a power of attorney ceases to become effective when the principal becomes incapacitated. A power of attorney can also be given a termination date (e.g. authority terminates one year after signing). However, a power of attorney can remain effective and survive the principal's incapacity if it contains language that makes it "durable".
Durable Power of Attorney: A durable power of attorney is effective immediately, but the main distinction is that it remains effective even upon the principal's incapacity. A durable power of attorney must contain language that states that it will not terminate upon the principal's incapacity.
Durable Springing Power of Attorney: A "springing" power of attorney only becomes effective upon the occurrence of an event, usually when the principal is deemed incapacitated. Therefore, an attorney-in-fact usually cannot use the power of attorney unless is is accompanied by a physician's letter or court order attesting to the principal's incapacity.
"Limited" or "Special" Power of Attorney: A power of attorney can be modified and tailored to a give a person authority to only act in a particular situation. A limited or special power of attorney can limit the time the authority is effective and restrict the authority bestowed upon the agent. An example would be giving a person a special power of attorney to sign documents for a real estate transaction.
A power of attorney is revoked upon the death of the principal, but it can also be revoked by giving notice to the attorney-in-fact. It is generally sound practice to have a written revocation drafted and given to the attorney-in-fact and any institutions that may have been given a copy of the power of attorney. It is important to note that under Hawaii Revised Statutes Section 551D-4(a), the death of a principal does not revoke or terminate the authority of an attorney-in-fact who does not have actual notice of the principal's death. Therefore, if an attorney-in-fact acts after the principal's death, but he or she does not have actual knowledge of the principal's death, the attorney-in-fact's act will bind the principal's successors-in-interest.
As you have probably surmised, a power of attorney is a powerful document that has the potential to be easily abused. In Hawaii, as elsewhere, there has been an increase of financial abuse involving powers of attorney. Given Hawaii's large and growing elderly population, people must be vigilant about such exploitation and cautious about who they themselves select as their attorney-in-fact.
At the same time, a power of attorney does have its limitations. In Hawaii, there is no statutory requirement that anyone or any institution accept a power of attorney. For example, banks in Hawaii sometimes prefer that their forms be used if the power of attorney presented does not have language that they are comfortable with.
Still, a power of attorney is an essential document in any estate plan because it can be used as a cost-effective alternative to a conservatorship and serves as a useful backup document in the event non-trust assets require management.

"Intestate Succession" in Hawaii - Dying without a Will

1/13/2012

When a person dies without having made a will, the person is said to have died "intestate". So, what happens to the property of a person who has died intestate? In Hawaii, the law provides a default distribution scheme by which the estate will be distributed. Specifically, Hawaii Revised Statutes Section 560:2-101 to 103 governs intestate succession. It is also important not to forget that the estate of a person who died intestate will have to go through probate.
That being said, the fate of a decedent's assets depends on the decedent's familial situation at the time of his or her death. Did the decedent leave a surviving spouse or reciprocal beneficiary? Children from another marriage? No children? Are his or her parents still alive? Below is a brief summary outlining the intestacy statute, which provides for a variety of situations. For brevity and simplicity's sake, "reciprocal beneficiary" is omitted from the examples below, but can be interchanged with "surviving spouse".
A decedent's entire estate will go to the surviving spouse in these situations:

Decedent was not survived by any children or his or her parents; or
There are surviving children who are the natural descendants of both the decedent and surviving spouse. Also, the surviving spouse cannot have any living children who were not from the decedent (i.e. surviving spouse cannot have any living children from another relationship).

The first $200,000 and 3/4ths of any balance of the estate will go to the surviving spouse if:

Decedent did not leave any surviving children, but at least one of the decedent's parents is alive. The parents will take 1/4th of any balance of the estate.

The first $150,000 and 1/2 of any balance of the estate will go to the surviving spouse if:

All of the decedent's surviving children are also the children of the surviving spouse, but the surviving spouse has children who are not the decedent's (e.g. surviving spouse has children from another relationship). Decedent's surviving children will share any balance of the estate equally.

The first $100,000 and 1/2 of any balance of the estate will go to the surviving spouse if:

The decedent left one or more surviving children who are not the children of the surviving spouse (e.g. Decedent had children from another relationship). Decedent's surviving children will share any balance of the estate equally.

But what happens if the decedent was not married or is a widow/widower? Again, it depends on the decedent's familial situation at the time of death. Below is a summary of the priorities of takers of an estate if the decedent did not leave a surviving spouse.

Decedent's surviving children (e.g. children born out-of-wedlock or children from prior marriage); if none, then...
Decedent's surviving parents (to both equally or to all to the surviving parent); if none, then...
Decedent's siblings or their children; if none, then...
1/2 to maternal grandparents or their descendants and 1/2 to paternal grandparents or their descendants; if there are no takers on either the maternal or paternal side, the other side will take the other half; if none then...
State of Hawaii.

As you can see, in order for the decedent's property to escheat to the State of Hawaii a decedent basically has to have no living relatives (or at least none that can be located). However, some people are not comfortable with the idea of their assets being distributed to distant, unknown relatives and would rather have, for example, a charitable organization benefit from their estate. If you do not agree with this default distribution scheme, but do not have a Will or Trust, it is imperative that you visit an attorney as soon as possible to have a testamentary instrument drafted so that your wishes will preempt the Hawaii intestate statute.

Power of Attorney in Hawaii - An Overview

"Intestate Succession" in Hawaii - Dying without a Will

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