This month Hawaii eliminated its 1% excise tax on all asset protection transfers and eliminated its trust rule that limited trusts to 25% of the grantor’s net worth. The eliminated trust rule also disallowed trusts from holding assets other than marketable securities or cash. The state’s new trust code now allows, among other things, the appointment of outside advisors by the grantor. If the trusts allows, these advisors can remove and appoint trustees at will, make veto distributions, and direct trustee investment decisions.
Many estate planners from around the country claim that Hawaii’s recent asset protection changes are “a step in the right direction.” Other attorneys have been quick to point out, however, that though Hawaii’s asset protection rules have improved, Hawaii is still not on par with other states when it comes to asset protection.
Scott Martin, Hawaii Amends New Asset Protection Law in Bid to Grab Trusts from Other States, The Trust Advisor, Jul. 5, 2011.
