Hawaii has adopted the Uniform Trust Code, providing a modern framework for trust administration. The state imposes a state estate tax with an exemption of $5.49 million, and its top estate tax rate of 20% is tied with Washington for the highest in the nation. Hawaii's estate tax is portable between spouses, which provides some planning flexibility. The Hawaii Trust Code is found in the Hawaii Revised Statutes.
This guide applies to both revocable and irrevocable trusts in Hawaii.
Where Hawaii trust law lives
Hawaii's trust statutes are part of the Hawaii Revised Statutes. The code follows the standard UTC structure. Hawaii has also adopted directed trust provisions.
Accounting and notice requirements
Hawaii follows the standard UTC notice framework. Trustees must notify qualified beneficiaries within 60 days of accepting trusteeship of an irrevocable trust. Annual accounting to qualified beneficiaries is required under the default rules. While the trust is revocable and the trust creator is alive and competent, the trustee's duties run primarily to the trust creator.
Trustee duties
Hawaii trustees must administer the trust in good faith, following the trust's terms and purposes, and in the interests of the beneficiaries. All standard UTC duties apply. Compensation follows the trust instrument first, with reasonable compensation as the default.
What makes Hawaii different
State estate tax with the highest top rate. Hawaii's estate tax has an exemption of $5.49 million per individual with rates that go up to 20%, tied with Washington State for the highest top rate in the country. The estate tax is progressive, meaning higher-value estates pay higher rates. Estates worth more than $10 million face the 20% top rate. This makes trust-based estate planning especially important for Hawaii families with substantial assets, particularly given Hawaii's high real estate values.
Portable estate tax exemption. Unlike DC, Hawaii's estate tax exemption is portable between spouses. This means a married couple can effectively shelter up to $10.98 million. Portability provides flexibility, but many planners still recommend trust-based structures to maximize both spouses' exemptions.
No inheritance tax. Hawaii does not impose an inheritance tax. Only the estate tax applies. Beneficiaries receive their inheritance without a separate state tax on the receipt.
High real estate values. Hawaii's real estate market means that even a single-family home can represent a significant portion of an estate. Many Hawaii families find themselves affected by the state estate tax primarily because of real property values. This makes trust planning relevant for homeowners who might not consider themselves wealthy.
Standard UTC modification tools. Hawaii provides nonjudicial settlement agreements, court modification for changed circumstances, and modification by consent.
TrustHelm tip: Hawaii's high estate tax rates and high real estate values mean your home alone could push your estate over the exemption threshold. TrustHelm's asset tracking features can help you understand your total estate value and plan proactively.
The most common Hawaii trust mistakes
Not funding the trust. As in every state, the most common mistake is failing to transfer assets, especially real property, into the trust.
Underestimating the estate tax impact. Hawaii's $5.49 million exemption combined with the nation's highest top rate (20%) can create a significant tax bill for estates above the threshold. Hawaii's expensive real estate market means more families are affected than might expect.
Missing the 60-day notice deadline. When a trust becomes irrevocable, the trustee must notify qualified beneficiaries within 60 days.
Not providing annual accountings. Regular accountings protect the trustee and keep beneficiaries informed.
When to talk to an attorney
You should consult a Hawaii trust attorney if you need help planning around the state estate tax, if you own significant real property in Hawaii, if you have been named as trustee and need to understand your obligations, or if you need to modify a trust to address changed circumstances.
If you need help finding a qualified estate planning attorney in your area, visit TrustHelm's Find an Attorney tool.
This guide is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for decisions about your trust.