There is a new estate planning tool, a Revocable Transfer on Death Deed, that is available for use in Hawaii as an alternative to a revocable trust. Enacted into law in 2011, Hawaii now permits the use of the Transfer on Death Deed, which permits a property owner to designate one or more beneficiaries to his or her property. When a owner dies, the property automatically vests in the name of the designated beneficiary, without the necessity of a probate proceeding. For a property owned by multiple owners, like a husband and wife, the Transfer on Death Deed can also specify that the beneficiary will only receive the property on the death of the surviving owner.
Similar to a trust, a Transfer on Death Deed is revocable and can be changed at any time during the lifetime of the owner or owners. In order for the change to be effective, a new Transfer on Death Deed needs to be recorded or the old Transfer on Death Deed revoked. A Transfer on Death Deed is also likely to be much less expensive than creating a trust and does not require the consent of a mortgage lender.
The Transfer on Death Deed does have its limitations, however. Unlike a trust, the property generally cannot be transferred with any strings attached as can be done with a trust. A Transfer on Death Deed may also not be advisable if you have a large estate and tax planning is necessary. A Transfer on Death Deed also does not protect the property from nursing home costs as you retain title until the time of your passing.
If you would like to see if a Transfer on Death Deed will work for you or its time to review your existing estate planning documents, give Ng & Niebling, LLLC in Honolulu a call. For more than four decades, this estate planning firm has helped families throughout Hawaii with their estate planning needs. To request an estate planning consultation, visit their website or call (808) 732-7788.