Honolulu, Hawaii
                                                     , 1999

                                   RE:  S.B. No. 634

Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 1999
State of Hawaii


     Your Committee on Judiciary, to which was referred S.B. No.
634 entitled: 


begs leave to report as follows:

     The purpose of this bill is to permit the establishment of a
spendthrift trust with the settlor as a beneficiary, to clarify
the circumstances in which spendthrift and other trusts may be
challenged, and to require local trustees and local
administration of Hawaii trusts.

     Your Committee finds that several other states, most notably
Alaska and Delaware, have recently passed laws allowing greater
flexibility in trust formation as an effort to make themselves
attractive locations for trust business.  Your Committee further
finds that many trust settlors form off-shore trusts to take
advantage of estate planning tools that have been traditionally
unavailable in their own jurisdictions.  While no state can offer
all the attractions of off-shore jurisdictions, such as no
taxation and absolute protection from creditors, states do have
the advantage of stable, secure governments.  Your Committee
believes that this measure will provide increased flexibility in
Hawaii's trust laws, making Hawaii more attractive as an estate
planning jurisdiction, while retaining the safeguards against
fraudulent transfer that are an important part of Hawaii law.

     No testimony was received on this measure.

                                   STAND. COM. REP. NO. 343
                                   Page 2

     As affirmed by the record of votes of the members of your
Committee on Judiciary that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
634 and recommends that it pass Second Reading and be referred to
the Committee on Ways and Means.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Judiciary,

                                   AVERY B. CHUMBLEY, Co-Chair

                                   MATTHEW M. MATSUNAGA, Co-Chair