Authorizes trustees to split a trust into separate trusts for
administration or tax purposes.  Streamlines transfer of
unclaimed assets from a personal representative or trustee to the
State.  Apportions expenses incurred in the determination of
apportionment of estate taxes.  Raises threshold for
classification as a small estate from $60,000 to $100,000.
(HB2646 HD1)

HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 554A-3, Hawaii Revised Statutes, is
 2 amended by amending subsection (c) to read as follows:
 3      "(c)  A trustee has the power, subject to subsections (a)
 4 and (b):
 5      (1)  To collect, hold, and retain trust assets received from
 6           a trustor until, in the judgment of the trustee,
 7           disposition of the assets should be made;
 8      (2)  To receive additions to the assets of the trust;
 9      (3)  To continue or participate in the operation of any
10           business or other enterprise, and to effect
11           incorporation, dissolution, or other change in the form
12           of the organization of the business or enterprise;
13      (4)  To invest and reinvest trust assets in accordance with
14           the provisions of the trust or as provided by law;
15      (5)  To deposit trust funds in a bank;
16      (6)  To acquire or dispose of an asset, for cash or on
17           credit, at public or private sale; and to manage,
18           develop, improve, exchange, partition, change the
19           character of, or abandon a trust asset or any interest

Page 2                                                     2646
                                     H.B. NO.           H.D. 1

 1           therein; and to encumber, mortgage, or pledge a trust
 2           asset for a term within or extending beyond the term of
 3           the trust, in connection with the exercise of any power
 4           vested in the trustee;
 5      (7)  To make ordinary or extraordinary repairs or
 6           alterations in buildings or other structures, to
 7           demolish any improvements, to raze existing or erect
 8           new party walls or buildings;
 9      (8)  To subdivide, develop, or dedicate land to public use;
10           or to make or obtain the vacation of plats and adjust
11           boundaries; or to adjust differences in valuation on
12           exchange or partition by giving or receiving
13           consideration; or to dedicate easements to public use
14           without consideration;
15      (9)  To enter for any purpose into a lease as lessor or
16           lessee with or without option to purchase or renew for
17           a term within or extending beyond the term of the
18           trust;
19     (10)  To enter into a lease or arrangement for exploration
20           and removal of minerals or other natural resources or
21           enter into a pooling or unitization agreement;
22     (11)  To grant an option involving disposition of a trust
23           asset, or to take an option for the acquisition of any
24           asset;

Page 3                                                     2646
                                     H.B. NO.           H.D. 1

 1     (12)  To vote a security, in person or by general or limited
 2           proxy;
 3     (13)  To pay calls, assessments, and any other sums
 4           chargeable or accruing against or on account of
 5           securities;
 6     (14)  To sell or exercise stock subscription or conversion
 7           rights; to consent, directly or through a committee or
 8           other agent, to the reorganization, consolidation,
 9           merger, dissolution, or liquidation of a corporation or
10           other business enterprise;
11     (15)  To hold a security in the name of a nominee or in other
12           form without disclosure of the trust, so that title to
13           the security may pass by delivery, but the trustee is
14           liable for any act of the nominee in connection with
15           the stock so held;
16     (16)  To insure the assets of the trust against damage or
17           loss, and the trustee against liability with respect to
18           third persons;
19     (17)  To borrow money to be repaid from trust assets or
20           otherwise; to advance money for the protection of the
21           trust, and for all expenses, losses, and liabilities
22           sustained in the administration of the trust or because
23           of the holding or ownership of any trust assets, for

Page 4                                                     2646
                                     H.B. NO.           H.D. 1

 1           which advances with any interest the trustee has a lien
 2           on the trust assets as against the beneficiary;
 3     (18)  To pay or contest any claim; to settle a claim by or
 4           against the trust by compromise, arbitration, or
 5           otherwise; and to release, in whole or in part, any
 6           claim belonging to the trust to the extent that the
 7           claim is uncollectible;
 8     (19)  To pay taxes, assessments, compensation of the trustee,
 9           and other expenses incurred in the collection, care,
10           administration, and protection of the trust;
11     (20)  To allocate items of income or expense to either trust
12           income or principal, as provided by chapter 557, the
13           Revised Uniform Principal and Income Act, including
14           creation of reserves out of income for depreciation,
15           obsolescence, or amortization, or for depletion in
16           mineral or timber properties;
17     (21)  To pay any sum distributable to a beneficiary under
18           legal disability, without liability to the trustee, by
19           paying the sum to the beneficiary or by paying the sum
20           for the use of the beneficiary either to a legal
21           representative appointed by the court, or if none, to a
22           relative;

Page 5                                                     2646
                                     H.B. NO.           H.D. 1

 1     (22)  To effect distribution of money and property (that may
 2           be made in kind on a pro rata or non-pro rata basis),
 3           in divided or undivided interests, and to adjust
 4           resulting differences in valuation;
 5     (23)  To employ persons, including attorneys, auditors,
 6           investment advisors, or agents, even if they are
 7           associated with the trustee, to advise or assist the
 8           trustee in performance of the trustee's administrative
 9           duties; to act without independent investigation upon
10           their recommendations; and instead of acting
11           personally, to employ one or more agents to perform any
12           act of administration, whether or not discretionary;
13     (24)  To prosecute or defend actions, claims, or proceedings
14           for the protection of trust assets and of the trustee
15           in the performance of trustee duties; [and]
16     (25)  To execute and deliver all instruments which will
17           accomplish or facilitate the exercise of the powers
18           vested in the trustee[.]; and
19     (26)  To divide, sever, or separate a single trust into two
20           or more separate trusts for administration or tax
21           purposes, including the allocation of the generation-
22           skipping transfer exemption; provided the terms of the

Page 6                                                     2646
                                     H.B. NO.           H.D. 1

 1           new trust provide, in the aggregate, for the same
 2           succession of interests and beneficiaries as are
 3           provided in the original trust."
 4      SECTION 2.  Section 560:2-707, Hawaii Revised Statutes, is
 5 amended to read as follows:
 6      "560:2-707  Survivorship with respect to future interests
 7 under terms of trust; substitute takers.(a)  Definitions.  In
 8 this section:
 9      "Alternative future interest" means an expressly created
10 future interest that can take effect in possession or enjoyment
11 instead of another future interest on the happening of one or
12 more events, including survival of an event or failure to survive
13 an event, whether an event is expressed in condition-precedent,
14 condition-subsequent, or any other form.  A residuary clause in a
15 will does not create an alternative future interest with respect
16 to a future interest created in a nonresiduary devise in the
17 will, whether or not the will specifically provides that lapsed
18 or failed devises are to pass under the residuary clause.
19      "Beneficiary" means the beneficiary of a future interest and
20 includes a class member if the future interest is in the form of
21 a class gift.
22      "Class member" includes an individual who fails to survive
23 the distribution date but who would have taken under a future

Page 7                                                     2646
                                     H.B. NO.           H.D. 1

 1 interest in the form of a class gift had the individual survived
 2 the distribution date.
 3      "Distribution date", with respect to a future interest,
 4 means the time when the future interest is to take effect in
 5 possession or enjoyment.  The distribution date need not occur at
 6 the beginning or end of a calendar day, but can occur at a time
 7 during the course of a day.
 8      "Future interest" includes an alternative future interest
 9 and a future interest in the form of a class gift.
10      "Future interest under the terms of a trust" means a future
11 interest that was created by a transfer creating a trust or to an
12 existing trust or by an exercise of a power of appointment to an
13 existing trust, directing the continuance of an existing trust,
14 designating a beneficiary of an existing trust, or creating a
15 trust.
16      "Surviving beneficiary" or "surviving descendant" means a
17 beneficiary or a descendant who neither predeceased the
18 distribution date nor is deemed to have predeceased the
19 distribution date under section 560:2-702.
20      (b)  Survivorship required; substitute gift.  A future
21 interest under the terms of a trust executed after January 1,
22 1997 is contingent on the beneficiary's surviving the

Page 8                                                     2646
                                     H.B. NO.           H.D. 1

 1 distribution date.  If a beneficiary of a future interest under
 2 the terms of a trust fails to survive the distribution date, the
 3 following apply:
 4      (1)  Except as provided in paragraph (4), if the future
 5           interest is not in the form of a class gift and the
 6           deceased beneficiary leaves surviving descendants, a
 7           substitute gift is created in the beneficiary's
 8           surviving descendants.  They take by representation the
 9           property to which the beneficiary would have been
10           entitled had the beneficiary survived the distribution
11           date;
12      (2)  Except as provided in paragraph (4), if the future
13           interest is in the form of a class gift, other than a
14           future interest to "issue", "descendants", "heirs of
15           the body", "heirs", "next of kin", "relatives", or
16           "family", or a class described by language of similar
17           import, a substitute gift is created in the surviving
18           descendants of any deceased beneficiary.  The property
19           to which the beneficiaries would have been entitled had
20           all of them survived the distribution date passes to
21           the surviving beneficiaries and the surviving
22           descendants of the deceased beneficiaries.  Each
23           surviving beneficiary takes the share to which the

Page 9                                                     2646
                                     H.B. NO.           H.D. 1

 1           surviving beneficiary would have been entitled had the
 2           deceased beneficiaries survived the distribution date.
 3           Each deceased beneficiary's surviving descendants who
 4           are substituted for the deceased beneficiary take by
 5           representation the share to which the deceased
 6           beneficiary would have been entitled had the deceased
 7           beneficiary survived the distribution date.  For the
 8           purposes of this paragraph, "deceased beneficiary"
 9           means a class member who failed to survive the
10           distribution date and left one or more surviving
11           descendants;
12      (3)  For the purposes of section 560:2-701, words of
13           survivorship attached to a future interest are not, in
14           the absence of additional evidence, a sufficient
15           indication of an intent contrary to the application of
16           this section.  Words of survivorship include words of
17           survivorship that relate to the distribution date or to
18           an earlier or an unspecified time, whether those words
19           of survivorship are expressed in condition-precedent,
20           condition-subsequent, or any other form;
21      (4)  If a governing instrument creates an alternative future
22           interest with respect to a future interest for which a
23           substitute gift is created by paragraph (1) or (2), the

Page 10                                                    2646
                                     H.B. NO.           H.D. 1

 1           substitute gift is superseded by the alternative future
 2           interest only if an expressly designated beneficiary of
 3           the alternative future interest is entitled to take in
 4           possession or enjoyment.
 5      (c)  More than one substitute gift; which one takes.  If,
 6 under subsection (b), substitute gifts are created and not
 7 superseded with respect to more than one future interest and the
 8 future interests are alternative future interests, one to the
 9 other, the determination of which of the substitute gifts takes
10 effect is resolved as follows:
11      (1)  Except as provided in paragraph (2), the property
12           passes under the primary substitute gift;
13      (2)  If there is a younger-generation future interest, the
14           property passes under the younger-generation substitute
15           gift and not under the primary substitute gift;
16      (3)  In this subsection:
17                "Primary future interest" means the future
18           interest that would have taken effect had all the
19           deceased beneficiaries of the alternative future
20           interests who left surviving descendants survived the
21           distribution date.
22                "Primary substitute gift" means the substitute
23           gift created with respect to the primary future
24           interest.

Page 11                                                    2646
                                     H.B. NO.           H.D. 1

 1                "Younger-generation future interest" means a
 2           future interest that:
 3                (A)  Is to a descendant of a beneficiary of the
 4                     primary future interest;
 5                (B)  Is an alternative future interest with
 6                     respect to the primary future interest;
 7                (C)  Is a future interest for which a substitute
 8                     gift is created; and
 9                (D)  Would have taken effect had all the deceased
10                     beneficiaries who left surviving descendants
11                     survived the distribution date except the
12                     deceased beneficiary or beneficiaries of the
13                     primary future interest.
14                "Younger-generation substitute gift" means the
15           substitute gift created with respect to the younger-
16           generation future interest.
17      (d)  If no other takers, property passes under residuary
18 clause or to transferor's heirs.  Except as provided in
19 subsection (e), if, after the application of subsections (b) and
20 (c), there is no surviving taker, the property passes in the
21 following order:
22      (1)  If the trust was created in a nonresiduary devise in
23           the transferor's will or in a codicil to the
24           transferor's will, the property passes under the

Page 12                                                    2646
                                     H.B. NO.           H.D. 1

 1           residuary clause in the transferor's will; for purposes
 2           of this section, the residuary clause is treated as
 3           creating a future interest under the terms of a trust;
 4      (2)  If no taker is produced by the application of paragraph
 5           (1), the property passes to the transferor's heirs
 6           under section 560:2-711.
 7      (e)  If no other takers and if future interest created by
 8 exercise of power of appointment.  If, after the application of
 9 subsections (b) and (c), there is no surviving taker and if the
10 future interest was created by the exercise of a power of
11 appointment:
12      (1)  The property passes under the donor's gift-in-default
13           clause, if any, which clause is treated as creating a
14           future interest under the terms of a trust; and
15      (2)  If no taker is produced by the application of paragraph
16           (1), the property passes as provided in subsection (d).
17           For purposes of subsection (d), "transferor" means the
18           donor if the power was a nongeneral power and means the
19           donee if the power was a general power. 
20      (f)  Notwithstanding the foregoing, if a revocable inter
21 vivos trust terminates on the death of the settlor of the trust
22 and all the assets are to be distributed outright, sections
23 560:2-603 and 560:2-604 shall determine whether a gift has lapsed
24 and who shall receive the property."

Page 13                                                    2646
                                     H.B. NO.           H.D. 1

 1      SECTION 3.  Section 560:3-905, Hawaii Revised Statutes, is
 2 amended to read as follows:
 3      "560:3-905  Penalty clause for contest.  A provision in a
 4 will or trust purporting to penalize any interested person for
 5 contesting the will or trust or instituting other proceedings
 6 relating to the probate or trust estate is unenforceable if
 7 probable cause exists for instituting proceedings." 
 8      SECTION 4.  Section 560:3-914, Hawaii Revised Statutes, is
 9 amended to read as follows:
10      "560:3-914  Disposition of unclaimed assets.  [If an heir,
11 devisee, or claimant cannot be found, the personal representative
12 shall distribute the share of the missing person, whether realty
13 or personalty, to that person's guardian of the property, if any,
14 otherwise to the State to become a part of the treasury of the
15 State under chapters 523A and 665, as appropriate.] When any real
16 or personal property remains in the hands of the personal
17 representative or trustee, after payment in the order specified
18 in section 560:3-805, and no heirs, devisees, or claimants of the
19 decedent, or beneficiaries of a trust, entitled to the property,
20 can be located after reasonable search and inquiry, the personal
21 representative or trustee, at the filing of the petition for
22 final accounts, or termination of the trust, shall report the
23 fact to the court, which shall forthwith enter an order

Page 14                                                    2646
                                     H.B. NO.           H.D. 1

 1 authorizing the transfer of the property to the state director of
 2 finance, and the personal representative or trustee shall
 3 immediately transfer the property to the director of finance for
 4 disposition as provided in chapters 523A and 665, whichever is
 5 appropriate.  The state director of finance, at any time, may
 6 authorize the payment out of the general funds of any amount so
 7 forwarded to any person who establishes to the satisfaction of
 8 the director of finance that the person is legally entitled as an
 9 heir, devisee, or claimant of the decedent, or a beneficiary of a
10 trust, and the person shall be entitled to receive the amount out
11 of any moneys in the general revenues of the State not otherwise
12 appropriated, upon warrant drawn by the state comptroller."
13      SECTION 5.  Section 560:3-916, Hawaii Revised Statutes, is
14 amended to read as follows:
15      560:3-916  Apportionment of estate taxes.(a)  For
16 purposes of this section:
17      "Estate" means the gross estate of a decedent as determined
18 for the purpose of federal estate tax and the estate tax payable
19 to this State.
20      "Fiduciary" means personal representative or trustee.
21      "Person" means any individual, partnership, association,
22 joint stock company, corporation, government, political
23 subdivision, governmental agency, or local governmental agency.

Page 15                                                    2646
                                     H.B. NO.           H.D. 1

 1      "Person interested in the estate" means any person entitled
 2 to receive, or who has received, from a decedent or by reason of
 3 the death of a decedent any property or interest therein included
 4 in the decedent's estate.  It includes a personal representative,
 5 conservator, and trustee.
 6      "State" means any state, territory, or possession of the
 7 United States, the District of Columbia, and the Commonwealth of
 8 Puerto Rico.
 9      "Tax" means the federal estate tax and the additional
10 inheritance tax imposed by Hawaii and interest and penalties
11 imposed in addition to the tax.
12      (b)  Except as provided in subsection [(i)] (j) and, unless
13 the will otherwise provides, the tax shall be apportioned among
14 all persons interested in the estate.  The apportionment is to be
15 made in the proportion that the value of the interest of each
16 person interested in the estate bears to the total value of the
17 interests of all persons interested in the estate.  The values
18 used in determining the tax are to be used for that purpose.  If
19 the decedent's will directs a method of apportionment of tax
20 different from the method described in this chapter, the method
21 described in the will controls.
22      (c)  The expenses reasonably incurred by any fiduciary and
23 by other persons interested in the estate in connection with the

Page 16                                                    2646
                                     H.B. NO.           H.D. 1

 1 determination of the amount and apportionment of the tax shall be
 2 apportioned as provided in subsection (b) and charged and
 3 collected as a part of the tax apportioned.  If the court finds
 4 it is inequitable to apportion the expenses as provided in
 5 subsection (b), it may direct apportionment equitably.
 6     [(c)] (d) (1)  The court in which venue lies for the
 7           administration of the estate of a decedent, on petition
 8           for the purpose may determine the apportionment of the
 9           tax;
10      (2)  If the court finds that it is inequitable to apportion
11           interest and penalties in the manner provided in
12           subsection (b), because of special circumstances, it
13           may direct apportionment thereof in the manner it finds
14           equitable;
15      (3)  If the court finds that the assessment of penalties and
16           interest assessed in relation to the tax is due to
17           delay caused by the negligence of the fiduciary, the
18           court may charge the fiduciary with the amount of the
19           assessed penalties and interest;
20      (4)  In any action to recover from any person interested in
21           the estate the amount of the tax apportioned to the
22           person in accordance with this chapter the
23           determination of the court in respect thereto shall be
24           prima facie correct.

Page 17                                                    2646
                                     H.B. NO.           H.D. 1

 1     [(d)] (e) (1)  The personal representative or other person in
 2           possession of the property of the decedent required to
 3           pay the tax may withhold from any property
 4           distributable to any person interested in the estate,
 5           upon its distribution to that person, the amount of tax
 6           attributable to that person's interest.  If the
 7           property in possession of the personal representative
 8           or other person required to pay the tax and
 9           distributable to any person interested in the estate is
10           insufficient to satisfy the proportionate amount of the
11           tax determined to be due from the person, the personal
12           representative or other person required to pay the tax
13           may recover the deficiency from the person interested
14           in the estate.  If the property is not in the
15           possession of the personal representative or the other
16           person required to pay the tax, the personal
17           representative or the other person required to pay the
18           tax may recover from any person interested in the
19           estate the amount of the tax apportioned to the person
20           in accordance with this chapter;
21      (2)  If property held by the personal representative is
22           distributed prior to final apportionment of the tax,
23           the distributee shall provide a bond or other security

Page 18                                                    2646
                                     H.B. NO.           H.D. 1

 1           for the apportionment liability in the form and amount
 2           prescribed by the personal representative.
 3     [(e)] (f) (1)  In making an apportionment, allowances shall
 4           be made for any exemptions granted, any classification
 5           made of persons interested in the estate and for any
 6           deductions and credits allowed by the law imposing the
 7           tax;
 8      (2)  Any exemption or deduction allowed by reason of the
 9           relationship of any person to the decedent or by reason
10           of the purposes of the gift inures to the benefit of
11           the person bearing such relationship or receiving the
12           gift; but if an interest is subject to a prior present
13           interest which is not allowable as a deduction, the tax
14           apportionable against the present interest shall be
15           paid from principal;
16      (3)  Any deduction for property previously taxed and any
17           credit for gift taxes or death taxes of a foreign
18           country paid by the decedent or the decedent's estate
19           inures to the proportionate benefit of all persons
20           liable to apportionment;
21      (4)  Any credit for inheritance, succession or estate taxes
22           or taxes in the nature thereof applicable to property
23           or interests includable in the estate, inures to the

Page 19                                                    2646
                                     H.B. NO.           H.D. 1

 1           benefit of the persons or interests chargeable with the
 2           payment thereof to the extent proportionately that the
 3           credit reduces the tax;
 4      (5)  To the extent that property passing to or in trust for
 5           a surviving spouse or reciprocal beneficiary or any
 6           charitable, public or similar purpose is not an
 7           allowable deduction for purposes of the tax solely by
 8           reason of an inheritance tax or other death tax imposed
 9           upon and deductible from the property, the property is
10           not included in the computation provided for in
11           subsection (b) [hereof], and to that extent no
12           apportionment is made against the property.  The
13           sentence immediately preceding does not apply to any
14           case if the result would be to deprive the estate of a
15           deduction otherwise allowable under section 2053(d) of
16           the Internal Revenue Code of 1986, as amended, of the
17           United States, relating to deduction for state death
18           taxes on transfers for public, charitable, or religious
19           uses.
20      [(f)] (g)  No interest in income and no estate for years or
21 for life or other temporary interest in any property or fund is
22 subject to apportionment as between the temporary interest and
23 the remainder.  The tax on the temporary interest and the tax, if

Page 20                                                    2646
                                     H.B. NO.           H.D. 1

 1 any, on the remainder is chargeable against the corpus of the
 2 property or funds subject to the temporary interest and
 3 remainder.
 4      [(g)] (h)  Neither the personal representative nor other
 5 person required to pay the tax is under any duty to institute any
 6 action to recover from any person interested in the estate the
 7 amount of the tax apportioned to the person until the expiration
 8 of the three months next following final determination of the
 9 tax.  A personal representative or other person required to pay
10 the tax who institutes the action within a reasonable time after
11 the three-month period is not subject to any liability or
12 surcharge because any portion of the tax apportioned to any
13 person interested in the estate was collectible at a time
14 following the death of the decedent but thereafter became
15 uncollectible.  If the personal representative or other person
16 required to pay the tax cannot collect from any person interested
17 in the estate the amount of the tax apportioned to the person,
18 the amount not recoverable shall be equitably apportioned among
19 the other persons interested in the estate who are subject to
20 apportionment.
21      [(h)] (i)  A personal representative acting in another state
22 or a person required to pay the tax domiciled in another state
23 may institute an action in the courts of this State and may

Page 21                                                    2646
                                     H.B. NO.           H.D. 1

 1 recover a proportionate amount of the federal estate tax, of an
 2 estate tax payable to another state or of a death duty due by a
 3 decedent's estate to another state, from a person interested in
 4 the estate who is either domiciled in this State or who owns
 5 property in this State subject to attachment or execution.  For
 6 the purposes of the action the determination of apportionment by
 7 the court having jurisdiction of the administration of the
 8 decedent's estate in the other state is prima facie correct.
 9      [(i)] (j)  If the liabilities of persons interested in the
10 estate as prescribed by this chapter differ from those which
11 result under the federal estate tax law, the liabilities imposed
12 by the federal law will control and the balance of this section
13 shall apply as if the resulting liabilities had been prescribed
14 herein."
15      SECTION 6.  Section 560:3-1201, Hawaii Revised Statutes, is
16 amended by amending subsection (a) to read as follows:
17      "(a)  Any person indebted to the decedent or having
18 possession of tangible personal property or an instrument
19 evidencing a debt, obligation, stock, chose in action, or other
20 intangible personal property belonging to the decedent shall make
21 payment of the indebtedness or deliver the tangible personal
22 property or an instrument evidencing the debt, obligation, stock,
23 chose in action, or other intangible personal property to a

Page 22                                                    2646
                                     H.B. NO.           H.D. 1

 1 person or persons claimed to be the successor or successors of
 2 the decedent or to the department of human services where the
 3 department has paid for the decedent's burial pursuant to section
 4 346-15, upon being presented a death certificate for the decedent
 5 and an affidavit made by or on behalf of the claimed successor or
 6 successors or the department of human services stating that:
 7      (1)  The gross value of the decedent's estate in this State
 8           does not exceed [$60,000;] $100,000; except that any
 9           motor vehicles registered in the decedent's name may be
10           transferred regardless of value pursuant to this
11           section;
12      (2)  No application or petition for the appointment of a
13           personal representative is pending or has been granted
14           in this State; and
15      (3)  (A)  The claimed successor or successors are entitled
16                to the property and explaining the relationship of
17                the claimed successor or successors to the
18                decedent; or
19           (B)  The department of human services has paid for the
20                decedent's burial.
21 The affidavit of the department of human services shall have
22 priority over any other claim presented pursuant to this
23 section." 

Page 23                                                    2646
                                     H.B. NO.           H.D. 1

 1      SECTION 7.  Section 560:3-1205, Hawaii Revised Statutes, is
 2 amended to read as follows:
 3      "560:3-1205  Estates of [$60,000] $100,000 or less; clerk
 4 of court to administer.  If a person dies leaving property in
 5 this State of a total value not exceeding [$60,000,] $100,000 and
 6 a personal representative of the estate has not been appointed in
 7 the State, the clerk of the court of the judicial circuit in
 8 which the decedent was residing or domiciled at the time of the
 9 decedent's death or left property may, upon the verified petition
10 of the clerk or of any interested person, obtain an order
11 authorizing the clerk to administer the estate, and, as the
12 personal representative, the clerk shall collect and receive the
13 property and administer the same.  The order may be made without
14 notice or hearing, at the discretion of the court.  Except as
15 otherwise specifically required or authorized by law or where the
16 clerk may be interested as an heir, or devisee, no clerk of any
17 court shall act as personal representative of any estate where
18 the value of the same is in excess of [$60,000.] $100,000.  No
19 fees shall be allowed the clerk, except as set forth in section
20 560:3-1211."
21      SECTION 8.  Section 560:3-1211, Hawaii Revised Statutes, is
22 amended to read as follows:

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                                     H.B. NO.           H.D. 1

 1      "560:3-1211  Exemption from costs.  All proceedings under
 2 this part shall be free from all costs of court, except that the
 3 clerk may charge the actual expenses for advertising the notice
 4 specified in section 560:3-1206, the advertising, posting, or
 5 service fees required in carrying out any order of the court,
 6 including orders relating to the sale of real or personal
 7 property, and any expenses reasonably necessary for the
 8 preservation, disposal, distribution, and administration of the
 9 estate, together with a fee of three per cent of the market value
10 of the first [$60,000] $100,000 in the gross estate, the fee to
11 be paid into the treasury of the State as a government
12 realization from any available assets of the estate; provided
13 that if the administration is completed by another personal
14 representative on account of the size of the estate or for any
15 other reason, no fee shall be charged by the clerk."
16      SECTION 9.  Section 560:3-1212, Hawaii Revised Statutes, is
17 amended to read as follows:
18      "560:3-1212  Estates of persons leaving no known relatives.
19 Every coroner or medical examiner who is called to investigate
20 the death of any person leaving no known spouse or reciprocal
21 beneficiary, issue, parent, grandparent, or issue of grandparents
22 over the age of majority in the State, shall take immediate
23 charge of the decedent's personal effects and if in the

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                                     H.B. NO.           H.D. 1

 1 discretion of the coroner the value of such personal effects is
 2 in excess of $2,500, forthwith deliver them to the clerk of the
 3 court of the judicial circuit in which such decedent died.
 4      If after ten days no person appears, competent to initiate
 5 appropriate probate proceedings, the clerk shall administer the
 6 estate pursuant to the provisions of this part; provided that if
 7 the decedent's estate is of a value exceeding [$60,000] $100,000,
 8 the clerk shall notify the judge of the circuit having charge of
 9 the probate calendar, and shall petition for the appointment of a
10 personal representative of such estate other than the clerk.  In
11 the meantime the clerk may take such steps as may be appropriate
12 to preserve and conserve the real and personal property of the
13 decedent.  All expenses in connection with the taking possession,
14 care, and conservation of the property and with such proceedings
15 shall be proper charges against the estate of the decedent.  The
16 corporation counsel or county attorney of each county shall
17 advise, assist, and represent as far as necessary any of such
18 officers in the performance of any act or the institution or
19 prosecution of any proceeding required by this section.  If the
20 decedent's estate is of a value not exceeding $2,500 and the
21 decedent has no known relatives or whose relatives have failed to
22 indicate any means of disposition of the estate, then the coroner

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                                     H.B. NO.           H.D. 1

 1 or medical examiner having custody of the property shall dispose
 2 of the property in an appropriate manner, which may be any one of
 3 the following or a combination thereof:
 4      (1)  Where the estate consists only of money and is not in
 5           excess of $2,500 and expenditures have been made in
 6           connection with such death, to reimburse the
 7           appropriate city and/or county office that made the
 8           disbursement to defray said expenses;
 9      (2)  Where the estate consists of cash or personal
10           belongings of monetary value, or both, not exceeding
11           $2,500, to liquidate the personal belongings and apply
12           the proceeds, together with the cash, if the total does
13           not exceed $2,500, in accordance with paragraph (1);
14      (3)  Where the assets in the estate are of no monetary value
15           (unsalable) and in the best judgment and discretion of
16           the coroner or medical examiner can be used by some
17           charitable institution, to donate the assets to
18           whatever charitable institution is willing and able to
19           pick up the assets in question;
20      (4)  Where the assets have no value whatsoever or are in
21           such condition that, in the best judgment and
22           discretion of the coroner or medical examiner, a
23           charitable institution cannot use the properties, or

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                                     H.B. NO.           H.D. 1

 1           will not receive the properties, to destroy the same in
 2           any manner the coroner or medical examiner sees fit;
 3           and
 4      (5)  If under paragraphs (1) and (2), there are assets
 5           remaining, then the coroner or medical examiner shall
 6           forthwith forward the same to the state director of
 7           finance for disposition as provided in chapter 523A."
 8      SECTION 10.  This Act does not affect rights and duties that
 9 matured, penalties that were incurred, and proceedings that were
10 begun, before its effective date.
11      SECTION 11.  Statutory material to be repealed is bracketed.
12 New statutory material is underscored.
13      SECTION 12.  This Act shall take effect on July 1, 2000.