Report Title:

Wills and Trusts; Personal Representative; Trustees; Written Fee Disclosure

Description:

Requires an attorney preparing a will or trust who has been named to serve as a personal representative or a trustee, and who anticipates being paid to serve, to disclose in writing to the testator or trustor that the attorney anticipates being paid to serve as personal representative or trustee, and the method by which compensation will be determined. (HB1756 HD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1756

TWENTY-THIRD LEGISLATURE, 2005

H.D. 1

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to probate.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Section 560:3-719, Hawaii Revised Statutes, is amended to read as follows:

"§560:3-719 Compensation of personal representative. (a) A personal representative is entitled to reasonable compensation for the personal representative's services[.], subject to subsection (b). If a will provides for compensation of the personal representative and there is no contract with the decedent regarding compensation, the personal representative may renounce the provision before qualifying and be entitled to reasonable compensation. A personal representative also may renounce the personal representative's right to all or any part of the compensation. A written renunciation of fee may be filed with the court.

(b) If the testator has designated the attorney preparing the will to serve as the personal representative, and the attorney anticipates being paid for such service, the attorney shall prepare, for the testator's approval by signature, a written disclosure both of the fact that the attorney anticipates being paid for such service and the method by which such compensation will be determined. The signed disclosure shall be filed with the will. The court shall take into consideration any failure to submit a signed disclosure in determining reasonable compensation for the attorney's services as a personal representative."

SECTION 2. Section 607-18, Hawaii Revised Statutes, is amended to read as follows:

"§607-18 Fees and expenses of trustees. (a) Upon all moneys and other property received in the nature of revenue or income of the estate, such as rents, interest, dividends, and general profits, trustees, except trustees of a charitable trust, shall be allowed as commissions payable out of the income received during each year, seven per cent for the first $5,000 and five per cent for all over $5,000 the commissions to be payable as and when the income is received, but not more often than once a year.

(b) If the trustor has designated the attorney preparing the trust as a trustee, and the attorney anticipates being paid for such service, the attorney shall prepare, for the trustor's approval by signature, a written disclosure both of the fact that the attorney anticipates being paid for such service and the method by which such compensation will be determined. The court shall take into consideration any failure to submit a signed disclosure in determining reasonable compensation for the attorney's services as a trustee.

[(b)] (c) Upon the principal of the estate, trustees shall be allowed as commissions one per cent on the value at the inception of the trust payable at the inception out of the principal, one per cent on the value of all or any part of the estate upon final distribution payable at the termination out of the principal, and two and one-half per cent upon all cash principal received after the inception of the trust and neither being nor representing principal upon which the two and one-half per cent has previously at any time been charged, payable at the receipt out of the principal, and two and one-half per cent upon the final payment of any cash principal prior to the termination of the trust, payable at the final payment out of the principal, and in addition thereto five-tenths of one per cent on the value at the expiration of each year during the continuance of the trust payable annually out of the principal; provided that such five-tenths of one per cent on the principal shall not apply to charitable trusts, nor to the extent the trustee has employed others to perform bookkeeping and clerical services at the expense of the estate as permitted by the trust document or as provided in section 554A-3.

[(c)] (d) Such further allowances may be made as the court deems just and reasonable for services performed in connection with sales or leases of real estate, contested or litigated claims against the estate, the adjustment and payment of extensive or complicated estate or inheritance taxes, the preparation of estate and income tax returns, the carrying on of the decedent's business pursuant to an order of court or under the provisions of any will, litigation in regard to the property of the estate, and such other special services as may be necessary for the trustee to perform, prosecute, or defend. All contracts between a trustee and a beneficiary other than the creator of the trust, for higher compensation than is allowed in this section shall be void.

[(d)] (e) This section shall apply as well to future accounting in existing estates as to new estates."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect on January 1, 2050, and shall apply to testamentary documents signed thereafter.