FAQ - Estate Planning

Q: What is Estate Planning?

Estate Planning is the process of preparing a strategy for transferring your assets at death. This includes your home, personal possessions, bank accounts, stocks, bonds, business, and other financial interests.

Q: Do I have to pay Estate Taxes?

Both the Federal government and the State of Hawaii have the right to tax assets owned by a person when they die, before their heirs are permitted to use those assets. The State of Hawaii instituted an estate tax in 2010 and the Federal Government continues to have an estate tax. Therefore, it is very important to be certain your estate plan takes estate taxation into consideration.

Nine months after a person dies, estate taxes are due in cash payable to the Internal Revenue Service and the State of Hawaii. The executor of your estate may be forced to auction a family heirloom, part with stocks you wanted the family to keep, liquidate business assets, sell property, or borrow money to pay estate taxes.

Q: Can I minimize the amount of Estate Tax I'll owe?

Yes, proper Estate Planning will help you identify and reach the goals you set for your estate. Most of all, it will help you to leave the kind of legacy you want to your loved ones.

Note: Tax laws are subject to change (consult your Tax Advisor) 

  • Leaving the Estate to Your Spouse - A U.S. citizen can leave all assets to his or her spouse without having to pay federal estate taxes, as long as the spouse is also a U.S. Citizen. While this seems to be a good solution for minimizing estate taxes, leaving a sizable estate to your spouse can create even larger estate tax problems when your spouse dies.
  • Leaving the Estate to Your Children or Grandchildren - Federal estate tax applies to assets left to anyone other than your spouse if the amount exceeds the Unified Credit Amount. In addition, a Generation Skipping transfer tax may apply in the case of gifts to grandchildren.
  • Giving Away Assets During Your Lifetime - Giving away some of your assets during your lifetime may be a good idea. Remember, you must meet your own needs before giving away your assets. You should also keep in mind that you and your spouse can each give $15,000 adjusted for inflation) per year to each child, grandchild, or any other individual, with no federal gift tax.
  • Giving Assets to Charity - This can be a source of valuable tax deductions, and can be a useful part of your estate plan.
Q: I've got a will, is that good enough?

Having a will is good, but it's just the beginning of Estate Planning. You must, first and foremost, consider your goals as they pertain to your family and estate. You must also include smart tax planning, because estate taxes can significantly diminish the wealth you want to leave to your family. Keeping estate taxes as low as possible means more wealth to your family.

Q: How do I start Estate Planning?

Estate Planning can be a very complex job, and is not something to be taken lightly. First Hawaiian Bank can work with you and your attorney to properly guard your assets for the future.

For more information, call us at 525-7134 or toll-free at 1-888-287-0398.  You can also visit any conveniently located First Hawaiian Bank branch and ask for a Wealth Advisor.

Q: What is a Trust?

A legal arrangement in which an individual (the Trustor) gives fiduciary control of property to a person or institution (the trustee) for the benefit of beneficiaries.

Q: What is a Trustee?

A trustee is an individual or organization which holds or manages and invests assets for the benefit of another. The trustee is legally obliged to make all trust-related decisions with the beneficiary’s interests in mind. Trustees may be entitled to a payment for their services

Q: What is a Fiduciary?

A fiduciary is an individual, corporation or agent holding assets for another party, often with the legal authority and duty to make decisions regarding financial matters on behalf of the other party.


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