3 Costly Trust Mistakes Hawaiʻi Families Make — And How to Avoid Them

Including a trust as part of your estate plan is a smart move. A properly designed trust can help Hawaiʻi families avoid probate, maintain privacy, and pass assets to loved ones efficiently—often with added layers of protection for future generations.

But here’s the part many people don’t realize: creating a trust alone doesn’t make it work.

For your trust to function as intended, it must be properly funded and kept up to date. Without that coordination, even a beautifully drafted trust can fail—leaving your family to navigate court, delays, and unnecessary expenses.

Below are three common estate planning mistakes I see with families across Honolulu and throughout Hawaiʻi — and what you can do to avoid them.

Mistake #1: Creating a Trust — But Never Funding It

Funding your trust means transferring ownership of assets from your personal name into the name of your trust (or correctly naming the trust as beneficiary where appropriate).

This typically includes:

• Bank and investment accounts

• Real estate

• Certain business interests

• Other significant assets

When assets are properly titled, your trustee can manage them if you become incapacitated and distribute them according to your wishes when you pass away — without court involvement.

When a trust isn’t funded, however, it becomes little more than an empty container. Assets left outside the trust often still require probate to get transferred after death — defeating one of the primary reasons people create trusts in the first place.

In Hawaiʻi, probate can be especially time-consuming and expensive, and families are often surprised to learn that court involvement could have been avoided with proper funding.

Mistake #2: Outdated or Incorrect Beneficiary Designations

Many people assume their will or trust controls everything. In reality, beneficiary designations override your estate planning documents.

Accounts that commonly rely on beneficiaries include:

• Retirement accounts

• Life insurance policies

• Some bank and brokerage accounts

If these designations are outdated — or don’t align with your trust — assets can pass to unintended individuals, former spouses, or even minors outright.

When working with clients in Honolulu and across Hawaiʻi, I make sure there’s a clear plan for every beneficiary-designated asset, including who is responsible for making updates and how often those designations should be reviewed.

Even small oversights — like opening a new account and forgetting to name the trust — can create major problems later.

Mistake #3: Your Home Was Never Transferred Into the Trust

For many families, their home is their most valuable asset. Yet it’s surprisingly common for homes to be left outside the trust.

If your home isn’t titled in the name of your trust:

• It may still require probate if you pass away

• Court involvement may be required during incapacity

• Your family may face delays, legal fees, and stress

In Hawaiʻi, this issue is even more nuanced because properties may be held in the Land Court or Regular System, and transfers must be handled correctly to avoid complications.

This step is often missed with DIY estate planning tools — or when attorneys fail to confirm the deed transfer was completed properly.

Mistake #4 (Bonus): Never Reviewing the Plan After It’s Signed

Estate planning isn’t a “set it and forget it” task.

Life changes — and so do assets.

Common issues I see during reviews include:

• New bank or investment accounts opened outside the trust

• Retirement accounts with outdated beneficiaries

• Homes refinanced without re-titling

• Trusts that no longer reflect family dynamics

By reviewing your plan every few years, these issues can be caught early — before they create real consequences for your loved ones.

A Trust Only Works When Everything Works Together

Your legal documents are powerful — but they aren’t magic on their own.

A truly effective estate plan coordinates:

• Legal documents

• Asset ownership

• Beneficiary designations

• Ongoing reviews

That’s why my work with families in Honolulu and across Hawaiʻi goes beyond drafting documents. My goal is to help ensure every moving piece works together — so your plan actually protects the people you care about most.

If you’d like to learn more about how proper trust funding and ongoing reviews can make the difference between peace of mind and probate court, I’d be happy to help.

FAQs

How often should I review my estate plan?

At least every three years — or sooner if you experience major life changes such as marriage, divorce, a move, or acquiring significant assets.

Does a trust automatically avoid probate in Hawaiʻi?

Only if assets are properly titled in the trust or directed to it through beneficiary designations.

Can I fund my trust myself?

Some assets can be handled independently, but mistakes are common. Coordinated guidance helps ensure nothing is overlooked.

What happens if just one asset is left out of my trust?

That asset may still require probate, even if everything else is properly funded.

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This article is brought to you by the Law Office of Keoni Souza, a boutique estate planning firm located in Honolulu, Hawaiʻi, proudly serving families on Oʻahu and across the Hawaiian Islands. At our firm, estate planning is about more than documents — it’s about creating lasting peace of mind for you and the people you love. Through our unique Life & Legacy Planning Process, we guide you to make informed, empowered decisions that protect your wealth, your wishes, and your family’s future. To get started, contact our Honolulu office today to schedule your Life & Legacy Planning Session.

Disclaimer: The information on this website is for informational purposes only and should not be considered legal advice. For guidance tailored to your specific situation, please consult an estate planning attorney licensed in the State of Hawaiʻi. Use of this website or communication through this site does not create an attorney-client relationship with the Law Office of Keoni Souza, LLC.