The $1.5 Million Estate Planning Mistake Hawaiʻi Families Must Avoid

Imagine this: you and your spouse spend decades building a successful business, investing wisely, and creating stability for your family. You think you’ve done everything right with your estate plan. But then a paperwork error wipes out years of careful planning — costing your loved ones over $1.5 million in unnecessary taxes.

Unfortunately, this isn’t just a cautionary tale. It’s exactly what happened to the Rowland family in Ohio. Their mistake could just as easily happen to families here in Honolulu or across Hawaiʻi if the right safeguards aren’t in place.

When “Good Enough” Planning Becomes a Financial Disaster

Billy Rowland was a community-minded businessman who expanded his family’s enterprises over decades. When his wife Fay passed away, her estate filed the necessary paperwork to preserve her unused estate tax exclusion — a key step in ensuring her husband could use it later.

But here’s where things unraveled: her return listed a lump sum estate value, but not the specific value of each individual asset. It seemed minor, but the IRS later ruled the return incomplete. As a result, Billy’s heirs lost the ability to use Fay’s $3.7 million exclusion.

The outcome? When Billy passed in 2018, his $26 million estate faced a massive tax bill — $1.5 million higher than it should have been. By the time the IRS flagged the error, it was too late to correct.

Why Families in Hawaiʻi Should Pay Attention

With today’s laws, each person can shield $13.99 million from estate taxes (scheduled to increase to $15 million in 2026). Married couples can combine exclusions — but only if the first spouse’s return is filed correctly.

One missed detail can mean losing millions in protections. For Hawaiʻi families with valuable real estate, successful small businesses, or long-term investments, the risk is very real. A single oversight could force the sale of the family home, land, or business just to pay the IRS.

Even families with smaller estates aren’t immune. Market growth, inheritances, or future law changes can all push an estate into taxable territory.

The Hidden Problem: One-Time Planning

The Rowland case reveals a deeper flaw: too many people treat estate planning as a one-time task. They draft documents, file them away, and assume everything will work itself out.

But effective estate planning is a living process. Life changes, assets grow, tax laws shift. Without regular updates and the guidance of a trusted advisor, even the best intentions can fall apart.

That’s why my approach — the Life & Legacy Planning® process — is different. It’s not just about creating documents. It’s about building an ongoing relationship to ensure your plan actually works when your loved ones need it most.

How Life & Legacy Planning Protects Hawaiʻi Families

Here’s how my process helps prevent costly mistakes:

• Regular Reviews – Your plan isn’t static. We revisit it as your life, family, and assets evolve.

• Strategic Guidance – We proactively handle complex issues like portability elections to avoid disasters like the Rowlands faced.

• Family Communication – I help ensure your loved ones know the plan, understand deadlines, and won’t be left scrambling in a crisis.

• Ongoing Support – I’m not just a document preparer. I’m a trusted advisor who will be there for your family before and after your passing.

Don’t Let a Paperwork Error Destroy Your Legacy

The Rowland family’s $1.5 million mistake was preventable — and that’s the key takeaway for families in Honolulu and across Hawaiʻi. Estate planning isn’t just about documents; it’s about making sure your plan actually works.

With the right strategy and ongoing guidance, you can protect your family’s future, preserve your legacy, and ensure your hard-earned wealth benefits those you love most.

FAQs

1. Does this only affect wealthy families?

No. Even families with modest estates can be impacted as asset values rise or laws change.

2. Why is estate planning especially important in Hawaiʻi?

Because real estate values in Honolulu and across the islands are so high, many families cross into taxable estate territory without realizing it.

3. What’s the biggest mistake families make?

Assuming that creating documents once is enough. Plans need regular reviews and updates.

4. How do I make sure this doesn’t happen to my family?

Work with an attorney who offers ongoing planning support — not just one-time document prep.

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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. Mention this article to learn how you can receive this $750 session at no charge.

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.