To take advantage of the small estate procedure in Hawaii, the deceased must have lived in the state at the time of death or be a nonresident who owned property there. The total estate must be valued at less than $100,000, including real estate and personal property. Estate property is simply all property left behind by a deceased person that does not pass automatically to heirs. Property that passes automatically is referred to as non-probate property, which includes assets held in trust, payable on death accounts, life insurance payouts and real estate held as joint tenants or tenants by the entirety; assets owned by the decedent as a tenant in common are part of the decedent’s estate.
After valuing the estate, Hawaii law allows certain family support allowances paid immediately to a surviving spouse or minor children. These include a $15,000 homestead allowance, up to $10,000 in personal effects, furnishings and automobiles, and up to $18,000 in support maintenance while probate is pending. These allowances take precedence over creditors and heirs. If the estate is too small to cover these payments, as well as all funeral and administrative expenses, probate is not necessary and the matter can be settled administratively by filing what is known as a closing statement. The practical effect of this rule is that an estate that would otherwise be required to go through small estate probate due to the presence of real estate might be able to avoid the process if it has no value due to mortgages or other liens, if there is a surviving spouse or children, and limited personal property.
Role of the Clerk
For qualifying estates, the small probate procedure is handled by the court. This is in contrast to standard probate, which involves the appointment of an administrator or executor to pay debts and make distributions. In small estate probate, the clerk takes on the role of the administrator. This can remove the burden on family members, who are typically selected for this task. The clerk will initiate the process upon receipt of a notarized statement itemizing the value of all estate property. The court charges a fee of 3 percent of the value of the estate, plus administrative and court costs for administering the small estate probate process.
State law requires the clerk to follow certain notice requirements. Heirs must receive information about the action by mail, as well as a copy of the will if one was filed. If the estate is less than $10,000, the clerk must provide notice by posting at the courthouse and in a newspaper of general circulation. For larger estates, the clerk may provide notice, but he is not required to. This notice can be by newspaper to inform general creditors or by mail to known creditors.
After notice, the creditors have four months to file a claim if provided general notice or 60 days if provided actual notice or the estate is less than $10,000. If no notice was provided, the creditors have 18 months. Claims are barred if not brought within these time periods, and property of the estate will be used to satisfy the creditors. You may not sell any assets until the process is complete. Once the notice and the window for creditors has passed and all of the allowances have been paid, the clerk may distribute any remaining property according to the will or state law. The process takes an average of 10 to 12 months to complete.