Bill Text: HI SB2216 | 2012 | Regular Session | Amended

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Bill Title: Conveyance of Property

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2012-02-10 - (H) Referred to JUD, referral sheet 24 [SB2216 Detail]

Download: Hawaii-2012-SB2216-Amended.html

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STAND. COM. REP. NO. 2035

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 2216

       S.D. 1

 

 

 

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

 

Sir:

 

     Your Committee on Judiciary and Labor, to which was referred S.B. No. 2216 entitled:

 

"A BILL FOR AN ACT RELATING TO TRANSFER OF PROPERTY,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to:

 

     (1)  Specify that property held by spouses in tenancy by the entirety shall continue to be treated as such after the transfer to a trust unless otherwise specifically provided by the trust instrument;

 

     (2)  Limit the remedies available to creditors against transferred property; and

 

     (3)  Define "spouse" to include partners in a civil union.

 

     Your Committee received testimony in support of this measure from Honolulu Pride and two private individuals.  Testimony in opposition to this measure was submitted by the Hawaii Bankers Association.  The Department of the Attorney General; and the Gay, Lesbian, Bisexual and Transgender Caucus of the Democratic Party of Hawaii submitted comments.

 

     Your Committee finds that a debt of one spouse or reciprocal beneficiary may not be enforced against property titled as tenancy in the entirety.  From an estate planning standpoint, it is often advisable to create revocable trusts for spouses or reciprocal beneficiaries in order to avoid probate and minimize estate taxes.  However, under existing law, spouses or reciprocal beneficiaries are forced to choose between the creditor protections offered by a tenancy in the entirety arrangement or foregoing those protections in favor of setting up and properly funding estate planning trusts.  This measure amends the law to prevent couples from having to make this sometimes difficult choice.

 

     Your Committee recognizes that the language of this measure needs further streamlining and encourages the attorneys from the Judiciary's Committee on the Uniform Probate Code and Probate Court Practices, the Department of the Attorney General, and the Hawaii Bankers Association to work on language, especially with respect to when spouses divorce after the transfer of property to a specified trust, as the measure moves through the legislative process.

 

     Your Committee has amended this measure by deleting the definition for "spouse" to avoid any unintended consequences of affecting the interpretation of other statutes, and to ensure that partners in a civil union are included in the interpretation as originally intended.

 

     As affirmed by the record of votes of the members of your Committee on Judiciary and Labor that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2216, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2216, S.D. 1, and be placed on the calendar for Third Reading.

 

Respectfully submitted on behalf of the members of the Committee on Judiciary and Labor,

 

		____________________________ CLAYTON HEE, Chair