(a) Except as otherwise provided in subsection (c), the following rules shall apply:

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Terms Used In Hawaii Revised Statutes 560:3-1303

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Charity: An agency, institution, or organization in existence and operating for the benefit of an indefinite number of persons and conducted for educational, religious, scientific, medical, or other beneficent purposes.
  • Decedent: A deceased person.
  • Gross estate: The total fair market value of all property and property interests, real and personal, tangible and intangible, of which a decedent had beneficial ownership at the time of death before subtractions for deductions, debts, administrative expenses, and casualty losses suffered during estate administration.
  • Revocable trust: A trust agreement that can be canceled, rescinded, revoked, or repealed by the grantor (person who establishes the trust).
(1) To the extent that a provision of a decedent‘s will expressly and unambiguously directs the apportionment of an estate tax, the tax shall be apportioned accordingly;
(2) Any portion of an estate tax not apportioned pursuant to paragraph (1) shall be apportioned in accordance with any revocable trust of which the decedent was the settlor that expressly and unambiguously directs the apportionment of an estate tax. If conflicting apportionment provisions appear in two or more revocable trust instruments, the provisions in the most recently dated instrument shall prevail. For purposes of this paragraph:

(A) A trust is revocable if it was revocable immediately after the trust instrument was executed, even if the trust subsequently becomes irrevocable; and
(B) The date of an amendment to a revocable trust instrument is the date of the amendment instrument only if the amendment contains an apportionment provision; and
(3) If any portion of an estate tax is not apportioned pursuant to paragraph (1) or (2) and a provision in any other dispositive instrument expressly and unambiguously directs that any interest in the property disposed of by the instrument is, or is not, to be applied to the payment of the estate tax attributable to the interest disposed of by the instrument, the provision shall control the apportionment of the tax to that interest.
(b) Subject to subsection (c), and unless the decedent expressly and unambiguously directs the contrary, the following rules shall apply:

(1) If an apportionment provision directs that a person receiving an interest in property under an instrument is to be exonerated from the responsibility to pay an estate tax that would otherwise be apportioned to the interest:

(A) The tax attributable to the exonerated interest shall be apportioned among the other persons receiving interests passing under the instrument; or
(B) If the values of the other interests are less than the tax attributable to the exonerated interest, the deficiency shall be apportioned ratably among the other persons receiving interests in the apportionable estate that are not exonerated from apportionment of the tax;
(2) If an apportionment provision directs that an estate tax is to be apportioned to an interest in property, a portion of which qualifies for a marital or charitable deduction, the estate tax shall first be apportioned ratably among the holders of the portion that does not qualify for a marital or charitable deduction and then apportioned ratably among the holders of the deductible portion to the extent that the value of the nondeductible portion is insufficient;
(3) Except as otherwise provided in paragraph (4), if any apportionment provision directs that an estate tax be apportioned to property in which one or more time-limited interests exist, other than interests in a specified property under section 560:3-1307, the tax shall be apportioned to the principal of the property, regardless of the deductibility of some of the interests in that property; and
(4) If an apportionment provision directs that an estate tax is to be apportioned to the holders of interests in property in which one or more time-limited interests exist, and a charity has an interest that otherwise qualifies for an estate tax charitable deduction, the tax shall first be apportioned, to the extent feasible, to interests in property that have not been distributed to the persons entitled to receive the interests.
(c) A provision that apportions an estate tax shall be deemed ineffective to the extent that it increases the tax apportioned to a person having an interest in the gross estate over which the decedent had no power to transfer immediately before the decedent executed the instrument in which the apportionment direction was made. For purposes of this subsection, a testamentary power of appointment is a power to transfer the property that is subject to the power.

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