Is a living trust based on state or federal law?

A living trust is a legal document that sets out how a person’s assets and property are to be distributed after their death. In Hawaii, whether a living trust is based on state or federal law depends on which specific type of living trust is established. A revocable living trust is based on state law, and it allows a person to have full control over their assets during their lifetime. This type of trust is established by the grantor, the person who creates the trust. The grantor can modify or revoke the trust at any time. Hawaii’s inheritance taxes are the same as the federal inheritance taxes, so in most cases, a revocable living trust does not provide any tax benefits. On the other hand, an irrevocable trust is based on both federal and state laws. This type of trust cannot be changed or revoked by the grantor, and it offers certain tax benefits. For example, in Hawaii, the property in an irrevocable trust is not subject to state inheritance taxes. Furthermore, federal taxes can be minimized if the trust meets certain requirements. Overall, a living trust based on state or federal law in Hawaii depends on which type of trust is established. The revocable living trust is based on state law, and it does not offer any tax benefits. The irrevocable living trust is based on both state and federal laws, and it offers certain tax benefits.

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