How to Distinguish Assets Belonging to a Deceased Person’s Estate from Those Held by a Corporation Established by a Relative in Hawaii

Detailed Answer

When a person dies, their estate includes all assets owned in their individual name at the date of death. In contrast, a corporation owns its own assets separate from the individuals who formed it. Hawaii law treats these categories distinctly to protect creditors, beneficiaries, and corporate stakeholders.

1. Identify Estate Assets Under Hawaii Probate Law

Ownership records: Check title documents, deeds, and account statements titled solely in the decedent’s name. These assets pass through probate. See Hawaii Revised Statutes (HRS) §30-2 for definitions of “estate” and “probate assets” (HRS §30-2).
Probate inventory: The personal representative must file an inventory listing all probate assets. Review the probate court filings in the circuit court where the decedent lived (HRS §30-15, HRS §30-15).
Beneficiary designations: Life insurance and retirement accounts with named beneficiaries bypass probate. They are not estate assets unless no valid beneficiary designation exists.
Joint ownership and community property: Jointly held property with rights of survivorship automatically vests in the survivor and often avoids probate.

2. Confirm Corporate Assets Under Hawaii Business Corporation Law

Corporate records: A corporation organized under HRS Chapter 414D files articles of incorporation, bylaws, and annual reports with the Department of Commerce & Consumer Affairs. All corporate assets appear on its balance sheet. See HRS §414D-111 (separate legal existence).
Bank and financial accounts: Corporate bank accounts list the corporation as account holder. Funds in these accounts belong to the corporation, not to the relative founder or the decedent’s estate.
Title documents: Real estate held in the corporation’s name (e.g., “XYZ Holdings, Inc.”) remains corporate property. Verify by searching the Bureau of Conveyances.

3. Avoiding Commingling and Piercing the Corporate Veil

To keep estate and corporate assets separate, maintain distinct records. Commingling personal and corporate funds risks piercing the corporate veil. Courts may disregard corporate separateness if the corporation serves as an alter ego (HRS §414D-114).

4. Practical Steps for the Personal Representative

Obtain certified death certificate.
Gather asset records: deeds, account statements, corporate filings.
Engage a probate attorney or corporate lawyer if you notice mixed ownership.
File probate documents and corporate inventories promptly to avoid delays.

Helpful Hints

Review the decedent’s will or trust to see if they transferred assets into the corporation.
Inspect meeting minutes and resolutions for corporate asset acquisitions.
Keep personal representative and corporate officer duties separate in writing.
Use a forensic accountant if you suspect hidden corporate assets.
Consult Hawaii probate rules at the Supreme Court’s website for procedural guidance.