Designating Successors Q&A

Why should I designate a successor to my homestead lease?

As a homesteader, you are a property owner, with certain rights and obligations. One of your rights is to decide, in accordance with law, who you want to succeed to your homestead lease. The Department will dispose of your leasehold in accordance with your choice, provided, of course, that the person or persons designated are qualified to succeed to the lease (“qualified” means that the person or persons meet the Hawaiian blood requirement).

What happens if I die without mak­ing a designation?

By law, the Department has very limited authority to choose a successor, if you fail to do so. If you leave a surviving qualified spouse, your spouse will be selected. If there is no surviving spouse or your spouse is not qualified to succeed the lease, the Department may then select your children, grandchildren, brother or sister, if they qualify at 25 percent Hawaiian blood; or the following relatives who have at least 50 percent Hawaiian blood: your father and mother, the widows or widowers of your children, widows or widowers of your broth­ers and sisters, or your nieces and nephews. Should you not have any qualified successors, the lease will be cancelled and the Department will pay the appraised value, less any debts owed the Department and for property taxes to your legal representative, meaning to your estate.

Am I allowed to designate ANY person to succeed to my lease?

No. Section 209 of the Hawaiian Homes Commission Act specifies only cer­tain relatives may be designated as successors.

You may designate only from the following relatives:

(1) Your spouse, children, grandchildren, brother or sister provided the person or persons designated have at least 25 percent Hawaiian blood;

(2) Father and mother, the widows or widowers of your children, widows or widowers of your brothers and sisters, or your nieces and nephews, provided that per­son or persons designated have at least 50 percent Hawaiian blood.

The law was changed effective October 27, 1986 by lowering the Hawaiian blood requirement to 25 percent in the case of spouse and children, effective June 27, 1997 in the case of grandchildren, and effective April 20, 2005 in the case of brothers or sisters. It is very important that lessees, whose spouse, children, grandchildren, brothers or sisters now qualify because they meet the lower Hawaiian blood requirement, file a new designation if they wish to designate them or any one of them as successors.

My father is 100% Hawaiian. Can I designate him as my successor?

Yes. In 1993 the law was changed that father and mother may be designated provided that they have at least 50 percent Hawaiian blood.

Can I designate my sister or brother, who is 25% Hawaiian as a successor?

Yes. On April 20, 2005, Governor Linda Lingle signed Act 16 (05) SB780 into law, which allows a homestead lessee who is at least 25% Hawaiian to designate a brother or sister to succeed to the leasehold interest in the homestead.

Can I designate my stepchildren who are 25% Hawaiian as successors?

No. Only children related to you by blood or legally adopted by you can qualify as successors.

(Note: Children adopted by lessees cannot use their adopted parents’ ancestry to meet the Ha­waiian blood requirements but must use their natural parents’ ancestry. The Department has an arrangement with the Family Court to obtain ethnic data about adopted persons without disclosing information from sealed records.)

Can I designate more than one person as a successor?

Yes, as long as they qualify to succeed to the lease.

How many can I designate?

The law does not set a limit as to how many relatives can be desig­nated.

My grandchild is 25% Hawaiian. Can I designate him/ her as my successor?

Yes, the legislature approved the lowering of the blood quantum to 25 percent for grandchildren. President Clinton signed legislation that approved this amendment and the law took ef­fect on June 27, 1997.

Can I designate a minor, one who is less than 18 years of age?

Yes. When a minor succeeds to a homestead lease, a guardian approved by the court must be named. The guardian acts on behalf of the minor on all mat­ters pertaining to the leasehold. The guardian does not need to be a native Hawaiian.

When should I designate a successor?

There is no present requirement as to when this should be done. The Department recom­mends that a designation be made at the time the homestead lease documents are executed. If it was not done at the time, it should be done as soon the lessee can decide on a successor.

Once I make a decision, can I change it?

Yes. You may change your designation at any time, and as many times as you wish.

How do I file my designation?

The law requires that your designation be in writing, filed with Department and approved by the Hawaiian Homes Commission. The original of the designation is kept by the Department. Blank forms are available at all offices at the Depart­ment.

Must I bring in documents to prove the relationship and Hawaiian ancestry of my successor at the time I file my des­ignation?

Yes. By having your successor’s qualification verified and certified by the De­partment, you will have the assur­ance that the person or persons you designate are qualified to succeed to your lease.

Is it a requirement that I designate alternate successors?

No. Designation of alternate successors is optional. It is a good idea to designate alternates because the person or persons designated as successors may choose not to succeed to the lease or may not qualify. Also, there have been cases where the designated successor died before the lessee.

What is the difference between “Designation of Successor” and “Designation of Per­son or Persons to Receive Net Pro­ceeds”? What does “Net Proceeds” Mean?

The “Designation of Successor” refers to the naming of one or more relatives, among those specified by the law to succeed to the homestead lease.

The “Designation of Person or Persons to Receive Net Proceeds” refers to the naming of one or more persons from among the spouse or children who do not qualify to succeed to the lease to receive the net proceeds of your leasehold interest.

“Net Proceeds” means the appraised value of the leasehold improvements and growing crops, if any, less any debt owed the Department, or debt owed for property taxes, and any debt guaranteed by the Department.

Can I designate a very close friend to receive the net Proceeds? Can I designate a brother or sister to receive the net proceeds?

No. Only your spouse, child, or children who do not have at least 25 percent Hawaiian blood can be des­ignated to receive the net proceeds. If there is no surviving spouse, child, or children, the net proceeds will be paid to your estate.

If I designate my wife, who is not Hawaiian, to receive the net proceeds, can I also designate my child, who is 25% Hawaiian, to succeed to my lease?

No. In the example you gave, you have the right either to designate your child as successor to your lease or to designate your wife to receive the net proceeds. You can­not do both.

If you designate your spouse to the net proceeds, the Department will then publish a public notice to quali­fied successors to the lease. If they wish to, the children may respond to the public notice and apply to succeed to the lease.

Is my designation confidential?

Yes. Your designation is a confidential record and no unauthorized person can see it without your written permission.

When does my designated successor take over the lease?

The designated successor’s interest in the lease begins on the date of death of the lessee.

Will the Department advise me on legal complications about designat­ing a successor?

The Department can advise you on what it believes the law provides. How­ever, the Department strongly recommends that you consult with your attorney for advice on any special situations.