SR 182: REQUESTING THE DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS TO EVALUATE REGISTRATION, REPORTING, AND TRANSPARENCY MECHANISMS FOR TRUSTS FORMED UNDER CHAPTER 554G, HAWAII REVISED STATUTES, AND OTHER LARGE PRIVATE TRUSTS.

SENATE RESOLUTION

REQUESTING THE DEPARTMENT OF COMMERCE AND CONSUMER AFFAIRS TO EVALUATE REGISTRATION, REPORTING, AND TRANSPARENCY MECHANISMS FOR TRUSTS FORMED UNDER CHAPTER 554G, HAWAII REVISED STATUTES, AND OTHER LARGE PRIVATE TRUSTS.

     WHEREAS, Chapter 554G, Hawaii Revised Statutes (Chapter 554G), authorizes permitted transfers in trust, including self-settled asset protection trusts that allow a settlor to transfer assets into trust while retaining certain beneficial interests; and

     WHEREAS, trusts formed under Chapter 554G may hold significant assets and are designed, in part, to provide creditor protection, wealth preservation, and estate-planning advantages; and

     WHEREAS, the Department of Taxation has confirmed that trusts formed pursuant to Chapter 554G are not currently tracked or classified in a manner that permits aggregate reporting regarding their number, assets, or income-reporting status; and

     WHEREAS, the absence of a tracking or reporting mechanism limits the State's ability to evaluate the scale, fiscal implications, and broader economic impact of these trust structures; and

     WHEREAS, legislation introduced during the Regular Session of 2026, including House Bill No. 2368, reflects legislative concerns regarding large private trusts, perpetual or long-duration trusts, and the need for transparency mechanisms sufficient to inform sound public policy; and

     WHEREAS, this body has a responsibility to ensure that statutory frameworks authorizing sophisticated trust structures are accompanied by appropriate oversight, reporting, and accountability mechanisms consistent with revenue integrity and the public interest; and

     WHEREAS, the Department of Commerce and Consumer Affairs administers registration, licensing, and regulatory oversight for certain fiduciaries, financial entities, and business actors operating in the State; now, therefore,

     BE IT RESOLVED by the Senate of the Thirty-third Legislature of the State of Hawaii, Regular Session of 2026, that the Department of Commerce and Consumer Affairs is requested to:

     (1)  Identify any existing registration, licensing, reporting, or regulatory requirements applicable to trusts formed under Chapter 554G, including requirements applicable to trustees, trust companies, or other fiduciaries administering such trusts;

     (2)  Evaluate whether existing law provides sufficient authority to require registration or periodic reporting of large private trusts formed under Chapter 554G, including reporting of aggregate asset ranges or threshold-based disclosures that would not reveal confidential beneficiary information but would provide policymakers with insight into scale;

     (3)  Assess whether statutory amendments would be required to establish a reporting framework for large private trusts exceeding specified asset thresholds, including potential annual registration or reporting obligations; and

     (4)  Provide recommendations regarding the feasibility of implementing transparency mechanisms for large or long-duration private trusts consistent with the public-policy objectives reflected in House Bill No. 2368 (Regular Session of 2026); and

     BE IT FURTHER RESOLVED that the Department of Commerce and Consumer Affairs is requested to submit a report of its findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2027; and

     BE IT FURTHER RESOLVED that a certified copy of this Resolution be transmitted to the Director of Commerce and Consumer Affairs.

Report Title: 

Trusts; Chapter 554G, Hawaii Revised Statutes; Department of Commerce and Consumer Affairs