May 2009 #2. The Queen's Estate.

Author:by Samuel P. King, Walter M. Heen, and Randall W. Roth
 
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Hawaii Bar Journal

2009.

May 2009 #2.

The Queen's Estate

Hawaii State Bar JournalMay 2009The Queen's Estateby Samuel P. King, Walter M. Heen, and Randall W. RothThe public con-troversy surrounding Hawai'i's last reigning monarch, Queen Lili'uokalani, is well known. People seem to know relatively little, however, about the intensive planning and years of litigation that surrounded her personal estate. This is surprising because archives around the state contain thousands of pages of news coverage, court documents, and handwritten notes of the participants.

Although the facts of this story are unique, key elements-a disputed inheritance and a rightfully peaceful old age dogged by bitterness, scheming, and internecine discord-are ancient and universal.

By the time the events described here began in 1909, LUi'uokalani was in her seventies. She had lost a kingdom and a way of life and had to endure strained relationships with those around her, including her three hanai children. She was tired. Moreover, her best-known biographer recounts that she had never been concerned, in a Western way, with her own property interests:

Liliuokalani had never understood money as the haole did. Throughout her life she had watched land and land revenues slip away from her .... From the time she lost her hanai inheritance in 1848, through Bernice's small appor -tionment to her . . . through Kalakaua's taking [her] . . . lands, to . . . when the [provi -sional government] and republic [took] the crown lands for their use - she was not fully aware [that] these actions were impov -erishing her (fn2)

The Territorial Government provided Lili'uokalani with a $12,000 annual pension during the last six years of her life(fn3). She also received substantial inheritances and benefited from the professional management of the inherited properties(fn4). Not counting her claim to compensation for c rown lands taken at the time of the overthrow(fn5),Lili'uokalani's net wo rth when she died was about $200,000(fn6).A comparable estate in'"2009 might be in the vicinity of $5 million.(fn7)

The bitter legal disputes that surrounded the Queen's personal estate began in 1910 and were not finally resolved until 1923, six years after her death on November 11, 1917. Because her primary adversary was Prince Jonah Kuhio Kalaniana'ole, the controversy "threatened to divide the Hawaiian community(fn8) Before it ended, there would be lies, recantations, confrontations, and permanent rifts of the kind Lili'uokalani despised. Those closest to her, including Kuhib, would even call into question the Queen's competence.

"This Is Too Important a Matter.

It Needs the Services of an Attorney."

The story begins in November of 1909, when the Queen asks her business manager, Curtis P. Iaukea, to prepare a legal document. Iaukea, a man with a commanding presence who had served as the Secretary of Foreign Affairs under both Kalakaua and Lili'uokalani, left extensive handwritten notes regarding the role he played:

[T]he Queen ... handed me a document purporting to be her last Will and Testament with instructions to make certain changes therein in conformity with certain expressed wishes she had written on a separate sheet and attached to the instrument. Adding that she wanted me to make the change myself as she did not wish any one else to know .... I said, "This is too important a matter. It needs the services of an Attorney." The next day she informed me that she wanted to engage Judge Humphreys, as he had done some legal work for her and [she] had every confidence in the Judge. (fn9)

Abram S. Humphreys would later be described by fellow members of the bar as "prompt, energetic, and indefatigable," and as someone "who possessed and displayed those qualities of mind and heart which endeared him to a wide circle of friends."(fn10) He was a native of Mississippi who served on the circuit court bench in Hawai'i from 1900 to 1902. As a judge, Humphreys was considered "obnoxious to the Dole Government," and someone who "did not permit contempts of court to go unpunished."(fn11) The following is from Humphreys's handwritten description of his initial meeting with the Queen. For many, the contents of this description will be controversial:

On November 25, 1909 . . . I called at the Queen's mansion, Washington Place, and was then informed by her that she wished me to prepare for her a last will and testament, that it was her intention to leave shortly for the mainland and she wished it drawn before leaving Honolulu.....She stated that she wished to make provision to do something for her people; that she had thought of leaving Washington Place, her home, to be used as a place where Hawaiian music and the Hawaiian language could be taught. She asked me what I thought of the two or either of them.

I then stated to her that the Hawaiian language was not a language of art or science or commerce. And I said to her, in fifty years from now, before your body will have fairly moulded into the dust, one who speaks the language with a fair degree of excellence will be looked upon as a curiosity.....[A]s to Hawaiian music; it is, of course, most appealing; it does ravish the ear; it is beautiful, but it is not scientific. A knowledge of it is easily acquired, and it seems to me that it would not be wise to establish a foundation for its perpetuation.

Humphreys then recommended that the Queen engage someone who worked closely with many charities, William O. Smith, to help her select a "proper" charitable mission:

I then said to her, "Mr. WO. Smith has been identified for a number of years with various Hawaiian chanties, in addition to having been identified with recognized established chanties of a semi-puUic character. He has acted as . . . the almoner of noble individuals who have given of their bounty to promote the good of the Hawaiian people, and I should like very much to have your permission to associate with me,Mr. W.O. Smith, I believe it to be highly to your advantage to have the benefit of his experience and of his wise counsel."

She said, in reply to that, that she would be very pleased, indeed, to have Mr. Smith join me . . . and that I might bring him with me to see her the following day if he were willing to come.

Smith had been the attorney general for the provisional government, but Lili'uokalani evidently did not hold that against him. She met with both Smith and Humphreys the next day at Washington Place to continue the conversation about her estate plan. Here are Humphreys's notes about that meeting:

In introducing Mr. Smith or rather the topic of conversation, I said for the benefit of Mr. Smith, what I had previously said to the Queen with reference to Hawaiian music and teaching the Hawaiian language. The Queen then spoke about establishing a library, to which Mr. Smith called her attention to the fact that we had a large public library which adequately met the demands of the community.

The Queen . . . asked Mr. Smith for some suggestion, and he then said, he thought it would be a beautiful idea to make provision,in a spirit of charity, for the benefit of Hawaiian orphan children, telling her there was no institution of that sort in Honolulu, and that the need of such an institution was apparent every day to those who kept in touch with the Hawaiian people,who knew their poverty and environment. The Queen thought the suggestion a wise one [and] said so ... .

A trust with a charitable mission can be created by the terms of a will, as Princess Bernice Pauahi Bishop had done years earlier (a testamentary trust), or the trust can be created and funded currently (an inter vivos, or living, trust). Humphreys and Smith recommended that the Queen fund a living trust that would benefit only her for the rest of her life and then continue in perpetuity to carry out the charitable mission. Here is a record of how the actual conversation went, including the reasons for the Queen's decision to use a living trust, according to Humphreys's notes:

I said to the Queen . . . it would probably be better for her to provide for the chanties which she had in mind by means of a trust deed, rather than by will, and I explained to her fully the difference between a trust deed and a will: not going into attenuated detail, but making such an explanation that would convey to the mind of an ordinarily intelligent lay person the distinction between the two.

I said to her, for instance, that a will could be . . .attacked . . . ajter her death, when she would not be here to defend it. I then told her that a trust deed . . . would have this advantage over a will; namely, if any attack were made upon it, such attack would probably be made in her Ifetime, and not, as in the case of a will, afier her decease.

There was one more important matter to resolve Retaining the right to change the trust only with the trustees' consent could protect the Queen from those who might try to take advantage of her well-known generosity.(fn12) Here is how Humphreys explained the issue:

I said to her . . .you will be importuned, probably for Ife, as the years go by, by those about you to provide for them, they claiming that they have some call upon your bounty. If this trust deed is made, your answer to all these demands and all these...

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