Judge finds Kawananakoa unfit to change her $215M trust

Abigail Kawananakoa’s bid to regain control of her $215 million trust was blocked in court Monday by a judge who concluded the woman’s mental capacity is impaired due to the stroke she suffered last year.

First Circuit Court Judge R. Mark Browning ruled that the 92-year-old Campbell Estate heiress is incapable of changing or revoking her trust or firing and replacing its trustee.

He did, however, remove the current trustee, James Wright, and appointed First Hawaiian Bank, pending its approval, as Wright’s successor. The bank was already spelled out as Wright’s successor in the trust’s document.

Browning said he removed Wright because he was persuaded that Kawananakoa doesn’t like her former attorney of nearly 20 years and that the removal of Wright would be in Kawananakoa’s best interest.

The ruling effectively ends a probate court fight that erupted last year after Kawananakoa suffered a stroke and Wright, the successor trustee, petitioned the court for control of the estate in a move that was spelled out in the trust’s successorship plan in the event that the heiress became incapacitated.

But Veronica Gail Worth, Kawananakoa’s life partner of more than 20 years and now wife, challenged the declaration, insisting that Kawananakoa is mentally capable of handling her own affairs.

At least half of the estate is expected to underwrite the Abigail K.K. Kawananakoa Foundation, which was set up by Kawananakoa to become a charity to fund Native Hawaiian causes following her death.

On Monday, Browning said that while Kawananakoa has been proven to have testamentary capacity — or the same level of mental acuity required to make a will — her estate requires a greater level of oversight, that of financial capacity.

In making his ruling, Browning disagreed with the conclusion of the special master he appointed to evaluate the case and determine whether Kawananakoa is competent to manage her trust.

Honolulu Attorney James Kawachika had recommended to Browning that Kawananakoa be declared mentally capable of changing or revoking her trust and of removing and replacing the trustee.

In a report to the judge, Kawachika recommended that Browning explore the possibility of reaching a settlement that would include the voluntary resignation of Wright as successor trustee and the appointment of a trio of co-trustees: Honolulu accountant Warren Duryea, Kawananakoa’s long-time bookkeeper Betty Lou Stroup, and Kawananakoa’s wife, Veronica Gail Worth.

But Browning rejected that proposal and invalidated a recent trust amendment naming the trio as trustees.

In his ruling, Browning agreed with the findings of a Los Angeles psychiatrist who evaluated Kawananakoa. In his independent medical examination, David Trader concluded the woman did not have the kind of financial capacity required to make complex decisions.

Outside the courtroom, attorneys for Kawananakoa and Worth expressed disappointment and said they would be talking to their clients about what actions to take next, including the possibility of an appeal.

In court, however, Browning urged the parties to refrain from further prolonged litigation and to instead focus on compassion and care for the welfare of Kawananakoa, a well-known philanthropist and community activist.

“It would be unfortunate for her to live the rest of her years under the spectre of litigation,” he said.

Wright, who was not present at the hearing, said Monday’s ruling was the best possible result.

“I’m delighted,” he said, noting that he formally offered to resign as trustee in favor of First Hawaiian more than a year ago but it was rejected.

Wright said the turmoil of the court case over the past year took a toll on him and his family. But, he said, he was committed to protecting the largest part of the trust for the Native Hawaiian community.

“It was important to her to leave the trust to the Hawaiian people,” he said. “She made me promise on multiple occasions that, no matter what happened, I would not give up and make sure her legacy was preserved.”

Native Hawaiian Legal Corp.’s Camille Kalama, attorney for the Abigail KK Kawananakoa Foundation, said she was pleased Browning chose to protect Kawananakoa by following the terms of her trust before she was incapacitated.

“It’s clear that Abigail Kawananakoa needs to be protected,” added Lilikala Kameeleihiwa, a foundation trustee. “I think he’s trying to protect her, and I think that’s good.”

Still, she said, “I’m concerned that this is something we’re going to have to keep an eye on as a Hawaiian community for quite awhile.”

Worth’s attorney, Michael Rudy, said it was Wright who cultivated the “false narrative” and “fake news” that this was a battle between Worth and the Hawaiians.

“It has never been that case at all,” he said, adding that Kawananakoa and Worth remain committed to the Native Hawaiian community.

After the hearing Kawananakoa’s attorney, Michael Lilly, urged the media to back off.

“This is her estate, her life. She has a loving marriage. She is a private person, and to be put in the news for a year, to have her personal affairs to be discussed publicly, has been outrageous and sad,” he said. “She really is entitled to be left alone.”