Mental capacity at core of Kawananakoa case

The Honolulu tax attorney who drafted Abigail Kawananakoa’s $215 million trust says the Campbell Estate heiress was always adamant about protecting the largest part of her estate for the Native Hawaiian community.

What’s more, Steven Rinesmith says both he and Kawananakoa’s former attorney and now-trustee, James Wright, were admonished by their client to defend her trust against anyone who would alter its intent and meaning after she was either deceased or unable to handle her affairs.

That’s why, Rinesmith says in court documents, Kawananakoa insisted he write the trust document with a disability clause requiring a higher level of mental capacity for her to maintain control as trustee.

Attorneys for Wright and the Abigail KK Kawananakoa Foundation, the Native Hawaiian charity described in the trust, are urging the court to respect the woman’s wishes and, as a result of her current disability, follow the succession plan she originally approved for the document.

But attorneys for Kawananakoa and her wife, Veronica Gail Worth, dispute the assertion, saying a critical section of the trust that addresses the “powers reserved by settler” does not contain language requiring a higher level of thinking.

Mental competence is at the center of the ongoing legal battle over the Abigail K.K. Kawananakoa Revocable Living Trust.

The dispute flared up last summer after Kawananakoa suffered a stroke and Judge R. Mark Browning granted Wright, the successor trustee, control of the estate after doctors indicated the heiress was incapacitated. The declaration was challenged in court by Worth, who is seeking to bring control back to the 92-year-old Kawananakoa.

A psychiatrist hired by the court to conduct a medical evaluation concluded that Kawananakoa does not have the mental capacity to manage her own financial affairs as a result of the stroke.

However, a special master assigned to advise the judge is recommending that Kawananakoa be declared mentally capable of changing or revoking her trust and also of removing and replacing the trustee. James Kawachika said Kawananakoa needs only testamentary capacity, or the minimum level required to make out a will.

A hearing is scheduled for Sept. 10 on a petition to reverse Wright’s appointment as trustee. If he is removed, it would not only return control to Kawananakoa but pave the way for the trust to be turned over to a trio of trustees, one of them being Worth.

The original parties in the case are under an order from Browning not to talk to the press about any issue that remains in dispute.

In court records, Wright and the newly installed trustees of the Abigail KK Kawananakoa Foundation say they are trying to preserve and protect the $100 million or so earmarked for Native Hawaiian charitable causes following her death.

One of the ways they are doing so is by arguing that control of the trust requires the ability to take care of one’s financial affairs. They say Kawananakoa insisted on the higher standard.

In an Aug. 7 filing, the foundation urges the court to talk to Rinesmith, the attorney who drew up the trust.

While Rinesmith declined to talk to a reporter, citing attorney-client privilege, documents filed in the dispute’s case file show that he insists that Kawananakoa was adamant that her trust not be altered and that her intent be followed.

In a February letter to Kawananakoa attorney Michael Lilly, he indicated she was motivated in her vigilance by “the abuses of the former Bishop Estate trustees, the sad history of the Lunalilo Home and the abuses that had occurred with the Campbell Estate.”

“Miss Kawananakoa clearly and vociferously directed me to explain her intent to anyone who tried to change her trust. She gave me this direction several years ago and repeated it last April,” he said in another letter to Lilly in March. “Her greatest concern has always been that her trust would be altered after she was unable to defend her wishes.”

In another filing, the foundation urges the court to reject the special master’s report because it disregards her intent that only she has the power to amend or revoke her trust, or change the trustee, unless she is disabled for the purposes of her trust.

“Allowing her to make changes to her trust when she cannot understand the possible impacts and consequences of those changes because she is unable to administer her financial affairs would only disrespect Ms. Kawananakoa and the careful consideration she gave to administering her assets, prior to her disability,” the Aug. 7 filing says.

“Testamentary capacity has no place in this probate proceeding in which Ms. Kawananakoa decided that a higher standard should control,” it adds.

In a response filed with the court, Lilly says that while other sections of the trust discuss limitations because of disability, the paragraphs that talk about her power to revoke, amend and remove trustees do not.

Lilly argues that Rinesmith’s declaration of Kawananakoa’s intent is inadmissible since the language of the trust is “unambiguous.”

Additionally, Rinesmith’s input is a violation of the attorney-client privilege afforded to Kawananakoa and should be stricken, he says.

As for what the judge might rule, Browning may have already signaled which way he’s leaning. During a hearing in July, he said the fundamental question facing the court is whether Kawananakoa has testamentary capacity.

“That’s the fundamental issue,” he repeated.

In an interview last week, attorneys with the Native Hawaiian Legal Corporation, which is representing the foundation, urged Browning to set aside the recommendation of the special master and appoint a guardian ad litem to investigate whether Kawananakoa has been adequately represented in the proceeding.

“This woman was so strong and deliberate with everything she did, and now she’s so vulnerable,” said Rosanne Goo, co-counsel with the Native Hawaiian Legal Corporation.

Goo and attorneys Camille Kalama and Summer Kupau-Odo said it’s their obligation as Hawaiians to protect the “kupuna” and her legacy as “an alii,” or Hawaiian nobility. Kawananakoa, they said, had really stepped up her activism in support of the Hawaiian people and issues in recent years.

“We really need to see she’s OK,” Goo said. “In ancient times the alii didn’t just take care of themselves, they took care of their people. And for her to recognize to do it with all of her heart and soul, that’s why we’re here.”