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Judge declares princess unfit to manage $215 million trust

The fate of a Hawaiian princess’s fortune may not seem applicable to most Californians’ lives, but her case reflects a reality that many trustees and elderly heirs face every day.

After a long and convoluted trust dispute, a judge in Hawaii has declared that Abigail Kawananakoa, a descendant of royalty and the heir to a trust worth $215 million, is no longer capable of making financial decisions regarding her estate.

Who can control a princess’s fortune?

Kawananakoa recently suffered a stroke that left her cognitively impaired. After the stroke, she fired her longtime attorney and trustee, replacing him with three other trustees. This triggered a years-long dispute regarding the princess’s ability to make major decisions about the trust.

Ms. Kawananakoa insists that she was of sound mind when she designated her three new trustees. However, the former trustee claims that the heiress was the victim of undue influence and is mentally unfit to make major financial decisions. Ultimately, determined that Kawananakoa was capable of firing the former trustee, but not capable of appointing new ones. He placed control of the trust with First Hawaiian Bank.

Many families face trust disputes

Trust disputes are familiar to many people, not just Hawaiian royalty. When an elderly person makes dramatic changes regarding their estate, family members may question whether the person in question is cognitively sound, or is the victim of elder abuse or undue influence. Sometimes, trustees or relatives must proceed to court to seek control of a trust.

For senior citizens who feel that they are mentally capable of making financial decisions for themselves, this process can be emotionally difficult. They find that they must prove to a court that they are of sound mind and body, able to manage their own trusts.

Trust litigation is painful, but necessary

Trust disputes can be heart-wrenching for families, causing rifts that take years to heal, if ever. However, trust litigation is often necessary for determining whether someone is mentally fit to manage their estate, or whether someone else must step in and take over.