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The queen's estate


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POSTED: Sunday, May 17, 2009

Much conflict and heartache surrounded Queen Liliuokalani's personal estate planning in the early 20th century.

It included family entanglements and a decade-long litigation brought by Prince Kuhio, then Hawaii's delegate in Congress, in which he argued that Liliuokalani lacked capacity to write a will or establish a trust.

At stake were efforts to get compensation from the U.S. government for the crown lands; bequeaths of historical Hawaiian heirlooms and sites like Washington Place; and funds in a namesake trust, which today, totals nearly $700 million.

Not counting her claim to crown lands, Liliuokalani's net assets upon her 1917 death totaled $200,000 about $5 million today.

This drama is culled from legal documents, books, news accounts, and archived notes and diary entries. A footnoted version appears in the May issue of the Hawaii Bar Journal. It was written by co-authors of the landmark “;Broken Trust”; essay that launched reforms at Kamehameha Schools/Bishop Estate: Senior U.S. District Judge Sam King; Office of Hawaiian Affairs trustee Walter Heen, and UH law professor Randall Roth.

FIRST OF TWO PARTS

The public controversy surrounding Hawaii's last reigning monarch, Queen Liliuokalani, 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, Liliuokalani was in her 70s. 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 apportionment to her ... through Kalakaua's taking (her) ... lands, to ... when the (provisional government) and republic (took) the crown lands for their use — she was not fully aware (that) these actions were impoverishing her.”;

The Territorial Government provided Liliuokalani with a $12,000 annual pension during the last six years of her life. She also received substantial inheritances and benefited from the professional management of the inherited properties. Not counting her claim to compensation for crown lands taken at the time of the overthrow, Liliuokalani's net worth when she died was about $200,000. A comparable estate in 2009 might be in the vicinity of $5 million.

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 Nov. 11, 1917. Because her primary adversary was Prince Jonah Kuhio Kalanianaole, the controversy threatened to divide the Hawaiian community. Before it ended, there would be lies, recantations, confrontations, and permanent rifts of the kind Liliuokalani despised. Those closest to her, including Kuhio, would even call into question the queen's competence.

'THIS IS TOO IMPORTANT A MATTER'

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 Liliuokalani, left extensive handwritten notes regarding the role he played:

The 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.”;

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.”; He was a native of Mississippi who served on the Circuit Court bench in Hawaii 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.”;

The following is from Humphreys' handwritten description of his initial meeting with the queen. For many, the contents of this description will be controversial:

“;On Nov. 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 50 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. ... As 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. W.O. Smith has been identified for a number of years with various Hawaiian charities, in addition to having been identified with recognized established charities of a semi-public 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 Liliuokalani 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' 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' notes:

“;I said to the Queen ... it would probably be better for her to provide for the charities 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 ... after 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 lifetime, and not, as in the case of a will, after 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. Here is how Humphreys explained the issue:

“;I said to her ... you will be importuned, probably for life, 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 importunities may well be, 'The book is sealed. I cannot change this trust deed without the consent of my trustees.'”;

Humphreys' notes record that the queen then instructed him to provide for the amendment of the trust only with the consent of a majority of the trustees.

THE QUEEN'S OHANA

To understand a person's estate planning decisions, one must consider that person's relationships with the members of her immediate family, and with others who are close to her. Liliuokalani's husband, John Owen Dominis, had died 18 years earlier in 1891, well before this story begins. Had John still been alive in 1909, Liliuokalani might well have looked to him, rather than to others, for help in developing an estate plan.

The queen had no close blood relatives, but others, including three hanai children and a business manager, became trusted members of her ohana. For example, business manager Curtis Iaukea describes how he came to hold her power of attorney:

“;Early in November of 1909, I received a telephone message from John Aimoku, one of the queen's wards, saying that the queen wished to see me ... I found the queen with Aimoku sitting in the back parlor. Greetings over, she started the conversation by saying that she was planning to sail for the mainland in a few days to make one more effort to obtain recompense from the Congress for the loss of the Crown Land revenues since her dethronement, and wished (me) to take charge of her personal and business affairs during her absence. Glad of the opportunity to serve her, I consented. A power of attorney was drawn of which she signed and executed before Carlos A. Long, Notary Public.”;

In addition to the ward (hanai child) identified above — John Aimoku (”;Aimoku”;) — the queen had two other hanai children: Joseph Aea (”;Kaipo”;) and Lydia Aholo (”;Lydia”;). Liliuokalani referred to Aimoku, Kaipo and Lydia as princes and princess. Kaipo was the one with whom she had the most in common:

“;Kaipo was an accomplished pianist, by nature, not study, and (he) enchanted Queen Liliuokalani with music, song, laughter and gaiety. He was the perfect hanai son for her — carefree, always joking, spending money without regard. From birth he had been Liliuokalani's favorite, and still was.”;

Unfortunately, Kaipo ran with a bad crowd and was unreliable in business affairs. Talking about Kaipo, Liliuokalani told her advisers, “;He has his own land but I don't want him to know it.”;

Addressing Kaipo directly, Liliuokalani promised to give him his own home when he married his fiance, but Kaipo must first “;give up carousing ... (and) receiving low women.”; In a letter addressed to “;my son,”; Liliuokalani beseeched Kaipo to “;think of your wife-to-be ... (and) if sinners entice thee, consent thou not.”;

Liliuokalani's only hanai daughter, Lydia, made a point of keeping some distance between herself and Liliuokalani — for example, by living and working on the campus of Kamehameha Schools with Ida May Pope, the principal of the Girls' School. The queen once offered to pay Lydia whatever she was earning at Kamehameha Schools if only she would move back to Washington Place to live with the queen, but Lydia declined the offer.

“;Lydia, whom (Liliuokalani saw) only infrequently, was completely Ida Pope indoctrinated: prim, respectful, but above all strangely 'independent.' Lydia, perhaps more than the boys, had felt 'less royal.' Ida Pope left no doubt in (Lydia's) mind on this question, and in the previous years, Lydia had taken a step backward from the 'princes' because for many years she believed that both Aimoku and Kaipo were (the biological sons of the queen's husband) John Dominis ... This relationship placed them closer to the queen's love in (Lydia's) mind ... “;

Although the queen's husband, John Dominis, never acknowledged that either of the hanai princes was his son, many people believed that Aimoku was John's and that Aimoku had inherited his father's haole ways: “;Aimoku was his father's son — helpful in business matters to the queen, always referring to her as 'the queen.'”;

Aimoku and Liliuokalani had “;cried together”; over Kaipo's indiscretions, yet Aimoku resented that Kaipo was “;handsome, charming, as personable as David Kalakaua.”;

Likable or not, Aimoku was more dependable than Kaipo, and he had a closer relationship with the queen than did Lydia. Perhaps this explains why Aimoku played a much larger role in Liliuokalani's estate planning than did the other two hanai children.

THE QUEEN'S HOMES

Most people associate the mansion known as Washington Place with Liliuokalani because it was her residence immediately before, during, and after the overthrow. For almost all of the time that the queen was married to John, however, it belonged to John's mother, Mary Lambert Dominis. Mary's husband, a sea captain, had arranged for its construction shortly before he was lost at sea.

Liliuokalani resided with John at Washington Place in the years immediately following their marriage, but there was little aloha for her there. Mary Dominis did not appreciate Hawaiian culture or customs; she and her son “;believed completely in the rightness of their own ways and ideas, and anyone who differed was definitely wrong.”; The hanai system, for example, was “;pagan.”;

Under the circumstances, Liliuokalani had to be resourceful in maintaining her Hawaiianness while trying to build a happy life with a haole husband who was exceedingly solicitous of his mother. This could not have been easy. In the queen's words:

“;As (my mother-in-law) felt that no one should step between her and her child, naturally I, as her son's wife, was considered an intruder; and I was forced to realize this from the beginning. My husband ... would not swerve to the one side or to the other in any matter where there was danger of hurting his mother's feelings. I respected the closeness of the tie between mother and son, and conformed my own ideas, so far as I could, to encourage and assist my husband in his devotion to his mother.”;

Living at Washington Place with John and his mother did not get easier over time, but then something happened that literally had Liliuokalani dancing for joy. In 1868, the year of her 30th birthday and the sixth anniversary of her marriage to John, Liliuokalani inherited valuable property in Waikiki that included a home known as Kealohilani. In contrast to stately Washington Place, the one-story Kealohilani was open on two sides with a large and inviting living room “;filled with all things Hawaiian,”; where Liliuokalani and her ohana could gather in joy and hospitality:

“;Next to a satin pillow, embroidered in heavy thread proclaiming 'There Is No Place Like Home,' stood feathered kahilis. ... A feather cape, a knitted afghan, a dog's tooth necklace, a gold-plated bracelet — all intermingled in the home Liliuokalani came to love so dearly. 'I danced around the rooms. It was my own! Do you know what it means to have a place that is your own? I felt I'd never be alone again,' she later related to Lydia ...

“;Liliuokalani had at first assumed that John would come to live with her ... however, Mrs. Dominis (John's mother) and John had other ideas. (In their minds, Liliuokalani's) place was with her husband, and that was at Washington Place.”;

Liliuokalani took up residence at Kealohilani anyway. She encouraged John to join her, but he chose to be stay at Washington Place with his mother.

CLAIMS OF PRINCE KUHIO

Liliuokalani wanted badly to have children with John, but it was not to be. She had no descendants, according to Western law, which was blind to hanai relationships.

If Liliuokalani were to die without a valid trust or will, at least part of her probate estate would pass to her nearest blood relative — whom she believed to be her second cousin, Prince Jonah Kuhio Kalanianaole. In fact, Kuhio contended that he would be the queen's sole heir, because the children of Kuhio's deceased brother, David Kawananakoa, were one step further from the queen on the family tree. Perhaps Kuhio felt that he alone should take the queen's property because Liliuokalani had previously named him and his brother as successors to the throne.

The queen had no intention of dying intestate, however, and apparently had no desire to give any part of her estate to Kuhio. But there was a snag: Kuhio was Hawaii's sole delegate to Congress. Without his enthusiastic support, the queen's chances of receiving compensation from the United States government for the crown lands would be seriously diminished. Disinheriting Kuhio altogether could be problematic, but his attempt to borrow $1,000 to “;push her claims”; did not sit well with Liliuokalani.

FORMATION OF THE QUEEN LILIUOKALANI TRUST (QLT)

Assisted by her attorneys, Liliuokalani conveyed all her real property to three trustees (brother-in-law Archibald S. Cleghorn, business agent Curtis P. Iaukea, and attorney William O. Smith) on Dec. 2, 1909. She retained the right to use Washington Place and Kealohilani as her residences and to receive the trust's net income, all for the rest of her life. After the queen's death, Aimoku and his children would be entitled to reside at Washington Place, Kaipo could reside at Kealohilani, Iaukea would take fee simple ownership of a specific property in Waikiki, various individuals would receive life estates in specific properties or annuity payments, and the QLT trustees would use the rest of the trust's income to benefit orphan and indigent children, with preference given to Hawaiians of pure or part aboriginal blood. Thus began the Queen Liliuokalani Trust.

Contemporaneously with her execution of the trust document, Liliuokalani signed a pour-over will that bequeathed most of her personal mementos, heirlooms, crests, decorations, and insignias of royalty to the Bernice Pauahi Bishop Museum.

Kuhio would receive a bequest of $5,000, but only if the queen had received by the time of her death “;a sufficient sum”; from the United States government to compensate her for the crown lands. Also, Aimoku would receive any silverware bearing the Dominis name or initial. Iaukea recorded some of the queen's reasoning in his diary:

“;Whilst sitting with the queen this morning under the arbor in the front garden, where she often sat and mused by herself ... I said to her, 'You know, Your Majesty, that Prince Kalanianaole (Kuhio) expects you to leave Washington Place to him, he being your nearest of kin. Have you given this matter any thought?' She cast her eyes to the ground without speaking for fully a minute and when she looked up said, 'Yes, I know that the prince would like me to give Washington Place to him. But the property came to me through the Dominises and by right should go to ... Aimoku ... (He) is of his own blood.”;

Iaukea's notes record that Kuhio objected vehemently to this arrangement, and made a threat that he would later carry out:

“;To this, and the mere thought of having the old and historic (residence of the last reigning monarch) turned into a private home, after the queen's demise, for the use and occupation of one (an illegitimate child) who was not legally entitled to it, the prince and heir at law of the queen, Jonah Kuhio Kalanianaole, made strenuous objection. Saying to the queen, in my presence, that unless she left and devoted the home in such a way as to keep up the memory and sanctity of the place and premises for some beneficent and public purpose, he, as next of kin, would move and take steps to set aside her last will and testament.

———

COMING TOMORROW:

Liliuokalani faces the consequences of her actions — and Kuhio.