Two Ways to Lose.

That is why a recent Hawaii decision repays close reading, even though it arises far from the world of trusts and offshore structures. Hallums v. Alston, decided by the Intermediate Court of Appeals of Hawaii on July 2, 2026, is at first glance a case about two lawyers, a police sergeant, and an anti-SLAPP statute (Hallums v. Alston, 2026 WL 1905523 (Haw. App., July 2, 2026); see also Jay Adkisson, Interplay Between The UPEPA And Rule 11 Explored In Hallums, Forbes, July 10, 2026). Read more carefully, it is a case about the two distinct legal machines the system keeps for dealing with claims that should never have been brought — and about how imperfectly those machines mesh with one another. For planners and their clients, it is a compact lesson in litigation exposure: how the law separates a non-viable claim from a frivolous one, why that distinction matters, and why the only reliable defense against either is a position that is defensible on its face, built and documented before the dispute arrives.

The underlying quarrel is the sort of internecine dispute that fills court dockets everywhere. David Hallums, a Honolulu police sergeant, also served as a vice-president of a national police association. When the association’s president wrote to the chief of police suggesting that Hallums’s conference attendance should be counted as personal leave rather than police duty, Hallums sued — alleging, among other things, that he had been wrongfully maneuvered out of his association office (Hallums, 2026 WL 1905523).

The wrinkle that makes the case useful came later. Hallums amended his complaint to add two attorneys, Paul Alston and Galen Chee, who had represented other parties in the dispute and had written to police investigators urging that Hallums’s conduct be examined. Against these two lawyers Hallums asserted defamation, false light invasion of privacy, and civil conspiracy (Hallums, 2026 WL 1905523).

The lawyers responded not with a conventional answer but with a special motion under Hawaii’s Uniform Public Expression Protection Act — the state’s anti-SLAPP statute, codified at Hawaii Revised Statutes Chapter 634G and enacted in 2022 (Haw. Rev. Stat. ch. 634G, enacted 2022 Haw. Sess. Laws Act 96 (S.B. 3329), effective June 17, 2022). Their argument was straightforward: the letters they had written were petitions to a government body on a matter of public concern — alleged police misconduct — and a lawsuit punishing that petition was precisely the kind of suit the statute exists to stop early. Alongside the anti-SLAPP motion, they asked the court for something more pointed: Rule 11 sanctions against Hallums and his counsel for filing what they characterized as a frivolous complaint (Hallums, 2026 WL 1905523).

The trial court granted the anti-SLAPP dismissal and awarded the lawyers their attorney fees, but it denied the request for Rule 11 sanctions, describing the question as “a very thin line” (Hallums, 2026 WL 1905523). On appeal, the Intermediate Court of Appeals affirmed the dismissal and the fee award — but it was not satisfied with “a very thin line” as an explanation for denying sanctions. It remanded, directing the trial court to make specific factual findings to justify whatever conclusion it reached on Rule 11 (Hallums, 2026 WL 1905523).

The reason the appellate court could affirm the dismissal yet remand the sanctions question is that anti-SLAPP dismissal and Rule 11 sanctions are not the same tool measured on the same scale. They are two different machines, calibrated to two different standards, and the gap between them is the whole lesson of the case.

The UPEPA machine asks whether a claim is viable. Once the movant shows the statute applies — that the claim targets protected expression or petitioning — the burden shifts to the plaintiff to establish a prima facie case as to each essential element of each cause of action (Haw. Rev. Stat. ch. 634G). The court then tests the claim on a standard that closely resembles summary judgment: does the responding party have enough to proceed, taking the evidence as it stands? Hallums did not. He could not marshal the proof each of his causes of action required, so the claims were dismissed. Critically, a claim can fail this test without being disreputable to have filed. A plaintiff can hold a good-faith, arguable legal position and still come up short on the evidence. UPEPA screens those claims out efficiently — but it does not brand the lawyer who brought them.

The Rule 11 machine asks a harsher and narrower question: was the filing frivolous? As the commentary on the case frames it, frivolousness means there is “literally no credible evidence and/or no legal authority” to support the claim — a filing untethered from any reasonable basis in fact or law (Adkisson, Forbes, July 10, 2026). That is a materially higher bar. Many claims that lose are not frivolous; they are merely wrong, or unproven, or optimistic. Sanctions are reserved for the filings that had no business existing at all.

Because the two standards diverge, a court can do exactly what the trial court in Hallums did: dismiss a claim as non-viable under the anti-SLAPP statute while declining to punish it as frivolous under Rule 11. The two results are not in tension. They occupy the space between “you did not prove it” and “you never should have said it.” The appellate court’s remand did not disturb that logic; it simply insisted that when a trial court walks that thin line, it must show its work — findings a reviewing court can actually test for abuse of discretion.

There is a detail in Hallums that clients should not skate past. Under Hawaii’s UPEPA, the fee award to a successful movant is mandatory: the court “shall award costs, reasonable attorney’s fees, and reasonable litigation expenses” to the party who prevails on the special motion (Haw. Rev. Stat. § 634G-9; Adkisson, Forbes, July 10, 2026). The statute also cuts the other way — a movant who brings a frivolous or purely dilatory anti-SLAPP motion can be made to pay the respondent’s fees — but the ordinary architecture is asymmetric by design. It puts real money behind the risk of suing over someone’s protected speech or petitioning.

This is the practical point that survives the translation from Hawaii police politics to the world of wealth planning. Litigation exposure runs in both directions. A client who sues carries the risk that a well-defended defendant — armed with a fee-shifting statute like UPEPA, or with a Rule 11 motion — turns the client’s own aggression into a bill. And a client who is sued wants to be the defendant whose position is so clean that the plaintiff’s claim collapses at the first serious test, ideally with fees attached. In both postures, the asset that matters is the same: a factual and structural position that is defensible on inspection, not one that depends on a judge’s patience or a sympathetic reading.

At Lighthouse, we spend our days on structures rather than defamation letters, but the discipline Hallums rewards is the identical discipline that governs whether a protective structure holds. The connective tissue is this: the law tolerates a great deal of ordinary weakness, but it punishes positions that look manufactured, controlled, or brought in bad faith — and it does so through machinery that is faster and cheaper than a trial. A client’s job, whether framing a claim or defending a trust, is to stay on the right side of every one of those screening mechanisms.

The lessons carry across almost cleanly.

A defensible position is built before the dispute, not after it. The plaintiff whose claim survives an anti-SLAPP motion is the plaintiff who had the evidence already assembled — contemporaneous, documented, real — rather than the one who hoped to develop it. It is the same with protection. A structure that survives a creditor’s attack is one that was seasoned: settled years before any claim was foreseeable, at a time when there was no one to hinder, delay, or defraud, and therefore no improper intent to infer. The transfer that is scrambled together after the storm appears is the asset-protection equivalent of the frivolous filing — it does not shield; it supplies evidence against the person who made it. The fraudulent-transfer “badges” — insider transfers, suspicious timing, retained control, concealment — are precisely the fingerprints a court reads to conclude that a position was contrived rather than genuine.

Control that is retained is control that will be discovered. Rule 11 punishes the filing that was never really tethered to a good-faith basis; fraudulent-transfer and sham-trust doctrine punish the structure that was never really given up. A trust in which the settlor keeps the switches, funds the vehicle on the eve of trouble, and quietly continues to enjoy the assets is not protection — it is a claim waiting for a court to declare it non-viable. The antidote is the same discipline the disciplined litigant practices: a transfer that is irrevocable and discretionary, so that the settlor genuinely relinquishes rather than merely relocates, and the benefit is a matter of trustee discretion rather than a guaranteed entitlement.

Independence is what makes a position survive scrutiny. The letters in Hallums survived because they were what they appeared to be — genuine petitions to a government body, not a pretext. A protective structure survives for the same reason: because it is independently administered by a genuine, arm’s-length trustee, not by the settlor wearing a different hat. That independence is the line between a trust and a sham, and it is the single feature most likely to convert a structure from “arguable” to “defensible on inspection.”

And where the law itself supplies the wall, use it. The deeper reason a well-built plan can afford to be candid is that, in the right jurisdiction, even a creditor who wins at home does not win everything. Where a robust charging-order remedy governs a properly structured limited liability company, the creditor who reaches a member’s interest gets a charge against distributions that may never be made — not the assets, not management, not a forced sale. That is the design Nevis has codified, in legislation Lighthouse Trust itself helped shape: the charging order as the creditor’s sole and exclusive remedy, expressly not a lien, reaching only distributions actually made, and sunsetting after a fixed period. A claimant facing that architecture is in roughly the position of the plaintiff facing a mandatory fee-shift and a summary-judgment-like screen: technically free to press on, but staring at a wall the law built on purpose. The same logic animates the hardened offshore jurisdictions — Cook Islands among them — that force a creditor to re-litigate locally under deliberately punishing rules rather than simply importing a foreign judgment.

Hallums also carries a quieter lesson about how imperfectly these protective mechanisms coordinate. The commentator on the case, who helped draft the UPEPA, observes a genuine procedural friction: an anti-SLAPP special motion typically must be brought inside a tight window, often around sixty days, while Rule 11’s safe-harbor requires that a sanctions motion be drafted, served, and then held for a waiting period before it can be filed (Adkisson, Forbes, July 10, 2026). A defendant who wants both remedies must sequence them carefully, and the statutes do not do that sequencing for him. He proposed conforming provisions during the drafting; they were not adopted (Adkisson, Forbes, July 10, 2026).

The practical takeaway generalizes beyond Hawaii. Protective mechanisms — statutory, procedural, or structural — do not automatically harmonize. They must be assembled by someone who understands how each interacts with the others, in what order, on what timetable. That is as true of a multi-jurisdiction trust-and-LLC structure as it is of a defendant coordinating an anti-SLAPP motion with a Rule 11 threat. Improvisation fails not because the individual tools are weak, but because a tool deployed at the wrong moment, or out of sequence, forfeits its protection.

Hallums v. Alston is not a wealth-planning case, and it would be a mistake to force it into one. But it is a clarifying one. It shows the law drawing a careful line between a claim that merely fails and a claim that never should have been made, and screening for each with fast, fee-shifting machinery that a trial court and an appellate court will hold to account. That is exactly the environment in which protective structures live or die.

The client who wants to be safe — whether as a plaintiff, a defendant, or the settlor of a trust that may one day be tested — does not want a position that is merely arguable. He wants a position that is defensible on inspection: assembled early, genuinely relinquished, independently held, fully disclosed, and situated where the law itself supplies the wall. Every one of those qualities is built on a clear day, long before anyone imagines it will be needed. It cannot be manufactured in the downpour. The court will see the difference — and, increasingly, it will make someone pay for it.