A court-appointed master for the Kamehameha Schools is recommending a one-year extension for trustee Robert Kihune, whose term ends next month.

In a 117-page report filed with the state Probate Court last month, attorney David Fairbanks also recommended a one-year extension for trustee Diane Plotts and two-year extensions for board members Douglas Ing and Nainoa Thompson.

"The potential for loss of substantial institutional knowledge, wisdom, continuity, momentum and even stability is great, and the threats of an interruption in the present, established path of governance, a less-than-smooth transition ... and interruption of important, newly implemented programs are very real," Fairbanks wrote.

Kihune, a retired Navy vice admiral, will step down June 30 after having served on Kamehameha School's board since 2000.

A Probate Court-appointed trustee screening committee recently named three finalists to replace Kihune. They included state Department of Hawaiian Homes Lands Chairman Micah Kane, state Community Development Authority Executive Director Anthony Ching and former Kamehameha Schools executive and ex-DHHL Chairman Ray Soon.

Deputy Attorney General Hugh Jones, whose office serves as the legal guardian for the estate, had no comment, saying he has not yet completed his review of Fairbanks' recommendations.

A trust spokesman also had no comment but said the estate will file a response to Fairbanks' recommendations with the Probate Court shortly.

Kamehameha Schools, which was established by the 1883 will of Princess Bernice Pauahi Bishop, is a nonprofit charitable trust that educates Hawaiian children.

It is one of the nation's largest charities and is Hawai'i's largest private landowner, with more than 360,000 acres.

In addition to extending current trustees' terms, Fairbanks also recommended that future board members receive a 10-year term.

Currently, all five trustees serve five-year terms and are eligible for up to two terms. Thompson's term ends next year, Plotts' tenure ends in 2011 and Ing's term ends 2012.

Trustees earn about $90,000 a year.

Fairbanks said he was satisfied with the progress made by Kamehameha CEO Dee Jay Mailer and her management team but expressed concern about continuity within Kamehameha's boardroom in light of the recent financial challenges faced by the trust.

His report noted that the value of the trust's endowment dropped by 20.4 percent from $9.44 billion on June 30, 2008, to $7.36 billion on Dec. 31, 2008, as a result of the global financial downturn and the national economy.

"The recent dramatic downturn in the economy, significant losses in investments, the decline in the real estate market with attendant reductions in revenues and lower values, and their potential adverse impact upon the trust's educational programs including outreach programs, make it critical that the transition to an essentially brand new board of trustees be as smooth as possible," he said.