And What Expenses Does It Cover?
If you are creating a trust — or you are a trustee or beneficiary of one — you may have seen the term:
“Distributions for Health, Education, Maintenance, and Support.”
This is commonly called the HEMS standard.
It is one of the most widely used distribution standards in estate planning because it balances flexibility with protection.
Here’s what it means — and what it actually covers.
What Does HEMS Stand For?
HEMS stands for:
- H – Health
- E – Education
- M – Maintenance
- S – Support
When a trust includes a HEMS standard, it allows the trustee to make distributions to the beneficiary for expenses that fall into these categories.
Why Is the HEMS Standard Used?
The HEMS standard is popular because it:
- Provides flexibility for real-life needs
- Offers guidance to trustees
- Helps protect trust assets from creditors
- Maintains certain tax advantages
- Prevents unlimited discretionary withdrawals
It creates a balance between access and structure.
What Counts as “Health”?
Health is interpreted broadly and typically includes:
- Medical expenses
- Doctor visits
- Dental and orthodontic care
- Vision care
- Prescription medications
- Health insurance premiums
- Mental health counseling
- Therapy
- Long-term care
- Rehabilitation services
In many cases, it also includes preventive care and necessary medical travel.
What Counts as “Education”?
Education also tends to be interpreted broadly and may include:
- Private school tuition
- College tuition
- Graduate school
- Trade or vocational programs
- Books and supplies
- Room and board
- Study abroad programs
- Tutoring
- Educational testing
Some trusts specifically define whether postgraduate education is included.
What Is “Maintenance”?
Maintenance generally refers to maintaining a beneficiary’s standard of living.
This may include:
- Housing costs (rent or mortgage)
- Property taxes
- Utilities
- Home repairs
- Food and groceries
- Transportation
- Clothing
- Insurance
- Reasonable vacation expenses
The key idea is preserving the beneficiary’s accustomed lifestyle.
What Is “Support”?
Support overlaps with maintenance and typically includes:
- General living expenses
- Basic lifestyle needs
- Expenses consistent with prior standard of living
Courts often interpret “support” in light of how the beneficiary was living before the trust became active.
What Does HEMS NOT Cover?
Generally, HEMS does not automatically include:
- Luxury purchases
- Speculative investments
- Gifts to others
- High-risk business ventures
- Large cash withdrawals for unrestricted use
However, much depends on how the trust is drafted.
Some trusts expand or restrict the standard.
Why HEMS Matters for Asset Protection
A HEMS standard is considered an “ascertainable standard” under tax law.
This is important because:
- It helps preserve creditor protection
- It can prevent trust assets from being included in a beneficiary-trustee’s taxable estate
- It limits abuse while still allowing meaningful access
If a beneficiary is also serving as trustee, using HEMS language helps maintain legal safeguards.
Can a Trustee Say No?
Yes.
The trustee has a fiduciary duty to:
- Act in the beneficiary’s best interest
- Follow the trust terms
- Preserve assets when appropriate
- Apply the HEMS standard reasonably
The trustee does not have to approve every request if it falls outside the standard.
Can HEMS Be Customized?
Absolutely.
Trusts can be drafted to:
- Broaden HEMS
- Add specific permitted expenses (e.g., home purchase or business startup)
- Allow discretionary distributions beyond HEMS
- Include co-trustee or corporate trustee oversight
The language matters.
Bottom Line
The HEMS standard provides a practical middle ground:
- More flexible than rigid age-based distributions
- More protective than unlimited discretion
- Structured but adaptable
It allows beneficiaries to live comfortably while preserving the long-term integrity of the trust.
HEMS vs. Fully Discretionary Trust
What’s the Difference?
When drafting a trust, one key decision is whether distributions should follow a HEMS standard (Health, Education, Maintenance, and Support) or be left to the trustee’s full discretion.
Here’s how they compare:
Comparison Chart
| Issue | HEMS Trust | Fully Discretionary Trust |
|---|---|---|
| Distribution Standard | Limited to Health, Education, Maintenance, and Support | Trustee may distribute for any reason permitted by trust |
| Guidance to Trustee | Clear framework for evaluating requests | Very broad authority; less defined boundaries |
| Beneficiary Expectations | Some predictability | Less predictability |
| Asset Protection | Strong creditor protection if properly drafted | Often strongest protection (beneficiary cannot compel distributions) |
| Estate Tax Benefits (if beneficiary is trustee) | Preserves tax advantages due to “ascertainable standard” | Risk of estate inclusion if not carefully drafted |
| Ability to Deny Requests | Yes, if outside HEMS | Yes, for virtually any reason consistent with fiduciary duty |
| Flexibility | Moderate | Very high |
| Risk of Trustee Abuse or Conflict | Lower due to defined standard | Higher if trustee is not neutral or careful |
| Court Enforceability | Beneficiary can challenge if HEMS ignored | Harder for beneficiary to compel distribution |
