HEMS in Trusts: What It Is, How Discretionary It Is, and What Happens When the Trustee and Beneficiary Disagree
Creating a trust is one of the most powerful ways to manage your legacy, protect assets, and provide long-term financial security for loved ones. But once the ink dries on your trust document, the real work begins—especially for the trustee responsible for managing and distributing funds. One of the most common phrases found in trust documents is the “HEMS standard.” But what exactly is HEMS, and how flexible is it?
Even more importantly: what happens when the trustee and the beneficiary don’t agree on what qualifies?
In this article, we’ll unpack everything you need to know about the HEMS standard:
- What it is
- Why it’s used
- How much discretion trustees really have
- What beneficiaries can do if they disagree
- And how to draft better trusts to avoid future conflict
Let’s dive in.
What Is HEMS? Breaking Down the Acronym
HEMS stands for Health, Education, Maintenance, and Support. These four categories define the limits of what a trustee can distribute trust funds for—unless the trust includes broader or narrower language.
Let’s take a closer look at each term:
1. Health
This includes expenses related to the physical and mental well-being of the beneficiary:
- Medical care (doctor visits, surgeries, prescriptions)
- Dental work
- Vision care
- Health insurance premiums
- Counseling or mental health therapy
- Drug rehabilitation programs
- Long-term care and assisted living
In short, if it helps preserve or improve health, it likely qualifies.
2. Education
Education expenses are generally interpreted broadly and include:
- K-12 private school tuition
- College tuition
- Graduate school expenses
- Books and supplies
- Room and board
- Study abroad programs
- Vocational and trade schools
Even continuing education classes or professional development may qualify under this umbrella, depending on the beneficiary’s circumstances.
3. Maintenance
This is where things get a little fuzzy. “Maintenance” refers to maintaining the beneficiary’s customary standard of living. That can include:
- Rent or mortgage payments
- Utility bills
- Food and groceries
- Clothing
- Transportation (car payments, fuel, insurance)
- Basic home upkeep
This is the most subjective category and often the source of disagreements between trustees and beneficiaries.
4. Support
Support is closely related to maintenance but can include more general assistance:
- Childcare expenses
- Travel necessary for family or work
- Cell phone plans or internet access
- Life insurance premiums
The key phrase is often “in accordance with the beneficiary’s accustomed lifestyle.” What that looks like will vary widely based on the trust’s history and the beneficiary’s past.
Why Use the HEMS Standard in a Trust?
The HEMS standard strikes a balance between control and flexibility. It offers several legal and practical benefits:
✅ Protects Beneficiaries from Themselves
Some beneficiaries may not be financially savvy or disciplined. By limiting distributions to HEMS purposes, the trust helps prevent wasteful spending or frivolous purchases.
✅ Protects the Trust from Creditors
Under many state laws (including Texas), if a trust limits distributions to HEMS, creditors of the beneficiary often cannot force the trustee to make a payout. That’s a key feature for protecting assets long-term.
✅ Protects the Trustee from Legal Liability
Trustees have a fiduciary duty to follow the terms of the trust. When those terms are vague, trustees are left in a legal gray zone. The HEMS standard provides a clear legal framework for what is and isn’t allowed—shielding the trustee from claims of misconduct.
✅ Preserves Tax Advantages
HEMS is an “ascertainable standard” under the IRS code.
Bottom line? HEMS is clear enough for legal compliance, but flexible enough to meet real-life needs.
How Much Discretion Does a Trustee Have with HEMS?
Here’s where things get tricky.
Even with HEMS in place, the trustee has a lot of discretion—especially when the trust uses phrases like:
- “The trustee may, in their sole and absolute discretion, distribute funds for the health, education, maintenance, and support of the beneficiary.”
- “The trustee shall consider the beneficiary’s other sources of income before making distributions.”
So how much freedom does the trustee really have?
Discretion Depends on the Language
- “May distribute” gives the trustee broad power to decide when and whether to distribute.
- “Shall distribute” means the trustee is obligated to make reasonable distributions for HEMS if a qualifying need arises.
- “In the trustee’s sole discretion” provides the widest latitude.
- “In the trustee’s reasonable discretion” adds a legal standard that can potentially be challenged in court.
This discretion is vital, especially when managing long-term or multi-generational trusts. But it can also lead to tension and disputes.
What If the Beneficiary and Trustee Disagree on a HEMS Distribution?
Disagreements between trustees and beneficiaries are common—and understandable.
🧍♂️ The Beneficiary’s Perspective:
They often view the trust as “their money” and may feel entitled to distributions for things like:
- A new car
- A destination wedding
- Home renovations
- Travel for leisure
- Starting a business
They may believe these expenses fit under “support” or “maintenance.”
🧍 The Trustee’s Perspective:
Trustees must follow the letter and spirit of the trust. They’re liable if they distribute outside the trust’s boundaries.
They might view the same expenses as:
- Unnecessary
- Outside the scope of HEMS
- Risky to the trust’s long-term health
- Violating their fiduciary duties
This can cause friction—especially when the trustee is a sibling, stepparent, or corporate trustee unfamiliar with the beneficiary’s lifestyle.
What Happens in a Real Dispute?
If communication breaks down, here are the possible next steps:
1. Written Request + Trustee Response
Beneficiaries should make requests in writing, explaining why they believe the expense qualifies under HEMS. Trustees should respond in writing as well, citing the trust language and reasoning for any denial.
2. Mediation
Some trusts include a mediation clause, or the parties can voluntarily seek help from a neutral third party. Mediation is faster, cheaper, and more private than going to court.
3. Trust Protector Involvement
Some trusts name a trust protector—a neutral party who can break deadlocks, replace the trustee, or clarify intent.
4. Court Petition
If all else fails, the beneficiary may petition the probate court to:
- Review the trustee’s actions
- Interpret the trust language
- Remove the trustee for abuse of discretion
Texas courts are generally reluctant to intervene unless the trustee’s behavior is clearly unreasonable, arbitrary, or in bad faith.
Tips for Trustees: How to Avoid Conflict
If you’re serving as a trustee, your job is tough—but not impossible. Here’s how to protect yourself:
- Document everything – Keep written records of all requests, approvals, and denials.
- Ask for backup – Get receipts, quotes, or letters showing how the request relates to HEMS.
- Communicate early and often – Don’t go radio silent. Provide timelines and rationales.
- Don’t guess – If unsure, ask a lawyer for help interpreting the trust.
- Be consistent – Don’t approve something once and deny a similar request later.
Real Example: The Car Dispute
Let’s say the beneficiary asks the trustee for $65,000 to buy a Tesla Model Y. The trustee says no, claiming a used Honda Civic would be a better fit.
Who’s right?
It depends.
If the trust says “maintenance in accordance with lifestyle” and the beneficiary is used to luxury cars, the Tesla might be appropriate. But if the trust is modest and meant to last 30 years, the trustee could rightly decline to preserve funds.
There’s no one-size-fits-all answer—just careful judgment, clear language, and wise trusteeship.
📞 Conclusion: When in Doubt, Get Professional Guidance
Trusts are powerful tools, but they’re only as good as the guidance and communication around them.
If you’re a:
- Beneficiary unsure why your request was denied,
- Trustee worried about overstepping your authority,
- Or grantor drafting a trust you want to withstand future drama…
We’re here to help.
At Mike Massey Law, we’ve advised thousands of Texas families on smart trust design, trustee training, and beneficiary education. We’ll make sure your wishes are honored—and your family protected.
👉 Book a Trust Consultation Now
This blog post is for informational purposes only and does not constitute legal advice. Always consult a licensed estate planning attorney before making decisions about your trust or fiduciary responsibilities.
