The HEMS standard: what "health, education, maintenance and support" means in a trust

The trust document controls. Still, the four words carry common meanings:

Health: medical, dental, vision and mental health care, insurance premiums, prescriptions, home health aides, assisted living or nursing home costs, and equipment. The tax regulation lists "medical, dental, hospital and nursing expenses and expenses of invalidism" as an example. Education: tuition, books, fees, and often room and board, for college, graduate and professional school, and trade or vocational programs. The regulation's example is "education, including college and professional education." Maintenance and support: day-to-day living costs such as housing, utilities, food, transportation, insurance and taxes. The regulation treats the two words as synonyms and says they aren't limited to the "bare necessities of life," and it accepts "support in his accustomed manner of living" as ascertainable (Treas. Reg. 20.2041-1(c)(2)).

So a HEMS trust is not a "bare minimum" trust. It is measured against the beneficiary's needs, usually in light of the lifestyle they had.

If you hold a "general power of appointment," meaning a power you can use for yourself, your estate or your creditors, the property under that power is included in your taxable estate at death (26 U.S.C. 2041(a)(2)). Letting such a power lapse or releasing it can also be treated as a gift (2514).

The HEMS exception is what makes a common plan work. Picture a husband's trust that, at his death, holds assets for his wife for life and then for their children. If the wife is the trustee and can pay herself anything she wants, the trust may be taxed again in her estate. If her power is limited to HEMS, it generally isn't.

With a $15,000,000 per-person exclusion in 2026, most Florida families won't owe federal estate tax either way. HEMS still matters for families near that line, for trusts written years ago when the exclusion was much lower, and for the creditor and Florida trust rules below.

Florida builds HEMS into its Trust Code. Unless the trust expressly says the rule doesn't apply, a person who is both a trustee and a beneficiary may not make discretionary distributions to themselves except for health, education, maintenance or support as described in sections 2041 and 2514. They also may not use trust money to meet their own legal support obligations, such as supporting their minor children (Fla. Stat. 736.0814(2)).

If the trust uses a broader standard, such as "happiness," the usual approach is to name an independent trustee or co-trustee to make those decisions. A family member can still serve for everything else.

HEMS sets a ceiling, not an entitlement. The trustee still has to use judgment:

Good faith. Florida requires the trustee to exercise discretion in good faith and in accordance with the trust's terms and purposes and the beneficiaries' interests. A court won't find abuse just because it would have decided differently (736.0814(1)). Fairness to everyone. When there are remainder beneficiaries, such as children who inherit after a surviving spouse, the trustee must act impartially, giving due regard to each beneficiary's interests (Fla. Stat. 736.0803). Other resources. Many trusts tell the trustee whether to consider the beneficiary's own income and assets. The tax regulation says that requirement doesn't affect whether the standard is ascertainable, but it changes the answer to many requests. Records. Keep each request, the reason, and what was paid, and pay providers directly when practical.

A beneficiary's creditors generally can't force a discretionary distribution or reach the beneficiary's interest in one (Fla. Stat. 736.0504(2)). When the beneficiary is also the trustee and limited by an ascertainable standard, a creditor can reach the interest only to the extent it could if someone else were trustee (736.0504(3)). Most family trusts also include a spendthrift clause, which Florida enforces when it restrains both voluntary and involuntary transfers (Fla. Stat. 736.0502).

A support standard may be the wrong tool for a beneficiary who receives, or may someday need, SSI or Medicaid. SSA treats trust principal as the beneficiary's resource if the beneficiary can direct its use for their support and maintenance under the terms of the trust (SSA POMS SI 01120.200). A trust that requires support payments, or that a beneficiary can enforce for support, may be counted, and payments for shelter can reduce SSI.

For a beneficiary with a disability, a third-party special needs trust usually gives the trustee sole discretion and says the trust supplements, rather than replaces, public benefits. Our special needs planning guide and the trust section of our estate planning page explain how those trusts work. A spouse who may need Medicaid raises related issues; see when the healthy spouse dies first.