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“Health, Education, Maintenance, and Support” in Arizona Trusts

by | Feb 3, 2025 | Arizona Estate Planning, Arizona Trust and Estate Administration/ Probate

In Arizona trust law, the phrase “health, education, maintenance, and support” (often abbreviated as HEMS) plays a crucial role in defining how trust funds can be distributed to beneficiaries. Understanding this legal standard is essential for anyone creating or managing a trust.

What Does HEMS Mean?

HEMS is a standard used by trustees to determine what expenses can be paid from a trust for the benefit of its beneficiaries. Let’s break down each component:

  1. Health: This category covers medical expenses, including doctor visits, surgeries, prescriptions, dental care, vision care, mental health services, and even health insurance premiums.
  2. Education: Trust distributions for education can include tuition, books, school supplies, and expenses for vocational training, college, graduate school, or specialized learning programs.
  3. Maintenance: Maintenance refers to the beneficiary’s standard of living. This can cover housing costs, utilities, transportation, and other essential living expenses that help the beneficiary maintain a lifestyle similar to what they were accustomed to before the trust was established.
  4. Support: Support is often interpreted broadly and may overlap with maintenance. It can include financial assistance for day-to-day living expenses and other needs that promote the general welfare of the beneficiary.
Why Is HEMS Important?

The HEMS standard serves two primary purposes:

  1. Trustee Guidance: HEMS provides trustees with clear guidelines on how to make distributions. This helps trustees fulfill their fiduciary duty while avoiding disputes with beneficiaries.
  2. Tax and Legal Protection: Using the HEMS standard can help ensure that the trust qualifies as a “discretionary trust,” which may protect the trust assets from creditors and maintain favorable tax treatment.
Practical Examples
  • Paying for a beneficiary’s surgery (health) is likely an allowable expense.
  • Covering college tuition (education) would fit within the HEMS standard.
  • Providing funds for rent and groceries (maintenance and support) could also be appropriate.
Concluding Thoughts

If you’re establishing a trust or serving as a trustee in Arizona, understanding the HEMS standard is essential for making informed decisions about trust distributions. At Windrose Law Center, we help clients navigate the complexities of trust creation and administration. Contact us today to learn more about how we can assist you.

 

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