Many trusts say that “income” and/or “principal” are distributed for the beneficiary’s “Health, Education, Support and Maintenance” (“HEMS”). Why is the HEMS standard used, what does it mean, and how is it applied and enforced?
The HEMS standard is an “ascertainable standard”. It is an objective (measurable) standard. A non-ascertainable distribution standard – e.g., distributions for beneficiary’s comfort and happiness – is not measurable because distributions are measured by the beneficiary’s personal wishes.
Using the HEMS standard helps protect trust assets from creditors of the beneficiary, from the beneficiary’s spouse or partner, and from the beneficiary’s bad choices. The trust may allow, or require, the trustee to make distributions “for the benefit” of the beneficiary by paying such expenses directly.
The HEMS standard gives the beneficiary