Health, Education, Maintenance and Support: Examples and Limits

Examples of health, education, maintenance, and support expenses a trustee can pay under a HEMS standard include doctor visits, prescriptions, health insurance premiums, tuition from grade school through graduate school, textbooks, rent or mortgage payments, groceries, utilities, car payments, and reasonable vacation costs. The four categories cover a lot of ground, but they share a common ceiling: distributions are meant to preserve the beneficiary’s accustomed standard of living, not raise it. Anything that pushes into general “comfort,” “welfare,” or “happiness” sits outside HEMS, even if it would make the beneficiary better off.¹

Here is what actually falls inside each category, and where the edges are.

Health Expenses

The health category covers spending aimed at preserving the beneficiary’s physical and mental well-being. Treasury regulations specifically include “medical, dental, hospital and nursing expenses and expenses of invalidism” within the ascertainable standard.¹

Common qualifying items:

Physician visits, specialist care, and surgical procedures
Prescription medications
Dental work, including preventive care and major procedures
Vision care, glasses, and contact lenses
Mental health treatment, including counseling and psychiatric services
Specialized medical equipment
Home accessibility modifications tied to a medical need
In-home nursing and long-term care in a facility
Premiums for health, dental, and long-term care insurance

Gray-Area Health Expenses

Some treatments don’t fit the traditional medical-necessity mold. Acupuncture, homeopathic remedies, elective cosmetic procedures, laser eye surgery, and concierge medicine sit in a gray zone. There is no bright-line rule excluding them. Trustees typically look at whether a licensed physician recommended or approved the treatment, which provides significant cover for the decision. A prescription isn’t strictly required, but a trustee approving a $30,000 cosmetic procedure will want stronger justification than one approving a $200 chiropractic visit.

Education Expenses

Education under HEMS reaches formal academic and vocational training at every stage. The Treasury regulations specifically recognize “education, including college and professional education” as part of the ascertainable standard.¹

Typical qualifying items:

Tuition and enrollment fees from elementary school through graduate programs
Vocational certifications and professional training that improve employment prospects
Textbooks, lab fees, and required supplies
Reasonable room and board for a student living away from home
Tutoring services
Transportation to and from an educational institution

The consistent test is whether an expense has a genuine connection to the beneficiary’s educational advancement rather than general lifestyle enrichment. A laptop required by a degree program fits. A high-end laptop the beneficiary wants for personal use doesn’t, even if they happen to be enrolled somewhere.

Maintenance and Support Expenses

Maintenance and support is the broadest of the four categories and produces the most disagreement. Treasury regulations treat “support” and “maintenance” as synonyms and confirm the meaning “is not limited to the bare necessities of life.”¹ The benchmark is what the beneficiary was accustomed to when the trust was established, or what the trust creator envisioned.

Housing is where most maintenance dollars go:

Rent
Mortgage payments on a primary residence
Property taxes
Homeowner’s association dues
Utilities
Ordinary household maintenance and repairs

Day-to-day living expenses also fit here:

Groceries
Clothing appropriate to the beneficiary’s social and professional circumstances
Basic household goods

Transportation costs necessary for daily life qualify:

Car payments and auto insurance
Fuel and routine vehicle maintenance
Public transit passes and train fares

Reasonable vacation and recreation expenses can be authorized when they line up with the beneficiary’s customary lifestyle and don’t drain the trust unreasonably. A larger expense, like helping a beneficiary buy a home or start a business, can qualify if it’s reasonable given the family’s circumstances and the size of the trust.

The Lifestyle Benchmark

Maintenance and support is meant to preserve a standard of living, not elevate it. A trustee can distribute funds for a reliable replacement car when the beneficiary’s vehicle breaks down. A trustee probably can’t distribute funds for a luxury vehicle that far exceeds what the beneficiary has historically driven. Each request gets measured against what the trust creator would have considered appropriate for this beneficiary.

What Doesn’t Qualify

The regulations exclude powers exercisable for the beneficiary’s general “comfort,” “welfare,” or “happiness.”¹ In practice, that pushes several categories of spending outside HEMS:

Luxury upgrades, such as a high-end car for a beneficiary who has always driven modestly, or a vacation home when the beneficiary’s lifestyle never included one
Gifts to third parties, including friends, romantic partners, or charities, since those aren’t distributions for the beneficiary’s own health, education, maintenance, or support
Speculative investments or gambling activity
Lifestyle inflation that pushes the beneficiary well past the standard of living the trust creator contemplated

The line between a permissible maintenance expense and an impermissible lifestyle upgrade is fact-specific and often subjective. If a request sits close to the line, the trustee should document their reasoning either way.

Does the Beneficiary’s Own Money Matter?

Whether a trustee has to look at the beneficiary’s personal wealth before approving one of these expenses depends on the trust document. Many trusts are silent, which creates ambiguity. Under general trust law principles, trustees are guided to consider what other income and assets the beneficiary has, so a beneficiary with substantial personal wealth may face more scrutiny when asking the trust to pay for basic living expenses.

The Treasury regulations note that for tax classification purposes, “it is immaterial whether the beneficiary is required to exhaust his other income before the power can be exercised.”¹ That language addresses whether the power qualifies as an ascertainable standard, not whether the trustee should weigh other resources as a practical matter. Trust documents that address this issue directly avoid most of the fights it otherwise causes.

How a Trustee Sizes Up a Request

A trustee reviewing a HEMS request usually wants a written submission identifying the amount, the purpose, and the HEMS category it falls under. Invoices, medical bills, tuition statements, or contractor estimates make the request much easier to approve. Corporate trustees often route requests through a formal distribution committee.

The analysis goes past “does this expense fit a category?” A trustee also considers the overall size of the trust, whether there are other beneficiaries whose interests need balancing, the trust’s history of prior distributions, and the specific language of the trust instrument. Some trusts are drafted to be a beneficiary’s primary financial resource. Others function as a supplement to income and assets the beneficiary already has. The same request can be reasonable under one document and excessive under another.

Records matter for every decision. For approvals, that means the written request, the supporting documentation, and a brief note on how the expense fits within HEMS. For denials, the trustee should document why. Those records are what protects the trustee if a beneficiary, co-beneficiary, or remainder beneficiary later challenges the decision.

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eCFR. 26 CFR 20.2041-1 – Powers of Appointment; In General