Often, trust beneficiaries are confused about how and when they receive their funds. They may not know what they are entitled to or how to ask the trustee for money. The terms “discretion” and “HEMS” are used frequently, but misunderstood by many.
Discretion means the trustee has the power to decide if, when, and how much money to give. The decision is not automatic. Instead, the trustee uses good judgment to make choices that are best for the beneficiary. Many trusts include a particular type of discretion for necessities, specifically: health, education, support, and maintenance (also called ‘HEMS’). In addition to HEMS, depending upon the language in the trust itself, the trustee may be able to provide additional funds outside of what is necessary using specifically defined discretion in the trust.
I created this simple guide to help beneficiaries communicate clearly with their trustees about trust distributions. Included are a list of questions to ask the trustee, your rights as a beneficiary and how to track trust funds received.
This guide will define the following terms and help answer your questions!
- Trust Distributions
- Discretionary Distributions
- Trustee Discretion
- Understanding Trustee Discretion
- Liberal vs. Conservative Discretion
- How Trust Distributions Work
- Florida Trust Law
- Estate Planning for Beneficiaries
- Guide to Trust Fund Management
- Trust Administration Best Practices
- Beneficiary Rights
- Probate and Trusts Explained
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