What Is the HEMS Standard—and Why Does It Show Up in Every Trust?
f you’ve ever reviewed a trust—yours, your parents’, your spouse’s—you may have seen the phrase “health, education, maintenance, and support.” It’s often dropped in with little explanation, as though everyone knows what it means.
But this single phrase—known as the HEMS standard—does some of the heaviest lifting in Oregon estate plans.
Let’s talk about what it is, and more importantly, why it matters.
The $1 Million Problem It Solves
Imagine you and your spouse live in Oregon, and your combined estate is worth more than $1 million. That might include your house, retirement accounts, and a life insurance policy or two. Nothing extravagant. Just… normal.
Oregon’s estate tax kicks in at $1 million and unlike the federal estate tax offers no portability between spouses. It’s just use it or lose it. So, to avoid a tax hit when the second spouse dies, many couples use a credit shelter trust in their estate plan. This trust gets funded when the first spouse passes away and can shelter up to $1 million—preserving the Oregon estate tax exemption that would otherwise disappear.
But here’s the catch: if the surviving spouse has unrestricted access to that trust, Oregon may argue that those assets are still “theirs” and pull them back into the taxable estate. That defeats the entire point.
Enter the HEMS standard.
What HEMS Actually Means
HEMS stands for Health, Education, Maintenance, and Support. When a trust says a beneficiary can receive distributions for HEMS purposes, it sets a clear limit on how the money can be used. That limit matters.
It’s the difference between:
A trust that provides access and protection
A trust that triggers unnecessary estate taxes or loses asset protection altogether
HEMS is a legally recognized distribution standard. It’s broad enough to be useful, but narrow enough to satisfy the IRS and Oregon Department of Revenue when it comes to keeping assets outside a beneficiary’s taxable estate.
Here’s how each category typically plays out:
Health: Medical care, dental work, mental health treatment, insurance premiums
Education: College, trade school, professional training, tuition, books, fees, housing
Maintenance and Support: Living expenses like housing, food, transportation, clothing, utilities—scaled to the beneficiary’s accustomed lifestyle
This framework allows a trustee to provide for legitimate needs while maintaining a wall between the trust and the beneficiary’s other assets.
Why It’s Everywhere
HEMS language is the backbone of credit shelter trusts, but you’ll also see it in:
Irrevocable trusts for adult children: Helps limit access while shielding assets from creditors, divorces, or bad spending habits
Special needs trusts: Works alongside more complex rules for benefit preservation
ILITs (Irrevocable Life Insurance Trusts): Ensures policy proceeds aren’t taxed in the beneficiary’s estate
And in many trusts, the language gets even more specific. Trustees are often authorized (but not required) to make distributions “in their sole discretion” for HEMS purposes. That’s not accidental—it emphasizes that even qualifying requests don’t have to be granted. Trustees retain decision-making authority, which is key to preserving protections.
Not Just Legalese—A Real-Life Safeguard
Without HEMS, a trust that’s meant to preserve your estate could instead create new tax liability, expose funds to creditors, or make trustees vulnerable to claims of misuse.
With HEMS, you get:
Clear limits that preserve estate-tax savings
Asset protection from lawsuits, creditors, or divorce
A usable rulebook for trustees—especially family members—who want to do right by everyone involved
So if you’re looking at a trust and you see that HEMS clause, don’t breeze past it. That phrase could be the reason your plan actually works when it matters most.
Final Thought
Estate planning isn’t just about drafting documents. It’s about making sure every word in those documents actually serves your goals. In Oregon, that often means protecting the $1 million estate tax exemption—and the HEMS standard is how you do it.
If your trust includes HEMS language, that’s a good sign. If it doesn’t—or you’re not sure what any of it means—it’s worth getting a second look.
At Track Town Law, I offer flat-fee estate planning that includes custom trust design and Oregon-specific tax strategies. If you want to make sure your trust gives access without giving up protection, book a free consultation. Let’s get it right the first time.
