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HEMS Trustee Duties | The Need to Know Beneficiary Health

HEMS Trustee Duties.jpgAll of us have parts of our lives that are on "cruise control" - actions done with little reflection or consideration. We can make efforts to go beyond this.

Some Zen practitioners suggest a habit of daily reflection. The benefits -

  • It helps to learn from your mistakes;
  • It can give great ideas;
  • It helps you to help others;
  • It makes you happier; and
  • It gives you great perspective.

The Ignatian Daily Examen, an ancient practice, is designed to help us see God's hand at work in our daily lives. St. Ignatius version is a five-step process:

  1. Become aware of God's presence;
  2. Review the day with gratitude;
  3. Pay attention to your emotions;
  4. Choose one feature of the day and pray from it; and
  5. Look forward to tomorrow.

Yom Kippur will be here in a few weeks. Close friends as well as written reflections explain that this is a time we need to refrain from actions which may cause hurt; to not add to injustice or misunderstanding; to scrutinize our own hearts; and to gain a greater sense of commitment and connection to those around us.

So, with all this in mind I've been reflecting on how easy it is to take for granted and assume that we really understand duties or directions in trusts. In this case I think that trustees often give little thought or consideration to the health of a beneficiary in a HEMS trust.

The HEMS standard is a trust provision used to convey a settlor's intent with regard to distributions to beneficiaries. HEMS stands for health, education, maintenance and support.

Trustees are often directed to distribute trust principal and/or income in such amounts as may be needed for the health, education, maintenance and support of a beneficiary or beneficiaries. We've been litigating this issue.

It is my belief that a significant number of trustees fail to assess and account for the health of a beneficiary in exercising this standard of distribution. I think that these trustees are, in a sense, on cruise control. They are performing their tasks with little reflection or effort. I don't say this to indict them. I think that it's easy for any of us to make assumptions or to ignore the obvious. There is a better way - they can do better.

In thinking about the health element of the HEMS standard what should the trustee know?

So with credit to another legal writer, Julius Giarmarco, the "standard of 'health' is generally thought to include the following:

  • Emergency medical treatment;
  • Psychiatric treatment;
  • Psychological treatment;
  • Routine health examinations;
  • Dental;
  • Eye care;
  • Cosmetic surgery;
  • Lasik surgery;
  • Health, Dental, or Vision Insurance;
  • Unconventional medical treatment;
  • Home health care;
  • Gym memberships;
  • Spa memberships;
  • Golf Club memberships; and
  • Extended vacations to relieve tension and stress.

In any event a trustee must exercise its powers "in good faith." I think that a trustee who fails to consider the elements that go into a beneficiary's health has an uphill battle to show good faith. It is often our role as advocates to bring the trustee's attention to this failure.

They can learn from their mistakes. They can choose a better way. They can correct an injustice. And, if possible, these corrections may occur without litigation.

When they can't, Hackard Law litigates trust, estate, probate and elder financial abuse cases in California's largest urban areas, including Los Angeles, Orange, Santa Clara, San Mateo, Alameda, Contra Costa and Sacramento Counties.

If you have a HEMS standard issue and you would like to speak with us about it, call us at Hackard Law, (916) 313-3030. We'll be happy to hear from you.

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