Frequently Asked Questions

From distribution standards to distribution processing, here are some frequently asked questions (FAQs) that our beneficiaries commonly have:

FAQs

Why are beneficiaries required to provide annual financial information?

We use this financial information to assist with determining a beneficiary’s eligibility for distributions, particularly those that are discretionary in nature.

We also use this financial information to fulfill our fiduciary duty to act in the best interest of the beneficiary and manage trust assets in a prudent manner. To do this fairly and responsibly, we use the information to evaluate a beneficiary’s financial needs and to avoid making excessive distributions that could harm the long-term health of the trust.

Finally, in some cases, the language of the trust explicitly requires us to consider a beneficiary’s financial resources prior to making distributions.

What does the Health, Education, Maintenance, and Support (HEMS) distribution standard mean in a trust?

Many trusts use the “HEMS” standard to guide how and when we can make distributions. Health, Education, Maintenance, and Support are categories of expenses that we may consider when evaluating distribution requests.

Common examples of what may qualify under each category are:

Health – Doctor and dental bills; health insurance premiums; prescription medications; mental health care; and in-home or long-term care.

Education – Tuition and fees for school, college, or vocational programs; textbooks, supplies, and equipment; room and board during schooling; and study abroad or continuing education.

Maintenance – Rent or mortgage payments; utilities and household bills; groceries and basic living expenses; clothing and transportation; travel consistent with prior lifestyle.

Support – Childcare or dependent care costs; job training or career support; reasonable personal expenses necessary for daily living not covered by the beneficiary’s sources of income.

NOTE: Just because a request falls within the HEMS standard does not mean that it will be approved. We review each request personally and carefully to determine if the request (1) falls within the standard; (2) is reasonable based upon the beneficiary’s circumstances; and (3) aligns with the terms of the trust.

The HEMS standard is used in trusts to ensure that the essential needs of a beneficiary are supported, to protect the trust assets and tax status, and to provide flexibility without allowing unrestricted access.

How long does it take to process a distribution request, and how do I receive funds?

Distribution requests are generally processed within three to five business days. If the request requires the sale of investment positions, it may take a little longer. You can provide your bank routing and account information with your annual beneficiary packet. We use that information to send distribution requests directly to your bank account via ACH.

Please note that we will not accept handwritten bank routing and account information. It must be provided in the form of a voided check or a letter from your bank. To avoid delays in ACH processing, there are no exceptions to this requirement.

Does the trust require a tax return to be filed each year?

Trusts that have taxable income, or gross income of more than $600, or have a nonresident alien as a beneficiary, must file a tax return each year. We work diligently with our accountants early in the tax year so that trust tax returns and K-1s can be sent to you as quickly as possible, so your personal tax returns can be filed in a timely manner. You will receive your trust tax return and K-1 via your ShareFile folder, secure email, and/or regular mail, depending on your preference.

Can I receive duplicate statements for the investment accounts in my trust?

Yes. Please contact one of our Trust Officers to make this request.

What kind of information is kept in my ShareFile folder?

Your ShareFile folder contains a copy of your trust, beneficiary packet information, trust tax returns (if applicable), and distribution request forms. Trust accountings and asset summaries can also be uploaded here as well, upon request.