You may be right.  Medical expenses aren't really an expense of the trust. To qualify for deductions,  the expense has to be incurred because of the existence of the trust.  If the expense was necessary outside of the trust, the trust couldn't take a deduction.  In this case, it's an expense outside of the trust, so no tax deduction.  but i like the idea of passing it through as a Schedule A deduction (subject to 7.5% threshold).