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Fixed Trust

Definition - What does Fixed Trust mean?

A fixed trust is a trust in which the beneficiaries and their respective entitlements are clearly defined in the trust deed. This ensures that the trustee has little or no discretion whatsoever in determining who, among the beneficiaries, will benefit and the extent of those benefits.

Justipedia explains Fixed Trust

There are two general classifications of trusts: fixed trusts and discretionary trusts. A fixed trust limits the discretion of a trustee. A discretionary trust relies on the decisions of the trustee. In a discretionary trust, a trustee can determine which beneficiaries will receive benefits along with the nature and extent of the benefit that a beneficiary receives. Some common examples of fixed trusts include life interest (which pays income to an individual for their lifetime), trusts established for a minor, and remainder (which pays capital to an individual when the beneficiary dies).

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