Legal Definitions - fixed trust

A fixed trust is a type of trust where the trustor specifies exactly how the assets are to be distributed. The trustee must manage the assets for financial success, but they cannot change what the beneficiaries receive. Fixed trusts usually give each beneficiary a set amount of money or a percentage of the trust profit on a fixed schedule, such as monthly or quarterly.

• John sets up a fixed trust for his children, specifying that each child will receive $500 per month from the trust until they turn 25 years old.
• Sarah creates a fixed trust for her grandchildren, stating that each grandchild will receive 10% of the trust's profits every quarter.

In both examples, the trustor has specified exactly how the assets are to be distributed, and the trustee must follow these instructions. The beneficiaries receive a fixed amount of money on a regular schedule, and the trustee cannot change this amount.

Fixed trusts are different from discretionary trusts, where the trustee has the ability to change the amount the beneficiaries receive based on their needs or performance of the trust. Some trusts may combine aspects of both fixed and discretionary trusts by setting fixed payout schedules for beneficiaries, but the trustees may have the ability to change benefits in the case of an emergency or changing circumstances.