Fixed trusts are trusts where the proportion of distribution of income to the beneficiaries is fixed. A common fixed trust is a unit trust (but note not all unit trusts are fixed trusts).
Advantages of a fixed trust may include:
- As the beneficiaries of a fixed trust have fixed interests in the income and or capital of the trust property, they can enforce the administration and the distribution of the property of the trust.
Disadvantages of a fixed trust may include:
- The trustee does not have the discretion on how to distribute income (such as in a discretionary trust) and in this respect is less flexible than a discretionary trust.
Our commercial lawyers will assist you in deciding whether a fixed trust is the right structure for you. If you are thinking of setting up a fixed trust please get in touch with your nearest Prime Lawyers office.