Define: Fixed Trust

A fixed trust is a type of trust in which the beneficiaries have a fixed entitlement to the trust assets, meaning their share is predetermined and cannot be changed.

In a fixed trust, the beneficiaries have a fixed entitlement to the trust assets, while in a discretionary trust, the trustee has the discretion to decide how the trust assets are distributed among the beneficiaries.

One advantage of a fixed trust is that it provides certainty to the beneficiaries, as their entitlement to the trust assets is predetermined and cannot be changed by the trustee.

One disadvantage of a fixed trust is that it may not provide the flexibility needed to adapt to changing circumstances or to accommodate new beneficiaries.

A fixed trust is established by a settlor who transfers assets to a trustee, who then holds and manages the assets for the benefit of the beneficiaries according to the terms of the trust deed.

The terms of a fixed trust cannot be changed once it is established, as the beneficiaries have a fixed entitlement to the trust assets.

The tax implications of a fixed trust can vary depending on the jurisdiction and the specific circumstances of the trust. It is important to seek advice from a tax professional.

In general, a fixed trust cannot be revoked once it is established, as the beneficiaries have a fixed entitlement to the trust assets.

A fixed trust can be challenged in court under certain circumstances, such as if there is evidence of fraud or undue influence in the establishment of the trust.

Before setting up a fixed trust, it is important to consider the specific needs and circumstances of the beneficiaries, as well as the potential tax and legal implications of the trust. It is advisable to seek advice from a legal professional.