Fixed trusts (also known as non-discretionary trusts) are trusts where the trustor specifies how the assets are to be distributed exactly. Trustees in a fixed trust must manage the assets for financial success, but they do not have the ability to change what the beneficiaries receive. Fixed trusts typically give each beneficiary a set amount of money or a percent of the trust profit on a fixed schedule such as monthly or quarterly. This is in contrast to discretionary trusts which allow the trustee to change the amount the beneficiaries receive based on their need 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.
[Last updated in February of 2022 by the Wex Definitions Team]
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