A fixed trust in New Zealand law is a trust where the beneficiaries and how the trust property is distributed are set when the trust is created. The trustee is required to follow the distribution arrangement set out in the trust deed. 

Key features

• Fixed entitlements: the beneficiaries have specific entitlements to the trust's income and capital. 

• No discretion for the trustee: the trustee cannot change the arrangement set out in the trust deed. 

• Beneficiaries receive a fixed share: when the trust ends, the beneficiaries receive a fixed share of the trust's assets. 

Disadvantage of fixed trusts

A fixed trust can have the potential disadvantage of being inflexible to the changing needs of the beneficiaries over time. In a fixed trust, the beneficiaries and their shares are predetermined, and the trustees do not have the power to change them. Beneficiaries of a fixed trust have specific entitlements to the trust funds. For this reason, fixed trusts are generally less suited to meeting the needs of disabled people.