Total Return Unitrust (TRU)

Definition - What does Total Return Unitrust (TRU) mean?

Total return unitrust is a way of handling the assets of a trust in relation to the distribution of its proceeds between the intermediary beneficiary and the remainder beneficiaries. The trustee of this trust allocation gets a fixed percentage of the total assets of the trust and distribute it among the beneficiaries.

Insuranceopedia explains Total Return Unitrust (TRU)

Before, trust accounts could be contentious among the beneficiaries. The intermediary beneficiary wanted to maximize income from the assets of the trust because that was where they monetized their shares of the trust. The remaining beneficiaries wanted to make the assets grow because that was where their share of the trust is, the growth of the trust assets.

With the total return unitrust, this conflict can now be mitigated or even solved by assigning a fixed percentage for all beneficiaries. The amount they get is based on fair market value of the assets of the trust. If the market is favorable to them, they get more. If not, they get less.

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