Total Return

What Does Total Return Mean?

A total return trust is a method of managing trust assets where the distribution to beneficiaries is based on a fixed amount of money. Regardless of market conditions or the performance of the trust’s assets, the distribution amount remains consistent.

Insuranceopedia Explains Total Return

In traditional trust models, trustees often face challenges in balancing the interests of intermediary beneficiaries and remaining beneficiaries. This was because the income generated by the trust benefited the intermediary beneficiary, while the growth of the trust’s assets benefited the remaining beneficiaries. These conflicting interests sometimes led to intense disputes among the parties involved.

With a total return trust, where a fixed amount of money is allocated for all beneficiaries, each party knows exactly what they will receive. This transparency helps eliminate suspicions and disappointments regarding the management of trust assets.