Unitrust provision
Certified Financial Planner glossary · Certified Financial Planner
Definition
A trust term defining distributions as a fixed percentage of assets revalued annually.
Unitrust provision in plain English
A trust used to pay out only interest and dividends, starving the income beneficiary whenever the portfolio favored growth stocks. A unitrust provision defines distributions as a fixed percentage of assets revalued annually, so the payout tracks portfolio value rather than accounting income labels. That structure pairs naturally with total-return investing. Remember the payment is a stated percent of annually revalued assets, not whatever coupon income happened to show up.
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