How Are Capital Interest Certificates & Beneficial Interest Certificates Paid Out When Trust Ends / Vests
Capital Interest Certificates (CIC) are paid to owners when trust vests BEFORE Beneficial Interest Certificates (BIC) are exchanged. An account will probably be required to determine amount of assets, divided between CIC and BIC holders. CIC holders are paid out based on the value of the assets they exchanged into the trust and how much it grew (or lost).
EXAMPLE: If $5K in assets exchanged into the trust res and it grew to $6K - all that money and profits go to the CIC holders. The BICs holders will have the initial funds the trust began with (e.g. $10K) and how much it gained or lost (e.g. to $25K). The outcome is determined by subtracting the CIC holders value from the trust's total assets - whatever is left over is for the beneficiaries.