Faq's

Frequently Asked Questions

What is a trust?

It is the contract by means of which, in an act of trust, a natural or juridical person called a Constituent or a Trustor delivers or transfers one or more specific assets to a Fiduciary entity, with the goal of complying with a certain objective for the benefit of the constituent or of a third party expressly specified by the constituent.

The fiduciary entity binds itself to make its best effort to fulfill the objective specified by its client, administering the assets received for that purpose. It is a contract of means and not of results.

Who is involved in a Trust?

There are 3 parts involved in every trust:

The Beneficiaries are the people with the right to receive the benefits of the trust. These do not have to be part of the trust contract, if the trustor so requests, and they can even be designated in the future, as long as sufficient circumstances are expressed in the contract for their identification.
Likewise, within the trust structure, other figures can be named as advisers, protectors, consultants, or committees, whose functions can be established within the same contract.

  1. The Trustor, who is the natural or legal person that transfers assets to the Trust
  2. In most cases it is the client.
  3. The Trustee is the legal entity that receives the assets to administer them as established in the trust agreement.

The Beneficiaries are the people with the right to receive the benefits of the trust. These do not have to be part of the trust contract, if the trustor so requests, and they can even be designated in the future, as long as sufficient circumstances are expressed in the contract for their identification.

Likewise, within the trust structure, other figures can be named as advisers, protectors, consultants, or committees, whose functions can be established within the same contract.

Is the anonymity of the owner of a trust maintained?

Yes, the information of our clients is protected by law and by the rules of the Professional Secret.

How long is the trust?

The trust does not expire; however, the grounds for termination by law are the following:

  1. That the end for which it was constituted be fulfilled;
  2. That its fulfillment is impossible;
  3. The resignation or death of the beneficiary, without having a substitute;
  4. The total absence of assets in the trust;
  5. That the sole Trustee is, in turn, the sole Beneficiary; and,
  6. Any other cause that is established in the trust agreement.

What is the trust property?

The trust property is constituted by the assets transferred to the trust and by the fruits that these generate. The trust property is different from the trustor’s estate, the trustee, the trustee, any other trust property administered by the trustee and, if applicable, the recipient of the remainder, so that it is protected and cannot be seized.

What can the trustee do with the goods he receives?

The trustee can only perform the acts to which he is expressly authorized by means of the contract. In other words, the fiduciary has no freedom to vary the terms of the contract or to act in any way without express written authorization from the trustor.

In what cases is the trust is recommended?

The trust is flexible enough to be used in many cases, such as:

Assign the administration of a good: The trustor transmits to the trustee the administration of their assets, trusting them in the security of a serious institution specialized in the financial system. Also, as the assets of the trust leave the personal estate of the trustor entirely, they are guaranteed in the eventualities or contingencies that may affect their personal assets.

Guarantees of payment: they are constituted by an individual or legal entity that is going to become debtor of a credit obligation. The essential purpose of this type of trusts is to guarantee the creditors of the trustor that in the event of default of the latter in the care of their debts, the trustee will proceed to execute the assets, with his product to pay, in proportion, the debts of the Settlor.

Investment funds: consists of the administration of liquid resources, seeking to allocate them to productive activities that derive attractive returns.

Testamentary trusts: they are given when a trustor being in life constitutes a trust, contributing certain assets so that upon his death the fiduciary delivers them to the persons he has designated as trustees.

What advantages does the trust have as a guarantee mechanism?

The first advantage you have is the cost. Under the traditional scheme, granting a mortgage guarantee requires the creation of a mortgage and subsequently the cancellation thereof, which generates significant legal expenses. The guarantee trust, by law, does not pay transfer taxes or registration fees, so the only cost is the constitution of the trust that is substantially less than a mortgage as well as the annual fees of the trustee. The second advantage that it has is flexibility, since it can be varied by common agreement between the parties without it representing any cost.

For more information, we invite you to contact us at info@centralfiduciaria.com and we will gladly answer all your questions.