By Marco Antonio Tena López
Trust arrangements are essentially contracts where assets are transferred under the stewardship of a trustee to achieve specific goals, with the trustee bearing the responsibility to fulfill these objectives.
This setup involves three parties: the settlor, who entrusts their assets; the trustee, who administers these assets; and the primary beneficiary, who receives the benefits.
Focusing on management trust, this model involves assigning certain assets and rights to a trustee—only entities specifically authorized—tasked with their preservation, management, and eventual transfer on behalf of a third party. This kind of trust is designed for precision and safeguarding in asset management.
When entering a management trust agreement, the advantages are clear, which include:
Estate Planning: Aims to seamlessly transfer both movable and immovable assets, resources, and rights, ensuring they reach intended successors. Trusts operate automatically when this transfer is carried out.
Share Control: Administration trusts manage the transmission of shares or company stakes, ensuring orderly ownership succession.
Social Provision: This pertains to managing pension funds, savings, and bonuses for seniority, securing future financial needs.
Account Administration: Involves direct management of an estate, including the rights to collect rents or manage leased properties through a payment cascade that automatically assigns funds as funds go into the accounts.
Management trusts offer significant benefits, such as asset protection against legal disputes, ensuring a higher level of confidentiality than typically afforded, and potentially reducing the tax liabilities associated with asset transfers.
This trust model provides a structured approach to asset management, emphasizing security, privacy, and fiscal efficiency.
