In the business and financial sphere, asset protection and compliance with obligations are fundamental pillars for the successful development of any project. This is where the guaranty trust comes into play, a legal tool that provides security and confidence to all parties involved in a transaction. In our law firm, we understand the importance of this figure and how it can benefit our clients in their commercial operations.
The guaranty trust is a legal mechanism whereby a party, known as the settlor, transfers the ownership of certain assets or rights to a trustee in order to guarantee the fulfillment of an obligation, whether its own or that of a third party. In the event of default, the trustee has the power to proceed with the auction of the trust property, delivering the proceeds of the auction to the trustee-creditor to settle the obligation.
The escrow trust facilitates the alignment of interests between the parties involved in a transaction, promoting trust and collaboration in the business.
It provides a framework of trust between business partners and towards third parties, while ensuring transparency in business operations.
The trustee, as an impartial third party, administers the trust assets in an objective and professional manner, looking after the interests of all parties involved.
The administration of the trust by a specialized trustee provides professional advice and efficiency in the operational control of the business.
The backing of a solid institutional infrastructure guarantees the security and stability of the trust, providing peace of mind to all parties.
Trust secrecy and legal certainty are fundamental pillars of the guaranty trust, providing protection and legal certainty to those involved.
The process of operation of this type of trust begins with the transfer of assets or rights by the settlor to the trustee, who manages the assets in accordance with the purpose of the contract. The trust assets are destined to a specific purpose in favor of the trustee, who will receive the benefit in case of compliance with the obligation.
The trust contract must contain a preamble specifying its nature, background, pertinent clauses and the identification of the parties. Any commercial property can be contributed to the trust, from real estate and personal property to property rights or collection rights.
Tangible Benefits of the Guarantee Trust
Improvement of up to 70% in execution and portfolio recovery times.
Reduction of legal risks and increase of the debtor’s compliance rate.
Protection of assets against seizures or contingencies.
Improvement in the rating of the loan portfolio and maintenance of the creditor’s profits.
In our law firm, we offer a specialized service in the implementation and management of guaranty trusts. From needs mapping to trust implementation, we provide legal and financial certainty to all parties involved in the project.
