Also known as a trust, it is a tool by which financial assets are managed to benefit a natural or legal person. Initially, these assets are provided by the settlor, which assigns its assets or money to a natural or legal person so that it can manage or administer said rights.
This person will receive a payment from the fund which is delivered as an agreement between the parties and as payment for the management this in the event that the person is not able to manage their own assets, either due to illness, limited time availability, etc. There are different types of trusts and uses:
The basic and best known are; the funds of living trusts and wills, the difference between the two are the terms of when and how they will be validated. The living trust is established while the owner is in his right mind, therefore it can be revocable. Testamentary trust, this is established after the death of the owner and is not revocable because of what is written there, so it will remain. The uses that are given to these can be:
Avoid taxes: To avoid that these assets continue to generate taxes once the owner dies, these assets are managed by a trust entity since the property has no heirs.
Guarantee the use of the assets for a benefit: the entity will be in charge of managing according to the instructions of the settlor who will leave a beneficiary with their specific uses thereof.
Keep assets safe in case of minors involved: said assets are kept in a fund organized by the entity until the living beneficiaries reach their majority, this in case it was the will of the owner of the assets.
