Like all over the world, trusts in Mexico are widely used financial tools. Although the origin of these types of contracts goes back to Ancient Rome, we know that many people don’t know what they are for. Moreover, in the case of foreign investors in Mexico, to whom we offer all the necessary advice to manage their trusts.
Over time, in the world and also in our country, different types of trusts have been developed to cover different needs. In this article, everything you need to know about trusts in Mexico.
What is a trust?
According to the General Law of Credit Securities and Operations, which regulates and establishes the standards for financial activity in Mexico, this is its definition:
“A trust is a contract by which assets, that can be real and personal property, money or rights, can be transferred to a third party, who can be a natural or legal person who will have to manage those resources according to the rules stipulated in the agreement signed by the parties involved “
In our country, these contracts are safe and reliable tools, since they have strong legal support. In addition, they are an effective way to manage the part of your wealth destined for a specific purpose.
Who participates in a trust?
When talking about trusts in Mexico, it is necessary to distinguish the three main parts that comprise them:
- Settlor: It is the natural or legal person (with assets and personality of its own) capable of delegating certain assets or rights to a third party. In this figure, the General Law of Credit Securities and Operations emphasizes the ability to acquire rights and obligations.
- Fiduciary institutions: These are institutions that are authorized to exercise the mandate of the settlor. That is, those in charge of managing their assets to transmit them to the trustee as agreed in the contract.
- Trustee: It is the final beneficiary of the trust, it can be a natural or legal person with assets and personality of their own.
The law makes it clear that the assets that make up the trust must be used exclusively for the purpose defined by the settlor. Therefore, the fiduciary institution is obliged to record the assets and keep them separate from its own assets.
Types of trusts
Among all the categories that exist, these are the most used types of trusts in Mexico:
Testamentary Trust
“What will happen to my assets once I am gone?” That’s a recurring theme among investors who contact us. The testamentary trust serves -justly- to avoid this concern and the difficult procedures for our heirs.
This is a type of contract that allows you to set precise instructions on what to do with your assets once you are gone. This is a great way to ensure that your will is carried out and ensure that the estate goes to the beneficiaries you choose, since this trust cannot be modified by someone other than the settlor.
Trust as a payment method
If you are a client of the Patrimonial, Private Banking or UHN and you need a Guaranteed Patrimonial Loan (PPG), you can request this type of trust. It is basically a contract that allows you to grant part of your assets as a guarantee to access a loan.
Estate Planning Trust
It’s another contract aimed at clients of Private Banking and UHN, who will be able to deliver their resources to be managed according to their investment strategy, in order to benefit an established person. With this type of trust you have the option of accessing the Guaranteed Patrimonial Loan (PPG) credit, which will allow you to generate liquidity with the guarantee offered by your assets.
Structured Trust
They receive this name because they adapt to your needs, no matter how unique they may be. These trusts in Mexico can be acquired by all types of people, and make it possible to contribute liquid resources, shares or real estate to benefit the natural or legal person that the settlor decides.
In this type of contract, the rules are set by the settlor, so you can rest assured that your assets will be kept safe thanks to the fact that the assets or rights cannot be seized. In addition, there is total confidentiality of the parties in this trust.
We hope this article has been useful to inform you about the types of trusts in Mexico. If you need to manage a trust, you can start your procedures with Extranjería México.
If you have any questions, do not hesitate to contact us through our WhatsApp. We are here to help you!
Source
https://www.bbva.mx/educacion-financiera/blog/tipos-de-fideicomiso.html
