How do I protect my Patrimony?
This is a question that we constantly ask ourselves, especially when we have become independent from our parents, when we become parents, when we make an investment or when we have worked throughout our lives to create a heritage and have not yet made the decision to organize your transfer, in our absence.
When we think about protecting our patrimony, they usually recommend us to structure a Private Interest Foundation (FIP), an entity that allows us, among other things, to build up a patrimony destined exclusively for the objectives or purposes that are expressed in its foundation charter.
As with a Private Interest Foundation, the Trust allows us to constitute a separate patrimony, however, what mainly differentiates one structure from another is the entity that executes the will of the person who delivers their assets to constitute them in a separate patrimony of their own.
Despite the fact that the Trust seems to be a more novel structure, the law that regulates it was established in 1984, while the law that regulates the FIP was established in 1995.
How do I protect my Will?
In the case of Private Interest Foundations, their Founder or Founders, who contribute the patrimony, designate a Foundational Council that is usually made up of three members, a President, a Secretary and a Treasurer, to administer the patrimony in accordance with the will that has been recorded in the Foundation Charter and in the Foundation Regulations. In addition to said entity, the Founder or Founders may appoint a Protector to oversee compliance with what is established in the documents that regulate the FIP. In many cases, the members who occupy the positions in the Foundational Council and the position of Protector are members of the family of the Founder or Founders or people close to him, to whom he entrusts the execution of certain powers and functions, which he hopes will be fulfilled. during his lifetime and at his death, according to his will. Such members are also usually designated Beneficiaries of the Founder or Founders.
In the case of the Trust, its Settlor or Settlors, contribute the assets to the Trust and in that same act they designate the Trust Company to administer said assets in accordance with their will, which is recorded in the trust agreement. In this case, the Settlor or Settlors may also appoint a Protector. The one who executes the will of the Settlor or Settlors is the Trust Company who, as an entity regulated by the Superintendency of Banks, must comply with the will of the Settlor or Settlors, constituting said Superintendency as the supervisory body of the Trust Company execution. In addition, in the case of the Trust, it is also audited whether or not there is a link between the parties involved in the agreement in order to avoid conflicts of interest. This structure mainly seeks to maintain impartiality between the parties involved.
What assets can I transfer to the Patrimony?
Assets of any nature, present or future, may be transferred to the Trust's patrimony, including without limitation, personal property, real estate, securities, and cash. Once the assets are transferred to the patrimony, they are constituted as a separate patrimony from the assets of the person delivering them and the Trust Company personal assets and cannot be seized, except for obligations acquired by the Trust.
The transfer of assets to the Trust's patrimony is exempt from all taxes, contributions, fees or encumbrances, as well as the return of said assets to the person or persons who originally contributed them.
What is the right structure for me?
The above depends on different situations. As we have mentioned, the main difference between one structure and another is the entity that executes the will of the person who delivers the patrimony.
In addition to the above, the Trust Company provides added value in the administration and execution of the patrimony since it has staff and members who accompany the Settlor with professional advice in the decisions that must be made regarding their assets.