What is a trust?

A trust is a private contract in which a person called a “settlor”, transfers part of their assets as trust to a “trustee”, to be managed according to the established conditions, for the benefit of one or more persons called beneficiaries .

Assets of any nature can be transferred to the trust, personal property that can be automobiles, shares, money or real estate that can be apartments or houses, whether transferred in the present or in the future.

It is very important to note that the assets that are transferred to the trust for administration are completely separate from the assets of the trust entity, which is duly regulated by the Super Intendencia de Bancos de Panamá to ensure the healthy performance of the regulated entity.

What is a trust used for?

A trust is used for various purposes, among which we can mention:

• Estate planning
• The organization of assets
• The administration of assets in fiduciary assignments
• The protection of the patrimony and the healthy succession of the same

A trust is a vehicle that provides confidentiality, simplicity, and flexibility to families. It can also be used for commercial activities, which makes it a valuable tool to consider in estate planning.

In the same way, special conditions or rules that families wish in relation to their assets can be established for trusts, such as the future education of their children, who would be their guardian in the absence of the parents, such as the distribution of assets. Special care for older adults can also be considered. All of these considerations can be set out in the trust agreement.

Another feature that trusts provide is that assets in trust entrustments are unseizable and unattachable.

 

Jorge Ávila
Head of Fiduciary & Compliance – Partner

For more information:
trust@kbfamilyoffice.com

 

March, 2021