GAMASE • Gala Management Service

The Trust

What is a trust?
It is the act or contract by which a person or legal entity (Grantor) transfers property assets of a tangible or intangible nature to another (Trustee), so that said Trustee can manage or dispose of them in favor of one or more beneficiaries, who can be the same person or entity as the Grantor.

Parties taking part in a Trust
The following parties are present in a Trust:

Grantor
Natural or legal entity that is owner of the assets, whose property is transferred to the Trustee.

Trustee
Natural or legal entity to whom the assets are transferred and who receives them in trust, assuming their custody and management, with the order to designate them, only and exclusively, to the ends indicated in the contract by the Grantor. Despite the transfer of property, these assets are not part of the Trustee’s capital.

Beneficiary
Person (or persons) indicated by the Grantor to receive the benefits from the assets in trust or the property title over these assets, consistent with Grantor’s stipulations in the Trust contract.

Uses of a Trust

The Trust is an ideal mechanism by which to ensure such goals as:

▪	Fulfillment of last wills, such as the distribution of legacies or specific assets to relatives or third parties, thereby avoiding the probate requirement
▪	Management of assets left in fiduciary inheritance, on account and in the benefit of the designated heirs, as an alternative to distribution of assets among heirs.
▪	Securing funds for the education of students and child support for legal minors, as well as for scientific research and charitable purposes.
▪	Coverage for the medical, food, clothing and housing expenses of disabled or elderly family members.
▪	Real estate management, with the Trustee being in charge of collection management, maintenance, payment of taxes, etc
▪	Fulfillment of financial and other obligations, in some cases used as a substitute instrument for a mortgage or pledge due to its functional and operational advantages
▪	Management of funds, assets or rights for execution of works, projects or services, which in general are pursuant to dispositions in the contract.
▪	Wealth enhancement through investment schemes in securities or other commercial instruments, whose yield is capitalized or given to Grantors or to beneficiaries designated by them.
▪	Mere custody of assets, in substitution of escrow deposits

This is but a partial list of situations or goals capable of being managed by a Trust, which is a very versatile legal instrument for any commercial or personal transactions in which the mediation of a suitable and reliable administrator is desired.