2023-09-08 05:33:39
Thursday, September 7, 2023
Sofia Escobar Posada
There are several mechanisms that tend to optimize heritage. These mechanisms entail a strategic process that seeks the efficient and effective management of assets and goods over time, with the aim of preserving, protecting and making the most of the patrimony of a person or family.
This comprehensive approach implies consideration of legal, fiscal and financial aspects, as well as the specific goals and needs of the individual or family group. Thus, through estate planning, strategies can be established such as the creation of trusts, the preparation of wills, the diversification of investments and the minimization of taxes, all in order to ensure financial security and the optimization of assets.
What is the civil trust as a planning mechanism?
The civil trust is an estate planning mechanism that involves the creation of a separate and autonomous estate, which is used to manage and protect assets, goods or property for the benefit of one or more people, called “beneficiaries”, in accordance with the instructions and conditions established by the settlor.
Thus, in the fiduciary property there are 3 parties, namely: the settlor, who delivers the assets to be administered by a third party; the trustee, who is in charge of managing the assets and goods placed in trust; and, the beneficiary, who, as a result of the fulfillment of a condition, becomes the owner of the assets placed in trust.
What are some of the advantages of the civil trust?
Asset Separation: Facilitates the legal segregation of trust assets from the settlor’s personal assets, adding an additional layer of safeguards to personal wealth. Estate Planning: Simplifies the efficient transfer of assets to predetermined beneficiaries without the need to resort to probate processes, which can prevent family disagreements and conflicts.Versatility and flexibility: The civil trust grants the settlor the ability to establish particular conditions for the distribution of assets, such as terms, educational purposes or medical needs, granting a greater degree of control on the management of the assets after their transfer. Tax advantages: In certain circumstances, the trust can provide tax benefits by reducing the tax burden on the strategic transfer of assets.
What is the role of the trustee?
The trustee plays a fundamental role as administrator and custodian of the assets, looking after the interests of the beneficiaries and guaranteeing compliance with the guidelines and stipulations established by the settlor. His responsibilities include:
Compliance with instructions: The trustee is obliged to accurately comply with the instructions stipulated by the settlor. This may include distributing assets to beneficiaries on specified dates or in specific situations, such as reaching certain milestones in the beneficiaries’ lives. Duty of Loyalty and Duty of Care: The trustee must act loyally and diligently toward the interests of the beneficiaries. beneficiaries. This means that you must make decisions in the best interest of the beneficiaries and exercise a reasonable degree of care and attention in managing and protecting trust assets. Record-Keeping and Accountability: The trustee is required to maintain accurate and detailed records of all transactions and activities related to the trust. Likewise, it must provide periodic reports to the beneficiaries, communicating the management of the assets and the financial situation of the trust.
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