Civil trust – What is it, definition and concept | 2022

The civil trust is a contract established in a public deed by which an estate is transferred between two parties or in a will by which an asset is reserved for a person, under a certain condition.

This figure is used to insure certain assets, both movable and immovable, and can also be values ​​that will usually be reserved for a family member. It is a figure usually used by parents who want to ensure the economic future of their children, whether they are alive or not.

For example, leaving money in an account that will be transferred to a child if he reaches higher education and that money can only be used to cover expenses for these studies. Until this situation is met, the money will not be delivered to the child.

The purpose is to protect a part of the estate for a specific person.

In Spain, when we speak only of the term trust, the testamentary disposition is understood. On the other hand, if we talk about a civil trust, it includes the option of a private contract where certain assets of the estate are reserved to certain people without having to be through a will.

People involved

The three parts that make up the trust are:

  • Trustor: It is the person who leaves the asset reserved in a public deed or, in the case of a hereditary trust, the trustor will be the one who leaves in writing in his inheritance the order to inherit his assets.
  • Trust: It is the person who has to take care of the assets that make up the trust so that the trustee receives it. In the case of inheritance, the trustee is the first person established in order to inherit and the first to receive the inheritance. He is the one obliged to conserve and pass on what he has inherited. He has the right of ownership, but not the property.
  • Trustee: You are the ultimate beneficiary of this trust. In the case of the hereditary trust, it is the second person established in the order of inheriting and the one who receives the inheritance from the trustee and not from the settlor. (He may or may not be the trustee’s heir as well.)
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Civil Trust Pdf Page 0001

The trust categories are:

  • pure trust -> Obligation of the fiduciary to preserve the assets that he will later transmit, which entails the unavailability of the assets.
  • residue trust -> Obligation of the fiduciary to transmit the assets, but has availability on them and depending on what type of availability there are two subtypes:
    • The trustee is instructed to keep at least a minimum of the estate or inheritance to pass on to the next (the trustee).
    • Nothing is indicated to the trustee and whatever is left of the estate or inheritance (if there is any) will be passed on.

Creation of the civil trust

The steps to make this trust are:

1. The settlor must make an inventory of the assets left in trust, it can be all or just a part of it.

2. You must indicate the person you leave as trustee and trustee. And having drawn up this legal contract in life, he can cancel or modify it in the terms he wants. You can change the trustee or trustee or the part of the estate you want to put in trust.

3. It will have to be publicly deeded, that is, signed by a notary.

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