Creatrust > Services > Wealth Structuring Advice and Inheritance tax Planning > Fiduciary Agreement

The Fiduciary Agreement was implemented in 2003 together with the approval of The Hague Convention on Trusts recognition. Fiduciary agreements may be put in place by and between any persons, being resident or non resident, individuals or company.

 

The Fiduciary agreement is often defined as a contract where a person transfers the ownership of one asset to another person, named the fiduciary, who will be in charge to exercise ownership rights on his behalf and re-transfer the asset to a named person at the end of the contract.

 

The Fiduciary agreement will determine, in a written document, the description of the asset, the way the ownership rights have to be exercised and the persons or the category of persons (beneficiaries) to re-transfer the asset to.

 

In many types of situation, the fiduciary agreements may be used ad follows:

 

The fiducie management, where the fiduciary assets are transferred to the fiduciary, which manages them for a certain period following the instructions of the principal, which are laid down in the fiduciary contract. At the end of the agreement, the fiduciary assets will be transferred to the principal.

 

The fiducie guarantee, the legal ownership of an asset (often money claims) is transferred to the fiduciary in order to guarantee an obligation of the principal towards the fiduciary. When the principal has met all its obligations, a re-transfer of the good shall take place.

 

The fiducie liberality, where the principal mentions in the fiduciary agreement a third beneficiary to whom the goods (monies) should be transferred by the fiduciary. This is generally made in inheritance, will, testament or a donation by the principal. One will observe the forced heir ship rules which are of public order. Therefore, this transaction may be on possible in countries where the forced heir ship rules is not applicable.

 

The fiduciary agreement in securitisation funds, where the management company of a securitisation fund holds the fund's assets for and on behalf of the investors. The assets are thus segregated by law.

 

 

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