According to the law, a fiduciary is he who receives the assignment and responsibility to administer the assets of third parties, both tangible as well as intangible, and must do so with the utmost diligence, transparency and confidentiality, never losing sight of the instructions received by the grantor and with the objective of obtaining the maximum benefit in favor of said grantor.
Why use a fiduciary?
You use a fiduciary when you wish to administer your assets with maximum confidentiality, or when you don’t want to appear in one or more specific transactions, you don’t want to attract attention or simply as a preventative security measure. A fiduciary also helps avoid attacks on your patrimony by supposed “claimants”.
It is allowed, in some countries, to occasionally offer fiduciary services, without being regulated; in others, the services must be regulated through an agreement with fiduciary companies or a trust company.
One of the most important advantages is that the fiduciary becomes a withdrawing agent, so that he not only administers his client’s patrimony and finances, but he will also do the declaration of the assets’ income to the tax agents, so that his client can keep his anonymity in certain activities (for example, foreign activities) and won’t have to deal with the agent or appear in this task.
How to hire a fiduciary
The fiduciary is hired through a power of attorney, or POA, through which the assets, object of the contract, will continue to be the client’s exclusive property, and with the POA the fiduciary can only act according to the instructions given by the client.
Who will guarantee the fiduciary for me?
All fiduciaries must follow four basic ideas:
- They must always make the best decisions that benefit the person that named them as fiduciary.
- They must manage the person’s assets and money with great care. A fiduciary’s functions go from paying bills and invoices and supervising bank accounts up to making investments, liquidating taxes, and collecting rent. Faced with so many responsibilities, it is essential that he be extremely cautious.
- A key concept of the fiduciary is that his money and the money of the person he represents must always be kept separate. Any confusion in the records can present problems to the person.
- It’s completely essential that the records of assets and money of the person represented are accurate and complete. Any omission can have legal consequences.
Our law firm offers occasional fiduciaries (frontmen), trust contracts and go-betweens with fiduciaries. Explain what you need in an email.
