What is a trust?
Trusts are legal and banking arrangements used to finance projects such as property purchases, constructions of houses, buildings, apartments, and more. In a trust, the bank, financial institution, or individual who lent the money ensures its eventual recovery by controlling the administration of the real estate project.
Entities Involved in a Trust
There are three entities involved in a trust:
- Trustee: A natural or legal person registered with the SUGEF (Superintendency of Financial Institutions in Costa Rica) to whom the property is transferred. They typically receive a monthly or annual fee for administering the trust.
- Trustor/Settlor: The person who transfers the property to the trustee due to a loan, allowing the trustee to administer it and ensure the repayment of obligations incurred by the trustor.
- Beneficiary: Receives the benefits of the trust until the contract between the parties concludes. If the conditions of the trust are met, the trustor regains the property, or it remains with the beneficiary due to the breach of established obligations.
When setting up a trust, legal advice is necessary. It requires undergoing a study, similar to a loan application, detailing financial history, providing various documents, and clearly understanding the trust’s contents.
What are the benefits of a trust?
The property is unseizable. Lower costs for the individual or company requesting it. Tax benefits. The trustee is properly supervised by the SUGEF. In Costa Rica, a trust can extend up to 30 years and can be extended further.
