The Costa Rican Commerce Code is one of the
most evolved regulations in our Civil Law. For this reason, trade
in Costa Rica has received a large amount of foreign investment
through contracts equivalent to its foreign versions in other legal
systems. A clear example is the trust, which shares the structure
and objectives of a USA trust fund.
One of the different types of Trust that the Commercial Code describes is the testamentary trust/probate trust , which is usually recommended for estate planning. Therefore, it is important to understand the probate trust, its benefit for those who can achieve it.
What is the Probate Trust?
The Probate Trust will exist when a person
transfers the fiduciary property of certain assets and
goods to a third party, who is obligated to exercise it for the
benefit of whom is designated as a beneficiary in the same trust.
That designated person must comply with the statutes and deadlines
filed by the trustor.
The testamentary trust option is more than recommended for those who have investments such as equity, participation in companies and cash deposits, which make the amount of assets increase, and if it is considered that potential heirs don't have the necessary skills necessary to administer or direct the assets and the invested capital.
Parties of the Probate Trust
The settlor (testator): The testator disposes of his
patrimony in a free and conscious way, being necessary for him to
have the capacity of enjoyment and exercise.
The fiduciary (executor): The fiduciary is the one who executes the last will of the trustor (testator) after his death, being in this case, an individual or a fiduciary institution (corporation) with capacity to receive in trust. This guarantees that the execution of the trust is made by an institution with experience, technical capacity, moral solvency and permanent duration.
The trustee (heir): Is the person who is entitled to receive the benefits of the testamentary trust.
Probate Execution Procedure
Once the testamentary trust
is constituted, at the death of the
trustor, the execution of the
trustee occurs. The
fiduciary institution has the
responsibility to ensure:
1. That the person holding the trust position is an institution of recognized solvency.
2. The permanence and continuity of the fiduciary work, since the companies have practically unlimited life.
3. That the work of the trustee is carried out by specialized institutions.
4. That the testamentary trust is executed for the benefit of a person, the heir trustee.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.