In the legal and financial world, a trust is one of the most versatile tools for protecting assets, planning estates, structuring businesses, and ensuring the fulfillment of obligations. However, not all trusts are the same—there are different types, each with specific objectives and legal effects.
In this article, JVD Consultores clearly explains the main types of trusts and when it is advisable to use each one.
A trust is a contract through which an individual or legal entity (settlor) transfers assets or rights to a third party (trustee) to manage them for the benefit of one or more beneficiaries, in accordance with previously established conditions.
Its most common uses include:
Asset protection
Estate planning
Collateral for obligations
Asset management
Real estate development
Corporate structuring
This is one of the most commonly used types. Its purpose is for the trustee to manage specific assets or resources according to detailed instructions.
Used for:
Investment management
Real estate administration
Income management
Business projects
Key advantage: professional order and control over assets.
In this case, assets are transferred as collateral for an obligation (for example, a loan). If the debt is not fulfilled, the trustee may execute the assets as agreed.
Used for:
Bank financing
Construction projects
Complex commercial contracts
Key advantage: provides legal security to creditors and investors.
Used as an estate planning and inheritance tool. It allows you to define how assets will be distributed after the settlor’s death, avoiding family disputes and lengthy probate processes.
Used for:
Protection of heirs
Minors
Persons with disabilities
Family businesses
Key advantage: asset continuity and confidentiality.
Once established, it cannot be freely modified or revoked by the settlor (unless expressly allowed in the agreement).
Used for:
Asset protection
Long-term wealth structures
Tax planning within the legal framework
Key advantage: strong asset separation against future risks.
Unlike the previous type, this one can be modified or terminated during the settlor’s lifetime.
Used for:
Flexible wealth organization
Initial estate planning
Temporary asset management
Key advantage: control and adaptability.
Very common in real estate developments. It centralizes funds from buyers and investors and regulates their use for project construction.
Used for:
Real estate developers
Pre-sales
Mixed-use projects
Large-scale developments
Key advantage: financial transparency and buyer protection.
Used to structure corporate operations, partner participation, business expansion, or corporate reorganizations.
Used for:
Joint ventures
Share protection
Restructuring
Asset holding structures
Key advantage: legal order in complex structures.
The correct choice depends on multiple factors:
Asset or business objective
Type of assets involved
Risk profile
Family situation
Applicable regulations
Tax and corporate strategy
For this reason, creating a trust without specialized legal advice may lead to unintended consequences.
At JVD Consultores, we have a legal team experienced in structuring trusts for individuals and companies, ensuring legal security, regulatory compliance, and tailored solutions.
📩 Are you considering creating a trust or reviewing an existing one?
Write to us today and receive personalized advice to protect your assets and make legally sound decisions.
