fideicomiso y planificación familiar

STEP LATAM - 2016

The grass is always greener on the other side of the fence

Por: Lic. Luis Chalhoub

Agenda Preliminary statements Terminology and conceptual precisions Anglo- Saxon trust antecedent of the fideicomiso Substantial differences between Anglo-Saxon trust

and fideicomiso Different uses of fideicomiso in Civil law countries Additional country factors to consider

Preliminary Statements1. We will refer to Anglo-Saxon trust

and fideicomiso as legal institutions that are equivalent in use;

2. The fideicomiso presently existing in most countries having a Civil Law system is an adaptation of the Anglo- Saxon trust, particularly the Anglo-American trust;

3. Both legal institutions keep substantial differences; and

4. Fideicomiso laws in countries having a Civil Law system and their practrical uses varies significantly.

Terminology and Conceptual Precisions

(i) Despite the fact that some countries having a Civil law system use the word fiducia, we prefer to use the word fideicomiso to refer to the legal institution that is used for both commercial and estate planning;

(ii) the fideicomiso we are referring in this paper differs from the propiedad fiduciaria (fiduciary property) and from the mandato (mandate) or encargo fiduciario (fiduciary assignment) which are other legal institutions regulated in Civil Codes - for non-commercial purposes - in some Latin American countries (basically in South American countries having a Civil Code inspired in the Andrés Bello’s Civil Code).


Anlo-Saxon trust, is “an intentionally created fiduciary relationship with regard to property in which the legal title is in the trustee, but the benefit of ownership is in another person, the beneficiary.” (Mennell, 2007)Fideicomiso, is “A juridical act whereby certain property is transferred by a person named the settlor to a person named the trustee, for the purpose of managing or disposing thereof in favor a beneficiary, who may be the settlor himself.” (Panamanian Law No. 1 of January 5, 1984, article 1.)“A contract by which a company (the Settlor) transfers goods or rights to another person (the Trustee) who holds these separate from his own property with the remit to manage the property for the benefit of one or more Beneficiaries.” (Article 2011 of the French Civil Code)

The essential elements of these legal institutions are the same:

(i) the transfer of any kind of property, (ii) the particular destination of said property, (iii)the estalishment of duties to accomplish the

particular destination of transferred property.



The Roman fiducia became disused with the appearance of the pledges, mortgages and other similar institutions, and the fidei commissum was expressly forbidden by Napoleon Civil Code, which inspired civil codes in almost all countries having a Civil Law system, and since then disappeared from the radar of all countries having a Civil Law system. The first trust statute enacted in a country having a Common Law system was in the late 1880’s and the first fideicomiso law in a country having a Civil Law system was enacted in a Latin American country in the mid 1920’s.The fideicomiso is an adaptation of the Anglo- Saxon trust and particularly Anglo-American trust.

Substantial DifferencesThe most important features that make the Common Law trust a unique juridical institution:(a) The distribution of property rights between the trustee, who holds the legal title, and the beneficiaries, who hold equitable rights, in regard to the trust estate.(b) The possibility to create a trust by way of a simple declaration of trust by the settlor.(c) The possibility for a settlor to also be the trustee.(d) The essential need to satisfy the three certainties rule (i.e. certainty of intention, certainty of object and certainty of subject matter) to guarantee the existence and legal recognition of a trust and prevent its re-characterization or annulment.(e) The term limitations imposed by law.

Substantial Differences(f) There are particular kinds of trust allowed (e.g. implied, resulting, constructive, purpose).(g) A variety of equitable remedies (e.g. specific performance; injunctions; appointment of receivers) available to beneficiaries, which guarantee them their equitable rights in regard to trust property. Equitable system recognized to beneficiaries some rights which are like rights in rem since it may be exercise against third party purchasers who knew about the existence of trust and beneficiary rights.(h) Precedents (case law) as opposed to enacted legislation, as the main source of law. This is important since trust law is of suppletory nature, meaning that it is relevant to supply rules where the trust instrument lacks. It must be noted that United States precedents may differ from those of the Common Wealth countries.

Substantial DifferencesPANAMA

(a)Division of property rights into legal tittle, held by trustee, and equitable tittle, held by beneficiary, that an Anglo-Saxon trust creates, is non-existing in the fideicomiso;

(b)beneficiaries of a fideicomiso have actions in personam against the trustee to enforce execution, prevent overreach or deviation of powers, claim for damages due to breach of duties and remove the trustee;

(c) the possibility for the settlor to also be the trustee, which is allowed in Anglo-Saxon trust is non- existing the fideicomiso since Civil Law considers the self-contracting as a juridically impossible figure;

RICARDO J. ALFARO

Substantial Differences

JORGE VERA ESTAÑOL

IVES LIMANTOUR

MEXICO(d) Generally, there are no purpose and charitable fideicomisos either, since fideicomiso laws in countries having a Civil Law system usually require the designation of beneficiary (ies);(e) different than the Anglo-Saxon trust, the majority of countries having a Civil Law system (not presently the case of Panama) requires that the trustee be a juridical person having a license granted by a regulatory entity (usually Banks);(f) not every country having a Civil Law system has a rule against perpetuities (e.g. Panama) and those having said rule do not have the same term.

More commercial purposes (i.e. activities related to banking and securities market) Less estate planning.


Edwin Walter Kemmerer, a US economist and Princeton professor, influenced in several Latin American countries’ (i.e. Mexico – 1917, Guatemala -1919, Colombia-1923, Chile -1925, Ecuador -1926, Bolivia -1928 and Peru- 1930), particularly in their tax, monetary, banking and securities laws, and requiring the introduction of the fideicomiso as part of banking business.

Another reason for this may be the existance of forced heirship in several Latin American countries having a Civil Law system, which difficults the estate planning under local fideicomiso laws.

Country Forced heirship and corresponding portionArgentina 80% descendants, 66% ascendants, 50% spouse

Brazil 50% descendants, ascendants and spouseBolivia 80% descendants, 66% ascendants, 66% spouseChile 75% descendants, ascendants and spouse

Colombia 75% descendants, ascendants and spouseEcuador 75% descendants, 50% ascendantsParaguay 80% descendants, 66% ascendants, 50% spouse

Peru 66% descendants and spouse, 50% ascendantsUruguay Up to 75% descendants, 50% ascendants

Venezuela 50% descendants, ascendants and spouse

Different Uses of Fideicomiso in

Civil Law Countries

Uses of Trust in Latin America

The COLAFI (Trust Committe of the Federación Lationamericana de Bancos) has some statistics about the different uses that the Latin American countries have given to trusts:

mortgage securitizations (e.g. Infonavit and Fovissste/ Mexico);

infrastructure finance (e.g. ENA/ Panama, Aerodom/ Dominican Republic, Aeropuerto Internacional de la ciudad de Mexico);

future income securitizations (i.e. money remittances, tolls, royalties, credit cards, (e.g. Petrobras; Pemex; Pdvsa);

to provide public aid in emergency circumstances (e.g. to agriculture); tourism projects (Fonatur/ Mexico).

USD 0

USD 10,000

USD 20,000

USD 30,000

USD 40,000

USD 50,000

USD 60,000

USD 70,000

USD 80,000

USD 90,000

USD 62,785

USD 42,953

USD 30,782

USD 22,036 USD 20,032

USD 14,082

USD 9,418

USD 1,135 USD 634

USD 78,628

USD 38,862

USD 28,112 USD 29,672

USD 18,625USD 14,286

USD 156 USD 787 USD 031/12/2013 31/12/2014

Thou

sand

of

mill

ions

of

dolla

rs

Value of Assets Given in Fideicomiso per Type

(thousand of millions of Dollars)

Additional Country Factors

to ConsiderFor our purposes, the estate planner needs to find a jurisdiction that in general and among others offers:

(i) macro-economic, social and political stability; (ii)well recognized and similar business and legal

environment (i.e. high professional standard, business friendly, rules for the protection of internationally recognized investors rights);

(iii)comparatively good infrastructure support (e.g. reliable telecommunication facilities; well regulated and solvent banking system; accessibility by comfortable and reliable transportation means);

(iv)a convenient monetary system (e.g. having a stable currency) and a flexible, if any, exchange control (i.e. that allow free money remittance);

Additional country factors

to considerFor our purposes, the estate planner needs to find a jurisdiction that in general and among others offers… (v) an efficient and reliable dispute resolution system (either judicial or ADRs);(vi) the existence of rules allowing flee clause (i.e. the possibility to change the proper law (i.e. law governing the selected legal vehicle, in case it be necessary).

ThanksFor any additional questions please contact us to the following address:

Tel.: (507) 205-6006E-mail: [email protected]

Aquilino de la Guardia N°8IGRA Building, 5th. floor

Tel.: (507) 205 6000 Fax: (507) 269-4891

mailto:[email protected]

Warning:The material contained in the present document have been prepared by the autor solely for academic purposes within the STEP LATAM CONFERENCE – PANAMA 2016, therefore it may not be used as any kind of legal advise. Any reader must get competent advise before making decisions base in this presentation.

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