Does Latin America Need Trusts?

Dante Figueroa (Adjunct Professor, American University Washington College of Law) has recently published his article entitled Civil Trusts in Latin America: Is the Lack of Trusts an Impediment for Expanding Business in Latin America ?, 24 Ariz. J. Int'l & Comp. L. 701 (2007).

Here is the conclusion of his article:

This article has identified the main similarities and differences between the Anglo-American trust and the Latin American fideicomiso. Special attention was given to the core differences between both institutions in assessing the possibility of creating a truly useful Latin American fideicomiso. For this purpose, the article reviewed existing fideicomiso legislation in Latin America and advanced general criteria for future proposals in this area.

The ground is fertile for changes that will bring more business opportunities for everybody in the region. Domestic and foreign investors, claim and expect more creative and innovative legal tools to welcome more investment in the region. A new modern version of a Latin American trust goes to the heart of these expectations. A growing number of stakeholders think there are convincing reasons to believe trusts would bring many benefits to common law countries such as preferential tax treatments, the avoidance of probate procedures, and the isolation of assets from third parties. The Latin American region can not avail itself of these types of benefits unless a more modern form of trusts is implemented, either on an international context or within an internal country context.

A solution on the international level for the international recognition of trusts in the Anglo-American and Latin American legal systems is still a strong alternative. In the meantime, many would regard the unilateral design of a new modern Latin American trust as a beneficial first step. The analysis and proposals contained in this article seek to provide some guidance to that effect.