By Thorvald Pazos Casas, SILMÉXICO Research Center, Translated  by Jessica HernándezJessica Hernández

Trust is a fickle legal instrument, which has been transformed over time and has become popular in commercial practices. Recently, we can say that it is the rise of this very flexible legal vehicle, there is certainly no specific law that regulates all aspects of this figure, however, the Trust has been strengthened through a solid legal foundation that depends on the type of trust that is intended to be established, which implies the consultation of various current Mexican laws. In this article, we will focus on one of its most significant variants: Trust Management.


What is the Trust? The Trust in accordance with the contemplated provisions in the General Law of Credit Titles and Operations2 (LGTOC), in its number 381. It is a contract or a legal transaction through which a person called Trustor, transfers the ownership or ownership of assets and/or rights to a financial institution, called fiduciary so that it conforms to the purposes and objectives of the contract that manages the assets or rights in favor of the trustees or beneficiaries. 

From the previous concept, it is important to address two questions; Who can participate in a trust? Can all assets and rights be transferred? According to the first of the questions raised, article 381 of The LGTOC mentions that people with capacity can be subjects, this is in relationship with the Civil Code of the State of Oaxaca in its numerals 21 and 25 respectively, they mention that people are divided into: Natural Person and Moral person. This means that both individuals and legal entities (companies, etc.) can participate in a trust, as long as they comply with the legal requirements and can exercise their rights and obligations. For its part, regarding the second question, it is important to focus on that, people have the ability to decide what to do with their assets and/or rights freely, except and with the exceptions that these are found in commerce, are lawful and do not affect third parties. That is, in the example of not affecting third parties, it refers to the fact that you cannot transfer food rights, or use a trust to avoid your responsibilities in that regard. In this sense, it is mentioned that certain assets and rights cannot be transmitted through a trust if its transfer violates laws or affects the legal sphere of third parties. Knowing the previous generalities, we are going to study one of the variants that the Trust has, which is known as “Fideicomiso de administration”. Rodolfo Batiza states that “TRUST MANAGEMENT” is known in which the trustor delivers real estate to the trustee who is responsible for the execution of lease contracts, the collection of rents, the promotion of eviction or eviction trials, payment of various taxes levied on real property, etc., all in the interest of the beneficiary”.

Manuel Villagordoa Lozano3 points out that management trusts “are those by virtue of which certain assets or assets are transferred to the trustee rights, so that the fiduciary proceeds to carry out the custody operations, conservation or collection of products of the trust assets entrusted to him the trustor, delivering the products or benefits to the trustee”.

What we can interpret from the two previous definitions, the function of administration trust is to transmit to the trustee certain assets and rights (real or personal property, real or personal rights, including securities, titles, credits, and cash) for him to keep, guard, manage, collect and transmit in your favor or to a third party. Then the question arises, when can we use trust management? There will be trust management provided that the trustee is prohibited (because it is not part of the purposes of the trust) the provision of assets in favor of the trustee or a third party.

The activities that the trust carries out are those related to the custody and conservation of the assets that make up the trust assets, as well as the collection of products or returns that they generate and transmit to a third party. Likewise, you may make the investment of trust assets through the acquisition of goods of another nature.

The constitution of Trust Management not only protects your personal assets from external threats, but it can also improve your financial situation by reducing the tax burden. It is a smart strategy to effectively manage and safeguard your assets, offering you the peace of mind and security you need on your path to financial success. Commercially, Trust Management is a flexible legal instrument that adapts perfectly to the needs of the operation, and additionally provides great benefits such as, Can the assets of trust be seized? They cannot be seized by creditors or debts against the trustor. The assets and rights are in the name of the trustee and not in the name of the trustor. Only the rights are seized (but if there are no instructions (from the committee) of payment, nothing is delivered). 

Does the trust pay taxes? The trust as such does not, since according to the Art 1 of the LISR, those obliged are the Natural Persons and the Legal Persons, however, the Trust is not a person. Therefore, those who must pay the taxes are the settlors and the trustees. 

1 Mendoza, C. (29 de marzo del 2022). El Fideicomiso y sus implicaciones tributarias. Colegio de Contadores Públicos de México. https://www.contadoresmexico.org.mx/Vida-colegiada/Fideicomisos-y-sus-implicancias-tributarias

2 Ley General de Títulos y Operaciones de Crédito. DOF 22-06-2018.


3 Mendoza, C. (29 de marzo del 2022). El Fideicomiso y sus implicaciones tributarias. Colegio de Contadores Públicos de México.



Monday, August 28, 2023, By Julio Velázquez, Lawyer in SILMÉXICO

When we think about buying or selling a property, we generally focus on some elements such as the price, delivery date, date of signing of deeds, etc. For this reason, we omit to analyze the background of the process that will result in a successful operation, such as the passage of due diligence or due diligence, however, what do we mean when we talk about this topic in the world of Real Estate? 

The process of buying and selling properties is made up of various stages, one of them, and perhaps the crucial and important stage is due diligence, in which the property information must be analyzed to provide suitable legal certainty for the celebration of said operation.

Therefore, a legal team of specialists in real estate consulting must objectively and in detail analyze all the documents that make up the transaction file, this analysis must result in a favorable opinion to later give the green light, this in order to provide security and legal certainty to the purchaser or seller of the property.


Once the initial document is signed, the due diligence time varies; everything will depend on the negotiation of the parties or the conditions in which the operation is carried out, although the final opinion must be given by the expert adviser who is studying the operation, since, due to his/ her experience, he/ she will be able to assess the time that is performed documentation inspection thoroughly. 


Normally an average term is from 10 to 30 business days, in the most delicate operations; either because a large amount of resources is handled or due to a condition that greatly compromises the same parties involved, the due diligence period could exceed the time contemplated; This is so that, in case it is required, process or obtain a missing document or an indication that conditions between the parties have the window of time.


Once we have identified the average terms of analysis and study, it is time to know what are the elements that are studied in this due diligence.

In each operation, the parties must have a checklist on which they rely to request information on the property, the owner, and the legal status, among others. Normally the most important elements are made up of:


  • Public deed.
  • Registration of the deed before the RPP (Public Property Registry).
  • Identity and quality of the seller, which is detailed in the public deed or power of attorney (as well as the corresponding record of power).
  • Compliance with tax obligations, that is, payment of taxes.
  • The property has basic services, such as electricity and water.

 However, these points and the checklist will depend on each operation, since they are all different.

 At SILMÉXICO there is a strong and consolidated legal team of specialists in real estate consulting that will be able to help review each of your operations in detail, making you feel comfortable and legally secure.