On August 13, 2025, the Ninth Collegiate Court in Civil Matters of the First Circuit in Mexico (Federal level), issued a ruling clarifying who holds the ownership of assets contributed to a security trust.
The Court clarified that assets transferred into a security trust are conveyed to the trustee in ownership. As such, the settlor disposes of and removes these rights and/or assets from their estate. The trustee then acquires authority to exercise the rights or benefits arising from such assets exclusively for the benefit of the beneficiaries and in line with the purposes of the trust.
In this regard, the Ninth Court stated:
“… A trust entails the transfer of rights or ownership of the assets contributed. Although such ownership is of a special nature—since the trustee may not use the assets for its own benefit, but only for that of the beneficiary—the assets transferred to the trust are excluded from the settlor’s estate and become part of an autonomous estate, the ownership of which belongs to the trustee.”
The ruling is particularly significant as it was issued in the context of an insolvency proceeding. The decision reaffirms the Mexican courts' criteria that assets contributed to a security trust are not included in the debtor’s insolvency estate. Consequently, obligations secured through this structure provide creditors with assurance that, should the debtor be declared bankrupt, their guarantees remain enforceable and intact, ensuring repayment in the event of default on the underlying obligation.
In case you need any advice regarding the formation or strategic design of trusts, you may approach the members of Cuesta Campos' Banking and Finance practice.