What is escrow and how does it work? 
What are the advantages of escrow design?
In what cases an escrow agreement is preferable to other types of transactions? It gives clear benefits in several situations.
For example, when there is an “exclusive” legal regulation established by law for the property being deposited.
Or when it is necessary to independently determine the basis for full payment. An escrow agent performs a compliance check on the fact of the property specified in the list or the occurrence of legal actions, for example, a change of management or shareholders.
When concluding an escrow-agreement, the beneficiary is insured against default by the depositor, regardless of the complexity of his economic situation, force majeure, etc.
For the debts of the beneficiary, a claim is made on his claim to the escrow agent for the transfer of the deposited property. This scheme allows you to insure the safety of assets, for example, when buying a business or at different stages of a complex transaction.
This construction also works well under lease agreements, where part of the rent may be deposited, and the contract provides for the return to the tenant of this amount in the absence of damage to property during the lease. If the leased property is damaged, the lessor will receive the deposited amount. It will act as a kind of insurance against possible damage.
Escrow agreements are also convenient to use in inter-creditor agreements. The debtor reimburses the escrow agent's debt, and he acts as an intermediary distributor between creditors under the contract in fulfillment of obligations for debts.
Very important information for the beneficiary: it is impossible to collect, arrest or take other measures in respect of the deposited property on the debts of the depositor or escrow agent. The law determines this measure in respect of any property, therefore, the funds deposited are also protected.
The word ‘trust’ means ‘confidence’. What is the difference between the notions of ‘belief’ and ‘confidence’? A person can believe blindly, but confidence is a belief supported by actions and deeds. At first glance, a trust is very similar to a normal contract of assignment: one person authorizes another to manage his/ her property in one way or another. However, the similarity is purely external. The peculiarity of the trust is that the thing that is transferred to the management, irrevocably becomes the property of the manager. I can give an example of the situation where the trust is used. An old millionaire retires because he is no longer able to manage his entire fortune. He wants his sons to continue his work, but he does not want to simply give his sons large sums of money, apprehending that young people could squander them. Thus, our millionaire finds a reliable lawyer and concludes a trust agreement with him. Under this contract, the lawyer receives the state of a millionaire (trust founder) in his management. The lawyer undertakes to manage the fortune only and exclusively in the interests of the sons of a millionaire. He (the lawyer) has to finance their education, cover their expenses to set up their own business, etc. At the same time, the trust contract strictly prohibits the lawyer to pay from the allocated fortune for the expenses that would be unreasonable use of money in the opinion of the father (bets on races, excessive restaurant expenses, etc.). The founder of the trust may appoint a fixed annual rewarding for the performed work to the lawyer (Trustee) himself from the amount of the transferred property. Global Actual Services is the personal lawyer of each of us, the members of the club Alliance, that will monitor and guarantee the observance of our rights in any situation having taken control of our possession.
Dmitriy Levitskiy (Ukraine)
Private lawyer