What is escrow and how does it work? 
Responsibility and remuneration of an escrow agent
The question of the responsibility of an escrow agent arises at different stages of the transaction, but the most difficult in terms of significance and evaluation of its actions is the stage of checking the deposited property during the transfer to the beneficiary. Almost the whole part of the transaction depends on the competence and impartiality of the escrow agent, since the decision on the fulfillment of the conditions by the depositor is made by the escrow agent independently, although the contractual requirements are taken into account. But any contract leaves a field for interpretations.
Therefore, it is necessary to register the contract in such detail that the depositor and the beneficiary clearly understand the criteria for the evaluation and performance of this contract by the escrow agent. The moment of the property transfer is either prescribed on a calendar basis or the conditions under which the contract will be considered as fulfilled are specifically stipulated.
The responsibility of an escrow agent should be set forth in the contract text, specifying its occurence and its amount.
To motivate an escrow agent, the point about the amount of remuneration is important. As a rule, the escrow agreement is paid, in other words, the escrow agent is entitled to remuneration for the services rendered, and the other parties to the transaction — the depositor and the beneficiary — are generally jointly liable for the escrow agent under this agreement.
However, the escrow agreement differs from the storage agreement in that the escrow agent does not have the right to retain the deposited property or receive remuneration at the expense of this property, if such a settlement option is not specified by the contract.
What is the reward of an escrow agent? The parties usually stipulate its amount in a separate contract in order not to resolve disputes in court. Courts determine disputed sums of precedent by comparing the cost of similar services in similar circumstances.
Parties must take into account the need for notarization of the escrow agreement. The exceptions are agreements on non-cash funds, non-documentary securities, or various ownership rights in general or in particular.
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