Foundation for third-party funds: What is it and how does it work?

The business world is all about trust and careful handling of money. A trustee foundation helps with this. This is a separate, independent organization that keeps money that you receive for others, for example, in the legal profession, debt collection or when buying a house.

With such a foundation, the money is placed in a separate bank account without being mixed with the money of a company or person. This keeps it clear who the money belongs to and protects it from seizure or bankruptcy, for example.

At CrediFin Netherlands, we specialize in the secure management of third-party funds, especially in the collection industry. We make sure that funds are safely received and arrive neatly where they belong.

What is a trustee foundation?

A third-party foundation is a legal tool for keeping money you receive for others safe. That money does not go into your regular business account, but into a separate account belonging to the foundation.

Key points:

• The foundation is separate from you or your company.
• The money is kept separate so there is less risk of commingling, fraud or seizure.
• You comply with rules that are even mandatory in some industries.

A simple example:
A lawyer receives money for his client, such as a settlement amount. That money is deposited in the account of the trust account, and not in the office account. That way the client knows for sure: my money is safe.

A trust foundation ensures trust, security and compliance with the law. This plays an important role in several industries.

Importance in different sectors

1. Legal services (lawyers).

• In the legal profession, it is mandatory to keep client money separate.
• Clients know that their money is well protected and not used for office expenses.
• Funds do not get mixed up with corporate finances, making the client's position stronger.

2. Collection agencies

With a collection agency, such as CrediFin Netherlands, a foundation third-party funds plays a major role.

• If a debtor pays an outstanding debt, that money first enters the account of the foundation third-party funds.
• Then the amount is paid - as agreed - to the creditor.
• The creditor can thus be sure that his money will not be used for anything else.

3. Real Estate

• Buying a home or commercial property often involves large sums of money.
• A third-party foundation keeps that money safe until the sale is complete.
• The money goes through to the seller only when everyone agrees, which avoids unnecessary discussions.

4. Other sectors

A trustee foundation can also be valuable in other industries, such as:

• healthcare institutions;
• accounting firms;
• developers;
• organizations that regularly manage third-party funds.

In all these cases, the foundation provides additional security and clarity for all parties involved.

It may sound complicated, but in practice it's not too bad. Broadly speaking, this is how a third-party foundation works:

1. Do you receive money for someone else? Then that amount will be deposited into the special account of the trustee foundation.
2. The foundation keeps careful records of the amount received, who it is from and what it is for.
3. The money remains safe until it is clear to whom and when it is to be distributed.
4. The foundation ensures that payment is made according to the agreements made and according to the law.

At CrediFin Netherlands, we make this process as simple as possible. We ensure that funds arrive safely, are carefully managed and are transferred to the right person or organization on time.

Do you work with money that (temporarily) belongs to someone else, such as client funds or third-party funds in debt collection or real estate transactions? Then a third-party foundation is almost indispensable.

• You provide security: the money is in a separate, protected account.
• You offer trust: all parties involved know exactly where the money is.
• You comply with legal rules and professional regulations.

Are you a lawyer, collection specialist or active in the real estate sector? Then a third-party funds foundation will help you handle third-party funds professionally and transparently. That way you - and the people for whom you manage money - know that everything is properly arranged.

Want to set up or use a third-party foundation, or professionalize your existing methods? Then engage a party that specializes in this and can help you with the legal and financial set-up so you can focus on your own work.

This makes a third-party foundation more than just a separate account: it is a reliable way to handle other people's money honestly, safely and clearly.