Trust assets are deposited into an escrow account with a state, federal or country financial institution selected by the Trust where the financial institution maybe an agent on the escrow account. The Trust receives a request for an ITR from its surety FSA, LLLP. The trust underwriter then reviews and approves the request. The Trust then creates an ITR which is submitted to the surety for the Obligee, or directly to the Obligee, along with a copy to the Grantor along with a “Joint Pledge Request” for approval. Once the Trust and the Grantor have signed the Joint Pledge Request (JPR), the JPR is sent to the escrow agent to be executed.
The ITR is evidence that the assets exist, and that they are being held in trust.
- The assets supporting the ITRs are in an irrevocable trust to prevent the holding bank from ever having access to the assets.
- Likewise, the Trust may not invade the corpus of the trust except to satisfy ITR obligations on identified condition as set forth in the ITR.
- The ITR is not negotiable during the term of the ITR. This is because it has been pledged as backing to the Obligee.
- Neither does the Trust have access to or the authority to sell the ITR or the underlying assets, just as any other trustee has a fiduciary duty not to invade the corpus of the trust.
- The ITR does have a cash value – that being the value of the assets held in trust and, when not pledged as backing for an ITR, is a highly liquid investment/asset.