- It is a private legal entity to preserve, manage a wealth, and plan the succession of the person transferring the assets. It serves to transfer all types of assets to a legal entity that, unlike a natural person, does not die. Therefore, at the time of the original owner’s death, there is no urgency or need to go through a succession process because the foundation remains in existence.
- The transferred assets are owned by the foundation. Thus, the assets are protected and are no longer subject to precautionary measures or contingencies against the founder.
- The original owner of the assets can still retain control over the foundation’s activities and the management of the assets, but the assets do not belong to them, and their rights cease upon death. The founder becomes “de-wealthized.”
- The assets of the foundation are not included as part of the conjugal society or the deceased’s estate because they belong to the foundation, which is a Panamanian legal entity.
- It is an effective way to ensure the fulfillment of the founder’s wishes, who decides how the assets transferred to the foundation will be distributed or preserved after their death. The foundation, as a legal entity, ensures that these wishes are executed. It is a will and succession process carried out during the founder’s lifetime.
- The founder defines who the beneficiaries of the income generated by the assets are and/or how the assets will be distributed once certain events occur, such as their own death or that of someone else, reaching a certain age, etc. The founder can normally be the primary beneficiary of the foundation until their death, after which the beneficiaries become their spouse, children, or any other natural or legal person.
- It allows for much flexibility and creativity in its creation and regulation through its regulations.
The foundation can own all types of assets such as real estate, shares, and interests in other entities or funds and investment portfolios both in Panama and abroad. - It ensures the economic survival of children with disabilities or of the founder themselves during illness and old age.
- It serves to consolidate assets located in different parts of the world.
- It favors anonymity and information protection because the founder goes from reporting each asset to public authorities to reporting their benefits in the private interest foundation. The foundation’s regulations are 100% private.
- It allows other people to benefit from a wealth or from the assets without the need to transfer the assets to those individuals.
- Panamanian legislation is very similar to Colombian legislation, which facilitates the understanding of the interested parties and their trusted lawyer to provide better support. Additionally, it is important to address this significant topic in Spanish when it is the native language.
Do I recommend it?
Yes, when created according to a clear plan, with responsibility, awareness, and especially with the leadership and participation of the person or family for whom the succession planning is done, as it concerns their wealth, their material legacy, and how the beneficiaries’ LIFE will be affected by their DEATH. I recommend including a very personal chapter dedicated to establishing guiding extralegal principles as part of a will of love.