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CLD Insights

Panama, key in your asset protection strategy

Panama has become a popular destination for individuals seeking to protect their wealth through estate planning and asset protection. The country offers a variety of advantages, including a favorable tax system, strong privacy laws, and a stable economy. This article will explore the benefits of private wealth management, estate planning, and asset protection in Panama.


Private Wealth Management in Panama


Panama is an attractive destination for private wealth management due to its favorable tax system. The country does not impose taxes on foreign-source income, making it an ideal location for individuals seeking to preserve their wealth. Additionally, Panama offers a range of financial services, including banking, investment, and trust management, to help individuals manage and grow their assets.


Private Interest Foundation (PIF): A popular tool for private wealth management in Panama is the Private Interest Foundation (PIF). A PIF is a legal entity that is established for the benefit of its beneficiaries. It is similar to a trust, but with some unique features.


For example, a PIF is not subject to probate, which means that assets held in the foundation can be passed on to beneficiaries without the need for a court order and allows the establishment of trust like provisions to ensure smooth transfer or management of the assets for and on behalf of the beneficiaries. Additionally, a PIF offers strong asset protection, as the assets held in the foundation are separate from the personal assets of the founder.


Estate Planning in Panama


Estate planning is an essential part of wealth management, as it allows individuals to plan for the transfer of their assets after their death. Panama offers several estate planning tools to help individuals protect their assets and ensure that they are passed on to their intended beneficiaries.


Will: One popular estate planning tool in Panama is the Panamanian Will. A Panamanian Will is a legal document that allows individuals to specify how their assets will be distributed after their death. It is important to note that the Panamanian Will only applies to assets held in Panama, so individuals may need to create separate wills for assets held in other countries. Other important aspects is to consider the different types of Wills that exist in Panama, please contact us if you have any questions or doubts to clear on the matter.


Trust: Another estate planning tool in Panama is the Trust. A trust is a legal arrangement in which a trustee holds assets on behalf of the beneficiaries. A trust can be established for a variety of purposes, including estate planning, asset protection, and charitable giving. In Panama, trusts are governed by the Trust Law of 1995, which provides a clear legal framework for their establishment and operation.


Asset Protection in Panama


Asset protection is a crucial component of wealth management, as it helps individuals protect their assets from creditors and other potential threats. Panama offers a range of asset protection tools to help individuals safeguard their wealth.


Corporations: One popular asset protection tool in Panama is the Corporation. A Panamanian Corporation is a legal entity that is established for the purpose of conducting business.


It offers strong asset protection, as the assets held in the corporation are separate from the personal assets of the shareholders. Additionally, a Panamanian Corporation can be used to hold assets such as real estate, stocks, and intellectual property.


Private Interest Foundation (PIF): Another asset protection tool in Panama is the Private Interest Foundation. As mentioned earlier, a PIF offers strong asset protection, as the assets held in the foundation are separate from the personal assets of the founder. Additionally, a PIF can be used to hold a variety of assets, including real estate, stocks, and bank accounts.



Conclusion


Private wealth management, estate planning, and asset protection are essential components of financial planning for individuals seeking to protect their wealth. Panama offers a range of advantages for individuals seeking to manage their wealth, including a favorable tax system, strong privacy laws, and a stable economy. The country’s range of estate planning and asset protection tools, including the Private Interest Foundation, the Panamanian Will, and the Corporation, make it an attractive destination for individuals seeking to protect their assets and ensure that they are passed on to their intended beneficiaries.



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