Panama Private Interest Foundations For Asset Protection
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by: ReginaldR.Nicholsonian
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Protection from rampant litigation, circumventing forced heirship, a hunger for renewed personal privacy, fears with respect to the integrity of your native country's banking system are just a few of the reasons you might wish to take your personal assets offshore. Panama offers numerous methods for personal asset protection and estate planning with the Panama Private Interest Foundation (henceforth PPIF) being particularly suited to those seeking a high degree of anonymity and asset protection.
The Panama Foundation was created by the legislative arm of Panama's government in 1995 and can be thought of as a form of marriage between trusts and wills with the protective benefits associated with Panama offshore companies. The statutes that underpin this asset protection structure were inspired by the "Stiftung" model that was first introduced in Liechtenstein. In general, a Panama Foundation has:
- the Founder - the person who forms the foundation and pays in the initial capital; - Council - like a company board of directors, council members are recorded in the public registry; Protector - appointed by council at the creation of the Foundation; Beneficiary - appointed by the Protector and can remain anonymous.
The strength of the PPIF lies in the flexibility afforded by the appointment of Protector and Beneficiaries. An example might be to use the PPIF as asset protection against intrusive local inheritance stripping legislation where you may opt to appoint yourself as the Foundation Protector until your death. On your death, the purpose of the Foundation may change in accordance with your prior written instructions to benefit the Foundation Beneficiaries previously appointed by you (for example, your offspring).
Intrinsic to the working of the foundation are the Letters of Instruction. These enable the Protector to specify exactly what should happen to the Foundation's asset should something (such as death or incapacitation) happen to the Foundation Protector. It is possible to use the Letters of Instruction to specify the appointment of a new Protector on death and thus keep the Foundation in perpetuity (keeping the PPIF in perpetuity can provide an additional safeguard against forced heirship disputes since Panama will not give credence to the forced heirship laws of other countries). Without a mandatory filing requirement, the Letters may be maintained privately to ensure the privacy of the Protector and Beneficiaries.
While a Panama Foundation cannot do "for profit" business it can own; Panama corporations, real estate, bank accounts and other assets.
Panama law guarantees the assets of a PPIF against sequestration and embargo provided the Foundation does not engage in illegal activity. This prevents assets being frozen as a protective measure prior to a court trial.
The PPIF offers a very sophisticated, anonymous and protective vehicle to asset protection.
About the Author
To gain a more detailed understanding of panama private interest foundations or offshore asset protection please visit the author's OffshoreLegal.org website.
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