Key Panamanian corporate vehicles for asset protection of modern families

Juan Antonio Boyd
Veló Legal, Panama City
jboyd@velo-legal.com

Introduction

In Panama, as in many other countries, where same-sex marriage is not yet legally recognised, same-sex couples face unique challenges in managing their legal and financial affairs. This legal reality highlights the need for robust alternative legal structures for asset protection. As the world progresses toward inclusion and respect for diversity, estate planning for modern families has become a critical topic in Panama. Renowned for its robust financial and legal system that supports investment and asset protection, Panama offers a variety of corporate structures that are especially beneficial for families aiming to secure their financial future and the wellbeing of their loved ones.

Corporations and private interest foundations

Corporations (Sociedad Anónima or SA) in Panama are a popular choice for managing and protecting assets. They offer confidentiality and flexibility, allowing investors to securely maintain ownership of their assets. This structure is advantageous for those who need a high level of privacy and operational control over their financial matters.

On the other hand, private interest foundations in Panama provide an even more personalised alternative for estate planning. These entities are designed for long-term asset management and offer a legal framework that allows for detailed specification of asset distribution among beneficiaries after the founder’s death. This feature is particularly crucial for same-sex couples and other modern family structures, who may face legal challenges in less progressive jurisdictions.

The advantages of the Panamanian trusts

In addition to corporations and private interest foundations, trusts are another significant vehicle for estate planning in Panama. Trusts offer strategic advantages for asset protection, estate planning and tax planning. The trust can be tailored to support complex family arrangements and financial goals, making them ideal for modern families. A trust can manage assets on behalf of beneficiaries, ensuring that financial support is available for education, healthcare and other personal needs according to the stipulations set by the trustor.

The importance of a solid legal framework

Panama’s legal framework respects and protects the rights of individuals regardless of their nationality or gender identity. Combined with its flexible corporate structures, this creates a conducive environment for modern families to plan their estates without fears of discrimination or mismanagement.

A quick example using a Private Interest Foundation

Consider the case of a same-sex couple with two adopted children. By establishing a private interest foundation in Panama, they can ensure that, in the event of their passing, the assets are used for the care and education of their children as specified in the foundation’s statutes. This setup guarantees that the founder’s wishes are fully respected, a crucial consideration for families that might face legal obstacles elsewhere in the world.

Challenges

Despite the advantages, estate planning in Panama for modern families requires careful consideration and a well-thought-out strategy. It is vital to work with lawyers and advisors who understand the specific dynamics of modern families and who are familiar with the Panamanian legal framework. Additionally, staying informed about legislative changes both in Panama and in the family’s country of residence is important.

By leveraging the strategic benefits of corporations, foundations and trusts, modern families can manage the complexities of estate planning with confidence, ensuring that their assets are protected and their loved ones are cared for, today and in the future.