A trust verses a panamanian foundation – what's the difference between them?

A trust verses a panamanian foundation what's the difference between them

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Anyone who have been seriously studying the subject of offshore and asset protection, the odds are that you have read and heard many good things about the strong privacy benefits of the Panamanian Private Interest Foundation.Fortunately, you have heard correctly, for as an asset protection and estate- planning vehicle it is the best the world has to offer.

When clients come knocking at my door and are truly seeking to create a legal structure that will:1) Reduce tax liabilities, 2) Protect their hard-earned assets from lawsuits, and 3) Make sure that upon death their estates pass to their chosen beneficiaries without unnecessary legal disputes or fees -- most of them will select the Panamanian Foundation.

The history of the Panamanian Foundation is superb, in that it is based on the renowned Liechtenstein Foundation or 'Anstalt' (its German name). The elite of the continental Europeans have used this legal entity as their preferred wealth-management vehicle for generations.

Though this Foundation is an exceptional wealth-management vehicle, as of yet, it has not become so well known or understood in the English-speaking arena. And, of course, it is a matter of opinion, but it appears at this present time, that Panama is in a better position to offer better offshore secrecy and confidentiality than Liechtenstein .

If you have searched the Internet and have read various articles about the Panamanian Foundation you might find yourself slightly confused.Why do I say this?Many such articles have been written by fast-wheeling Internet marketers who lack the correct knowledge of the law.Also, there are articles written by Panamanian lawyers who do not have a sufficient command of English Common Law, and their first language is not English.

The Panamanian Foundation has been designed to be a very special legal animal, which very few people understand. Personally, this appears to be a great asset to those clients who chose to use this vehicle it automatically increases their privacy!

Now, comes the perplexing problem for most clients. Their major difficulty is making a decision as to what is the best course of action to take or the best legal structure to use.To say the least, this complicates matters.Therefore, at the request of one of my clients, I decided that the Panamanian Foundation had to be explained in plain English, thus the writing of this article is the result.This being the case I have to answer the most frequently asked question: What are the differences between a Panamanian Foundation and a Common Law variety Trust?

Here is my best answer.A Panama Foundation combines some of the best legal ingredients of an IBC (International Business Company), and, at the same time, the best legal ingredients of a Common Law Trust into one legal entity again, producing a very special legal animal.In general, a Foundation is set up to passively hold assets like bank accounts, stocks and shares, and real estate.

Included in the Foundation's uniqueness is the "The keystone."The Keystone is that the Foundation does not have "owners" like corporations.This is a big deal!Yes, you the founder of the Foundation do not show up in the paperwork, but only those beneficiaries (for example, your heirs) that you appoint.

And, as a super plus, which is a most interesting matter, the Foundation, in most countries, legally sidesteps reporting requirements.

Yes, even according to USA law, there are legal ways you can structure a Panamanian Foundation to lawfully avoid IRS reporting requirements.Why is this?It just so happens that US tax law doesn't specifically recognize Foundations; thereby it is quite flexible on this matter.Therefore, you, the Foundation creator, have a choice to declare or not to declare your Foundation. (NOTE:This decision to declare or not to declare a Foundation only applies to US taxpayers. Other nationalities have it much easier).

Moreover, the best way to keep your assets protected in a Panamanian Foundation is, believe it or not, by not using Panamanian banks.Therefore, the best thing to do is to move the Foundation's bank account outside of Panama , or even to another continent.This way you are protected not just by strict Panamanian secrecy and asset protection laws, but also by no one knowing where the Foundation's bank account is located.If no one knows no one can tell.

By executing this legal banking tactic, you can make sure that your Foundation is structured, in such a way, as to absolutely leave no record in Panama of what your assets are and where they are located.

In conclusion, an additional note is appropriate.Panamanian Private Interest Foundations can also be used for Estate and Inheritance Planning. And, they offer a way to segregate certain assets and avoid the need for probate on offshore holdings. In addition, they can be used inter vivos , replacing a living will.I ask you, is this an extraordinary legal animal?

By Jack Godwyn

Ref: REWRITE#5A Trust Vs. A Panama Fd.- What Is The Diff. Bet. Them?

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