Panama Private Foundations for Real Estate Inheritance

Why is it convenience to transfer your properties under the name of a Panama Private Foundation if you are a retiree or a non-resident?

Individuals from around the world travel to Panama with the intention of invest in properties for retirement, investment, resale, or simply to gain rental income. The real estate market in Panama is highly attractive for all these real estate operations, and many investors choose to register their properties “directly in their own name.” While it is common in Latin America to have one’s name on the “documents” of the properties, this can pose a significant challenge if you are a “foreigner living in Panama” or if you “own property but live outside the country.”

In the event of an unexpected circumstance, such as your passing, this situation could create considerable difficulties for your family and heirs in the future. Let me explain…! In the event of your death, if you are a foreigner owning an apartment, lot, estate, or house in Panama, your family members will need to file a “Testamentary Process within the Panamanian Courts” to inherit your properties. While this may seem like a standard legal procedure, similar to what you might expect in your home country, the associated costs in Panama can be substantial. Additionally, such court processes in Panama could take years. In Panama, legal fees, judicial expenses, and other costs related to a testamentary process can range between “10% and 15%” of the total registered value of the properties to be inherited.

For instance, if you own a property in Panama worth $300,000, your family could incur approximately $30,000 in costs to transfer the properties into their names. This represents a significant financial burden. A prudent way to mitigate these future expenses to your family or heirs is to establish a Private Foundation before purchasing any real estate in Panama.

The reason is that Panama Foundations offer a “triple benefit”: 1. Privacy (Depending on the foundation’s structure, it can provide privacy). 2. Protection (Properties held under the foundation’s name are legally protected from seizure). 3. Private Testamentary Plan (Your beneficiaries will receive the properties directly without the need for court processes and without incurring high costs) It is also important to consider, that by transferring your properties to the foundation´s name, you will “retain control” over all your assets as the Founder “throughout your lifetime” as the “Founder”. Moreover, in the event of an unforeseen circumstance, your family will receive the properties in Panama efficiently and without significant expenses. We are here to assist you with the formation of Private Foundations in Panama, as well as to support you with any the local real estate operation. Please do not hesitate to contact us: —- PGS Attorneys Asset Protection & Immigration Advisers Panama City, Panama