Losing a loved one is always challenging, and dealing with their estate can add a layer of stress, especially if their assets were not well-organized. Understanding the legal, financial, and administrative aspects of inheritance law in Panama can help you make informed decisions and protect your family, assets, and investments.
Case Study 1: The Unexpected Delay
Meet Michael Bauer, who moved from Canada to Chiriqui with his wife Carola three years ago. After a sudden health crisis, Michael asks his lawyer to prepare documents to transfer his share of their family home in Boquete to Carola. Despite his intentions, Michael never created a foundation for his family's assets, believing it was an unnecessary expense.
Michael’s passing left Carola with a will, naming her as the sole heir, but transferring the car and house took two long years. Why? In Panama, even with a will, assets must go through probate. This legal process involves hiring a lawyer and filing a probate lawsuit, which can be lengthy and costly. Carola faced significant delays and expenses, highlighting the importance of being prepared.
Case Study 2: The Advantage of a Foundation
Now consider Max Mueller, a part-time resident of Panama who owned land in Las Lajas through a foundation. Despite his declining health, Max had prepared his estate meticulously. He had set up a Panama Foundation and named his son Robert as the beneficiary and protector of the foundation.
When Max passed away, Robert quickly handled the estate. Since the foundation is a separate legal entity with perpetual duration, there were no lengthy probate procedures. Robert accessed the funds and sold the land efficiently, thanks to Max’s proactive estate planning.
Why You Need an Estate Plan
A Panama Foundation is a powerful tool for managing your estate. Unlike personal assets, a foundation’s assets are separate and can be managed according to its private by-laws, which govern the distribution and administration of assets.
Establishing a Panama Foundation does not require Panama residency, and thanks to advancements in technology, setting up a foundation can now be done remotely, making the process faster and more convenient.
Be Prepared and Make Informed Decisions
Carola's situation was challenging due to the delays and complexities of the probate process. In contrast, Robert’s experience was smooth because Max had taken the time to set up a solid estate plan. A well-structured estate plan, like a Panama Foundation, can save you and your loved ones from unnecessary stress and complications.
For more information on how to protect your assets and ensure a smooth transition for your heirs, contact us today. Your knowledge and preparation can make all the difference.