the likely income return

FAMILY TRUST - PANAMA LEGAL CENTER

therefore be kept condential. Privacy; Panama has a secrecy & privacy law that prohibits disclosure of any information to third parties. Estate planning; Panama family trust is the best vehicle for estate planning & strategy. Fast set Up; Panama trust can be set up and registered in less than a week. Low Maintenance; Panama trust does not pay any taxes and the only fee that is collected from a Panama trust, is a yearly low at franchise tax. Low Set up cost; A panama trust initial cost is less than $5,000.

Family Trust Services We Provide

At, panamalegalcenter, we perform the followings;

• meeting with you to discuss your intentions and requirements;

• preparing a trust deed to match your particular situation;

• preparing a memorandum of wishes;

• preparing new wills and enduring powers of attorney;

• discussing asset transfer options with you;

• completing the transfer of your assets to your family trust;

• if required, arranging for the restructure of your nancial arrangements (such as the lending secured over any property to be transferred to the trust).

In addition we advise you of ongoing costs depending on the nature of your trust and its assets, legal and accounting work required to administer your trust.

How Panama Trust Works?

With the most favorable legal framework for foreigners who wish to invest in Panama, the Panama trusts has become the best place to set up family trusts for foreignors. It makes one hundred percent sense to create a trust fund in Panama because Panama provides; Ironclad asset protection, privacy, condentiality and tax exemptions to name a few.

The Panama legal entity known as Trust is regulated by Law No. 1 established in 1984. Under this legislation, a trust is a legal act whereby a settlor transfers property to a trustee for its administration according to the received instructions. It is necessary to draft a Trust Agreement, ie, the legal document that establishes the instructions and forms of administration of the assets. These assets, while being under the name of the trustee, are not part of their personal wealth and may not be seized or garnished to meet the demands made to the beneciary in the country of ori in Panama jurisdiction where this trust was established, the owner is the trustee.

Under this legal act assets of any kind can be transferred such as; real estate properties, cash, bank accounts, stocks, bonds, warrants, vehicles, etc. Moreover, these trusts o condentiality as they are created in a private document without requiring registration in a Public Registry. In other words Panama oers secrecy to its clients and the only requ is the presence of a Panamanian notary public to authenticate the signature of the founder and administrator, pledging to ensure the condentiality of the transaction.

However, condentiality and asset protection are not the only reasons why Panama trusts are established in Panama as the ideal place. Other advantages such as vast tax ex makes Panama the most ideal country to set up a family trust. Based on our experience, no other country or territories oer such benets to foreign investors. For tax ex reasons, Panama is called a “TAX HAVEN” jurisdiction by all experts.

In addition, Panama is an independent sovereign country in Latin America that its political system is democratic and Panamaninas elect their president every 5 years to serve Pan only one term. Panama’s currency is U.S. dollar and would not uctuate. In addition to the above, Panama banks are very secure and safe.

How To Administer A Family Trust?

Administering a family trust is very important to make sure all objectives of the grantor is met for the benet of its beneciaries. Your trust achieves its objectives by separating ow of your family’s assets from you personally. If the trust is not administered properly to make this separation of ownership clear then the trust could be challenged as a sham. G and/or the trustees could face claims for breaching their duties as trustees. Such challenges could be made by a business creditor, relationship partner, the IRS, etc. If a cha successful then the trust assets could be treated as your own personal assets and the benets available through the trust structure will be lost. General administrative requ When establishing your family trust, your panamalegalcenter will discuss with you the requirements for administering your trust properly. They will also be able to assist with the administrative requirements for the trust if required. In general, trustees of a family trust should:

• meet on a regular basis, at least annually, to review the trust investments and the needs of the beneciaries;

• be involved in all trust decisions and record their decisions in writing;

• ensure that they comply with the legal obligations imposed on trustees; and

• ensure that the trust meets its income tax, if any. All trustees are expected to exercise a reasonable level of responsibility and prudence in carrying out their responsibilities. The Act therefore provides a useful guideline for any trustee making decisions.

As a general guideline, trustees should consider the following matters:

1. the desirability of diversifying trust investments;

2. the nature of existing trust investments and other trust property;

3. the need to preserve the real value of the capital or income of the trust; 4. the risk of capital loss or depreciation;

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9. the marketability of the proposed investment during, and on the determination of, the term of the proposed investment;

10. the aggregate value of the trust assets;

11. the eect of the proposed investment in relation to the tax liability of the trust; and

12. the likelihood of ination aecting the value of the proposed investment or other trust property.

Although not all of these matters will necessarily be relevant in all circumstances, they do provide a useful general guideline for any trustee making an investment decision. A trustee who merely rubber stamps the decisions of co‑trustees could be exposed to claims by beneciaries for losses incurred by the trust.

What Are Trustees Liabilities?

Trustees are personally liable for all debts incurred by the trust including tax liabilities. Where loans are arranged from banks or similar lending institutions, it is customary for th of independent trustees to be specically excluded. It is also quite reasonable for independent trustees to request a settlor to personally indemnify them for any losses they in result of their trusteeship.

What Is Tax Obligation Of A Family Trust?

Tax obligations would vary between trusts and, where the trust is established. Generally speaking, trustees should take accounting advice to ensure that they comply with the taxation obligations. One issue which is often overlooked is the need for trustees to resolve how any income earned by the trust will be treated. The trust income can be:

• distributed to, or applied for the future benet of, all or some of the beneciaries and taxed at their tax rate (there are some limitations for distributions to children aged under 1

• treated as trust income and taxed at the trustee rate (currently 33%); or

• divided using a mixture of these two options. If a resolution is not passed within an appropriate time frame, the income will be treated as trust income and taxed at the coun rate. This could mean that potential tax savings are lost.

How Long Can Family Trust Last?

In a typical “avoid probate” revocable living trust which is set up by a married couple with responsible, mature adult children, the trust will last until both spouses pass away. At t the Successor Trustee will terminate the trust and disburse the assets in the trust to the beneciaries. However, in many circumstances, a trust will continue after both spou away.

1 . A trust can continue if a child or children are minors. 2. If children are adults but are not mature or responsible to handle a large sum of money at once, the trust can continue. 3. Many choose to extend the term of a trust to provide divorce protection for the children. 4. Oftentimes, a trust can continue if the benet is for young grandchildren. 5. Individuals with a special needs child that is receiving government benets may choose to extend the term of a trust to protect the government benets. 6. A trust can continue if there is property in the family that the couple wants to keep in the family.

There are many ways to set up a trust term. It can last for a lifetime or continue for many years. It is important to customize a trust according to your wishes.

Dynasty trusts can, in theory, last forever. Assets in dynasty trusts can grow and be protected from your descendants’ creditors, former spouses, and their own wasteful habits. trusts can also avoid estate taxes (https://www.nolo.com/legal-encyclopedia/estate-tax), saving large sums of money over the years.

The Panama law permits trusts to operate for unlimited periods until you decide to dissolve the trust. Placing your assets into a properly constructed OFFSHORE puts multiple protection between your assets and potential creditors. You can achieve even higher protection by combining an OFFSHORE trust held with an oshore LLC.

How Can You Access Trust Income?

Distribution of trust income is totally at the discretion of the trustees. They may do any of the following:

• accumulate and retain all or any part of the trust’s income within the trust; • make distributions of income to any one or more of the beneciaries in any proportions; or

• credit income to the current account of any beneciary with the trust (the income will then be taxed as beneciaries’ income and will be payable to the beneciary on demand).

How Can You Access Trust Capital?

Before the trust is wound up any distribution of capital is usually at the discretion of the trustees. Capital can usually be paid to any one or more of the discretionary beneciarie are a beneciary of the trust you can therefore receive distributions of capital if the trustees decide to make such a payment. Alternatively, if you are owed money by the trust, you able to access the trust capital by demanding repayment of all or part of the outstanding loan (subject to the terms of the loan agreement). Can you use a house owned by yo trust? If your family trust owns a house then the trust can make the house available to you and your family to live in, provided that you are beneciaries of the trust. The trust cou you to live in the house on the basis that you pay the rates, insurance premiums and other day-to-day outgoings in lieu of rent, or the trust could pay those expenses of the trustees should be recorded in writing and should be reviewed regularly as part of the trustees’ regular review of the trust’s investment policy. CONSULTATION itself. This

Can A Trust Carry On Business And Invest? Most trusts eectively give the trustees an unrestricted power to act as if the trust were a natural person, with no limitation on what the trustees can or cannot CHAT! FREE do. Trusts can t conduct a business in the same way as a natural person. However, some care needs to be taken where a trust is conducting a business as particular legal, taxation and risk man issues can arise. Your panamalegalcenter advisor can discuss these with you in case you intend to use your trust to operate a business.

• that the decisions of the trustees will be unanimous; or

• that a decision of a majority of the trustees will be binding.

If the trust deed does not make either provision, the trustees’ decisions must be unanimous. Most trust deeds also provide that trustees’ decisions must be made or ratied in wri

Eect Of Relationship Property On A Family Trust?

If you are currently living in a married, de facto or civil union relationship then it is likely that all or a signicant part of your assets will be relationship property. If you and your separate at any point in the future that relationship property must, except in certain limited circumstances, be divided equally between both of you. However, assets held by a trust assets, not your personal assets, and as a result are not subject to this relationship property division. Transferring family assets to a family trust can therefore have a si impact on your relationship property rights. Your panamalegalcenter advisor will discuss these issues with you when you transfer family assets to a family trust.

Family Trust Experts

If you have any questions or would like to begin the process of establishing a family trust to protect your family, please contact your panamalegalcenter advisor.

FAMILY TRUST

Q & A

Who is a beneciary? A trust beneciary is a person, company or other entity who can receive benets from a trust. What is a distribution? A distribution is a payment from a trust to a beneciary. What is a power of attorney? Under an enduring power of attorney document, you appoint another person to act on your behalf if you are out of the country or become mentally incapable. This power can apply to your personal property, your personal care and welfare or to both areas. You make a gift when you transfe personal asset to another entity and receive nothing (or less than market value) in return. You can make gifts to a trust by either directly transferring assets, or forgiving all or part of a debt the trust owes to you. What is an independent trustee? An independent trustee is a trustee who is not a beneciary. What is a memorandum of wishes? A memorandum of wishes is a written summary of your goals and objectives for your family trust. It is not legally binding on trustees. What is a settlor? A settlor is a person who creates a trust by transferring assets to trustees subject to the provisions of a trust deed they have prepared. What is a sham trust? A sham trust arises where a trust deed has been signed and assets have supposedly been transferred to the new trust but the settlor and trustees did not intend to create a real trust. What is a trust deed? A trust deed is the set of rules for the operation of a trust. What are the duties of a trustee? A trustee is a person appointed by a settlor to hold legal title to trust assets for the benet of some beneciaries. A trustee has control of the trust assets. What is a trust income? Trust income is the money a trust makes from the investment of its capital. It can include interest, rent and share dividends. What is trust capital? Trust capital comprises the assets of the trust and can include real estate, bank accounts, cash, bonds, term deposits and share investmen What is a will? A will is a legal document which species how you want your personal assets to be administered and distributed after your death.

Summary Pros Of Panama Family Trust

Eliminating Litigation exposures The United States generally is more litigation prone and creditor friendly than some other jurisdictions. Moving your assets out of the US into a suitable jurisdic reduces your exposure. Of course, this only applies to future creditors. International trusts cannot be used to escape current creditors. Ironclad Asset protection ( Protects you of US laws ) Only a few jurisdictions worldwide oer international trust laws that protect assets of individuals and businesses from civil creditors. Cook Islands, the Isle of M Nevis and Belize are countries that oer a high level of asset protection and are politically stable. 100 Percent Legal and legitimate An oshore trust does not “hide” any assets, rather it protects the assets. Panama family trust creates barriers to protect assets from creditors. Panama oshor is one important vehicle that provides the best asset protection, estate planning strategy and eliminating tax exposures.

CONTACT INFORMATION: Panamalegalcenter main oce located in Panama City, Republic of Panama. Telephone: (507 ) 6231-8616, Website: www.panamalegalcen (https://www.panamalegalcenter.com), Email: info@panamalegalcenter.com (mailto:info@panamalegalcenter.com) Copyright © 20015. All rights reserved. Panamaleg Disclaimer: The information contained here is of a general nature and should be used as a guide only. We recommend that before acting on it, you should cons panamalegalcenter advisor.

CONSULTATION

In order to set up your private family trust in Panama, complete the following questionnaires and Email it to us at: info@panamalegalcenter.com CHAT! FREE FAMILY TRUST APPLICATION