One of the main elements of using a Panama foundation is protecting assets against legal liens. Besides, a foundation can create a private inheritance system for your beneficiaries, with no need for courts or lawyers to transfer patrimony and can be structured as confidential as you deem necessary. In this sense, a Panamanian foundation provides a triple benefit simultaneously: 1) An asset protection plan, 2) A private testamentary estate plan, and 3) Confidentiality.
In simple terms, a private foundation is like your "own trust," but the difference is that you do not need to hire a trustee's services to manage your estate or money on your behalf or pay their fees to invest it. You control the foundation on your own 100%.
To fully understand this unique tool, you need to be clear on who its members are, what assets can be transferred, and what documents make it up?
The Founder: The Founder is like the settlor for trust in the foundation. The client can be the Founder or maintain his/her total privacy by appointing a nominal entity in this position. It could be one natural o several natural persons or one legal entity.
The Council: It is a sort of "board of directors" of the foundation and usually needs three natural persons: a president, a secretary, and a treasurer. But the law allows appointing a single legal person as a council. A unique feature of the council appointment is that the Founder can simultaneously be both a board member and a founder.
Beneficiaries: The beneficiaries are those who receive the distribution of the assets of the foundation. Among the beneficiaries may also be the Founder, according to Panamanian law.
The Protector: This member is like an executor in a will and would then be the person in charge of executing the foundation's instructions established in the Founder's foundation regulations (By-Laws).