After 10+ years in the industry, doing business in too many countries to count, and having analyzed and written about every asset protection tool ever created, I say with certainty: The Best Offshore Asset Protection structure is the Panama Foundation.
In fact, when it comes to the best offshore asset protection system, I will put my Panama Foundation models up against ANY offshore Trust, Corporation or series LLC out there, regardless of the cost. Did you go to a big U.S. lawyer and pay $35K for an amazingly complex structure? I can probe a Panama Foundation combined with a Panama Corporation, for $6,500 provides the same or better protection, with the same estate planning benefits as the most expensive offshore trust.
First, let me tell you a bit about me. My name is Christian Reeves and I am the publisher of www.PremierOffshore.com. After working as a U.S. tax attorney for over a decade, I founded Premier to help people create offshore companies, offshore asset protection systems and take their U.S. retirement accounts offshore. Most importantly, we provide systems that comply with U.S. asset protection and tax laws. As far as I know Premier is the only firm providing both formation and tax compliance.
You will find that my structures are priced in the middle of the market. We are much more efficient than most U.S. law firms, but more expensive than the offshore incorporation mills. If you are looking for the best offshore asset protection at a fair price, with tax and business consulting services included, we are your firm. If you want the cheapest structure available, IRS be damned, we aren’t for you. . .contact someone in Nevis.
After battling with the IRS for many years as an attorney, and seeing many people get crushed by the U.S. government for improperly structured and reported offshore companies, I founded Premier for those who want to things the right way. In my experience, the vast majority of people who have had trouble with the IRS were in that position because they were misled by an incorporation mill and had no idea what they were getting into. Had they been advised of the risks, they would have filed their forms and kept up well away from the U.S. government.
It’s from this perspective that I tell you with certainty that the Panama Foundation provides the best offshore asset protection available. So long as it’s structured properly and you file your IRS forms on time, the Panama Foundation is the most secure, private, flexible and cost effective offshore asset protection structure for U.S. persons.
Features of the Panama Foundation – the Best Offshore Asset Protection structure available.
The most basic components of any offshore asset protection plan is to get your 1. assets out of the United States, 2. away from future creditors, and 3. out of the purview of judges who have a strong preference for creditors or “injured” parties over you, the Defendant.
Items 1 and 2 above can be accomplished by forming an offshore LLC corporation in any jurisdiction, such as Belize, Nevis, or Panama, that won’t tax your investments and has solid asset protection laws. Such a structure, along with an offshore bank account, is often the first flag planted by Americans looking to live, work or invest offshore.
The Panama Foundation is the best offshore asset protection tool because it accomplishes all three goals, including getting your assets out of U.S. courts. It does this by allowing you to transfer ownership of the assets to the Foundation and making your heirs the owners of that Panama Foundation.
See, with a simple offshore LLC or corporation, you transfer assets to the entity, but you remain as the owner of shares of that structure. A judge might attack that by requiring you to transfer ownership of the company to your creditors.
With a Panama Foundation, you transfer ownership of the assets to the Foundation and the beneficial owner of the structure is your heirs (and/or charity). Therefore, you have given up all ownership and can’t be forced to transfer ownership of any pat of the entity to a creditor.
- Tax Note: You have transferred ownership for asset protection purposes. In most cases, you remain the beneficial owner for U.S. tax purposes and must pay tax on any gains earned by the Panama Foundation.
- Legal Tip: This article does not consider any issues resulting from a fraudulent conveyance. This is when you transfer assets out of the U.S. to defeat an existing or reasonably anticipated creditor. Please see www.PremierOffshore.com for more detailed information.
Another characteristic which makes the Panama Foundation the best offshore asset protection tool is that you can maintain as much or as little control over the assets as you like – or as much as your risks of litigation dictate. You might choose to act as the manager and sign on the bank accounts unless or until you cone under attack. You can also implement a Foundation Counsel, much like a Board of Directors, in which you have only 1 of 3 votes (for example). If your risks of litigation are significant, or you don’t want to manage the assets, for another reason, you can give up all appearances of control by assigning an independent asset manager.
Because a Panama Foundation is a hybrid structure, in between a Trust and a Corporation or LLC, it offers this flexibility. And it’s this flexibility that allows you to maintain control when the waters are calm and to give it up if it becomes prudent to do so.
Another reason I believe the Panama Foundation is the best offshore asset protection structure is that includes an estate-planning component. Should you pass away, the Foundation counsel can act as your trustees and distribute the assets per your instructions.
If you die holding an offshore LLC or Corporation, the company becomes a part of your U.S. estate and could get caught up in probate. If your assets are in a Panama Foundation, they should be outside of your U.S. estate and will be distributed as instructed in your letter of wishes. Also, this can provide an estate tax benefit to those with $5M or more left in the U.S.
- Letter of Wishes: A private document lodged with the Panama Foundation council that instructs them on how to distribute your assets. It can be updated as often as you like at little or no cost and is thus much more efficient than modifying an offshore trust.
This model also makes it easier for your heirs to take over bank and brokerage accounts when the time comes. . . especially if those accounts are in Panama. Of course you can choose to limit their access until they reach a certain age (say, maturity) or add in other components to protect your offshore estate assets. But, my point here is that you can make the transfer a efficient as you see fit.
A Panama Foundation ensures your assets are dealt with in Panama, and not the United States. This may appeal to someone who wishes to diversify their holdings and to those who want to prevent a battle in the U.S. For example, if you have a child from a previous marriage, and a concern that they won’t be treated as family as you feel appropriate, you might place only their portion of your estate in Panama with his or her as the beneficiary of the Foundation.
Next, I believe the Panama Foundation is the best offshore asset protection structure because it can be added to and redesigned over time. For example, if you want to hold an active business in your Panama Foundation, form a Panama Corporation under the Foundation. Want to open an account in Belize, you can add a Belize LLC or open an account directly in the name of the Panama Foundation. Want to segment your investments by type or heir? No problem, just add a Panama Corporation for each.
Finally, you will find the Panama Foundation, when combined with a Panama Corporation, opens a lot of doors at world banks that are closed to other structures. Obviously, it’s the preferred structure with Panamanian banks, which is a big deal. However, Panama is a preferred structure in other major financial centers like the Cayman Islands. You will have a much easier time opening bank and brokerage accounts around the world with a Panama Foundation compared to a corporation from Nevis.
I hope you have found this article helpful. If you feel I’ve proven the case that the Panama Foundation is the best offshore asset protection tool, and would like to discuss it in more detail, please send me an email to info@premieroffshore.com. All consultations are free and confidential.
If you are living, working and/or investing offshore, you might check out my free email newsletter. Go to www.premieroffshore.com for more information.