The trust is a financial and legal tool that allows to protect, manage and transfer assets in a safe and efficient manner. In Panama, trusts are used for multiple purposes, from estate planning to structuring investments and project financing.
In this article, we will explore what a trust is, how it works and how it can help you achieve your financial and business goals.
What is a trust? 🏦
A trust is a contract whereby a person or company (settlor) transfers ownership of certain property or assets to a third party (trustee), who manages them for the benefit of one or more persons (beneficiaries).
This contract is governed by Law No. 1 of 1984 in Panama and is a safe option for asset management, since the assets of the trust are separated from the assets of the settlor and the trustee, offering greater protection and transparency.
How does a trust work? ⚙️
The trust process involves three key parties:
1. Settlor: The person or company that transfers the assets to the trust.
Trustee: A legally authorized entity (bank, trust company or financial institution) that administers the assets in accordance with the instructions set forth in the contract.
3. Beneficiary(ies): The person or entity that receives the benefits of the trust, according to the conditions stipulated in the contract.
The trust may be established for a specific period of time or until certain conditions are met, depending on the purpose for which it was created.
1. Estate planning trust 🏠💼
Ideal for protecting and managing personal or family assets. Benefits:
✅ Avoids disputes between heirs.
✅ Facilitates estate succession without the need for legal proceedings.
✅ Protects assets from seizures or legal claims.
2. Investment trust📈
Used by companies and individuals to manage investments safely. Benefits:
✅ Allows diversification of assets and risk management.
✅ Provides confidence to investors and business partners.
✅ Facilitates the structuring of large-scale projects.
3. Real estate trust 🏗️
Commonly used in the real estate sector for the construction and sale of real estate projects. Benefits:
✅ Ensures that funds are used correctly.
✅ Protects the interests of buyers and developers.
✅ Optimizes the administration of real estate assets.
4. Trust of garantía🛡️
Used as backing in financial transactions or loans. Benefits:
✅ Reduces risk for creditors and debtors.
✅ Allows access to better financing conditions.
✅ Guarantees compliance with contractual obligations.
How can a trust help you?
✅ Asset protection: Assets within a trust cannot be seized or used to pay personal debts.
✅ Efficient planning: Avoid probate problems and ensure that assets are managed according to your wishes.
✅ Tax optimization: Depending on the type of trust, it can generate tax benefits and better financial planning.
✅ Transparency and security: Provides a clear legal framework for asset management, which gives confidence to investors, partners and family members.
Conclusion
The trust is a powerful tool for wealth, business and financial management. Whether to protect your assets, optimize investments or structure large-scale projects, this legal figure can offer you security and peace of mind.
If you are considering establishing a trust and need specialized advice, JVD Consultores can help you design the best strategy according to your needs. Contact us and protect your financial future today!
