Since 2006 the Republic of Panama has been experiencing a fast growth in different types of investments. Particularly, in the property market, this “Boom”, driven by the interaction of buyers and sellers in real estate transactions in Panama City, the beaches, islands and mountains has been an important engine for the economy.
Some of the main players of this boom are foreign citizens mainly from English speaking countries (US, Canada, UK, Australia, among others). This group consists mostly of retirees and investors either buying a second home or permanently relocating to Panama.
Nevertheless, like any legal, economic and migratory phenomenon, these foreign citizens are required to comply with locals the laws and regulations, and consequently estate planning within the Panamanian jurisdiction falls into these categories.
Wills in Panama can be common or special. The common Will is classified in open, close and holograph. The special Wills are classified in maritime, military and offshore. If a person needs to write his/her Will according to the Panamanian legislation, he/she must be more than twelve years old without distinction of sex, citizenship and must be in good mental health.
Open Wills are the most common category within the Panamanian jurisdiction. The document must be composed with the assistance of an attorney. Formalities required are that the Will be read before the Public Notary, three witnesses and the client. If the client agrees with his/her last will, as it is read before the Public Notary, he/she must sign it before said Notary, the same signature as in the passport, and have his/her right fingerprint stamped besides it. If the client cannot sign the document, one of the witnesses will sign on behalf of the client.
The final version of the will must be summarized in a public deed and the original will be recorded in the Public Notary office. The Notary will issue the client an authenticated copy of the will; that will serve as an original for most purposes.
Foreigners with a native language other than Spanish, must be assisted by an official translator who will translate the last will to their native tongue, and this translation will become part of the official document, registered in the public deed before the Public Notary. The Notary is civil and criminally liable if he/she does not comply with the formality of the translation of the testament.
The interested party (client) is completely free to declare and establish the terms and conditions of his/her testament and how assets, accounts, property, among other things, will be distributed in the event of his/her death.
Open Wills could be set up as a legacy, by which it donates particular and specific assets to a specific person; or could be universal, bequeathing all assets to a specific person or institution. The client is free to leave all assets or parts thereof to whomever they choose regardless of kinship, since Panamanian jurisdiction does not obligate citizens or foreigners to leave a specific part of his/her assets to certain members of his/her family (wife, children, others). The corporations and foundations have full capacity to receive all assets from estate, if the transferor has made such provisions in his/her last will or testament
The advantages of an open Will are multiple. It is done before a public authority in charge of the Public Faith. This Notary could issue many authenticated copies of the document with the same value of the original will/testament. This provides not only the interested party, but relatives as well, the advantage of multiple copies and knowledge of the content, which makes transition and paperwork easier for survivors, providing the client wishes to notify and afford them (relatives) with copies.
Other Panamanian legal structures are the Trust and Private Foundations, but these will be treated in another article.
If you have any questions or would like more advice regarding this matter, please contact Juan Francisco Pardini at firstname.lastname@example.orgTweet
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