You have decided to retire and re-locate to Panama, and are currently living your dream of a life in the tropics. You have purchased or built your dream home here. But you have in place a valid Will or other Estate Planning instrument from your country of origin, so why would you need to consider doing estate planning in Panama?
Among the most important reasons for doing Estate Planning in Panama are:
- Avoid Costly Court Proceedings. Dying intestate can be costly for your loved ones. There is no Inheritance Tax in Panama, however, an intestate court proceeding can be lengthy. In the meantime, the family may not have proper access to the assets. Liabilities can accumulate. Not to mention that if there is any dispute within the family, the process may take much longer. All this without mentioning the substantial attorneys’ fees for a lengthy court process.
- Planning for Incapacity. In the event you became mentally or physically incapacitated, due to illness or accident, and as a consequence you were unable to handle your financial affairs, a properly drafted and executed Durable Power of Attorney could make things much easier.
- Provide for special circumstances. Spendthrift provisions, beneficiaries of minor age, incapacitated or handicapped persons, children from multiple marriages, persons with a drug addiction or other behavioral problem. These are only a few situations that may be cared for with a well designed Estate Plan.
- Asset Protection. Life is full of risks, and civil liability is one of them. You do not want the family home or any other family assets to be subject to seizures or attachments for business-related liabilities, for example. Asset protection is important and many people start an Estate Plan for asset protection as the main goal.
Remember, for as much as you may have a well-constructed Estate Plan in your home country, if you have assets in Panama, you need to re-evaluate your situation. Your Estate Plan may need to be updated to cover any assets held in Panama.