The question is not “if” you need an estate plan upon moving to Panama.
You do.
And hopefully, you have put it in place before you need it! This is your contingency plan – it answers all the questions like:
- what if you get ill and can’t make decisions for yourself (this is particularly important if you are not married to your life partner or have no life partner in Panama);
- if you die, what will become of your assets;
- who will take care of your loved ones?
When you are planning your estate, consider these three aspects:
- What assets? Don’t forget to include:
- business interests
- intellectual-property
- car(s) or boat(s)
- properties
- bank or investment accounts
- insurance policies
- pensions
- furniture
- personal possessions
- Who will receive them?
- When will they receive the assets? This is particularly important if there are minors or you have concerns about a spendthrift.
But your estate plan should take care of more than just allocation of your assets should you pass away.
Why do you need an estate plan?
If you have recently moved to Panama, there are some differences that you should know. Only next of kin can give instructions at a hospital unless you have a living will that authorises another person to do so. So, for example, if you are in a gay or lesbian relationship, make sure that you have documentation in place because the hospitals will enforce their need for authorisation, rather than simply taking your word that you are life partners.
Some of the issues that your estate plan will take care of include:
- covering your care should you become disabled physically or mentally;
- appointment of a guardian (temporary or permanent) – in the case of minors or a disabled child;
- spendthrift clauses – if you have that heir that does not have clarity on how to manage their finances; and
- minimising taxes, court costs and unnecessary legal fees.
Understand that it’s not just for those entering into retirement, but also for the young. This is especially the case if you have children, covering who will care for them (financially and physically) should something happen to you.
Updating your estate plan when you relocate to Panama
Most well-advised clients will update their estate plan every three years, as well as any time that there is a major life event. Moving to Panama will typically be one of those life events.
What changed in your financial situation and your financial plan that might need to be updated?
- Perhaps you moved house, purchased a new property or simply liquidated and now have the funds in cash.
- You might have sold a business.
- Did you start making withdrawals from a pension plan, needing changes to be made to the designated beneficiaries?
- Or perhaps you changed your insurance coverage.
With any major life event, you need to consider whether not only your Last Will and Testament are up to date, but all relevant documents. These include your living will, your revocable power of attorney, and financial power of attorney. Some of those events include:
- marriage / divorce
- a birth or death in the family:
- spouse
- child or grandchild
- trustee or executor of your will or estate plan
- when a minor comes of age
- tax changes
- moved residence or made any major changes to the ownership of your properties
- if you receive a large inheritance or gift.
These are all reasons to call your estate planner and sit down to look over the documents that you have in place. If you have recently moved to Panama, then you definitely need to have a lawyer in Panama that is conversant with Panama’s laws and possibly international law as well.
Get the best advice you can afford when you don’t need it so that when trouble strikes, it costs you less!
Hardest questions to ask
Estate planning can be messy and difficult because it is not only intellectual but emotional. You have to answer questions about needs, wants & desires, as well as creatively coming up with the best solutions that take care of everyone.
Some of the quandaries you will face when you sit down to consider your estate plan are:
- If you have a trust – Who will be the trustee and/or the successor trustee?
- If you decide to use a Panama Private Interest Foundation – who will be the members of the Foundation Council or the Protector of the Foundation? How will their successors be appointed?
- Will you use any corporate entities – and if so, who will be the members of the Board of Directors? Who will you issue the shares of the company to? Will you have a right of survivorship to the shares or will they automatically form part of your estate?
- Who could you appoint as the executor of the will or as your personal representative? Do they live in Panama or will they need to travel to Panama and appoint a Panamanian lawyer to take care of this?
- What should you decide about medical decision-making and who should be the health-care agent?
- If you are disabled and someone needs to take over your finances, who will hold the financial power of attorney?
- Is a guardian required for any child, and if so, who will be willing to take over those responsibilities? Remember, the person that has the financial responsibility does not have to be the same person that takes over the care of a minor or a disabled child. Sometimes, the best solution is to separate these according to the strengths of the people involved.
Three questions to ask yourself today:
As you settle in Panama, consider at the very least these three questions:
When did I put together my estate plan?
When was the last time you sat down and looked at your estate plan with a professional? Do you know where your Last Will and Testament is? Can you say for sure that it is up to date?
Do you have a Last Will and Testament that covers your assets in Panama or have you used structuring to take care of these matters? If you have a trust or a foundation when did you last update the appointment of beneficiaries? Do those documents accurately reflect your current wishes?
Did you include a living will or financial power of attorney?
When you sat down and prepared your last will and testament, trust, or other estate documents, did you remember to take care of medical powers of attorney and a power of attorney for financial matters? Your healthcare directives are just as important as taking care that everything is covered should you pass away. In fact, these documents are possibly more important in Panama.
Finally, do my family members know where to find the documents they will need?
If something happened to you today, would your family members know where to find all the documents that they would need?
For example, if you had a medical emergency, could they find the living will or the healthcare directives that they would need for the hospital? Does your financial agent know where to find the financial power of attorney, so that they can manage your funds and finances?
If you passed away, does the executor of your will know where to find all the documentation that they will need in order to identify all of your assets, prepare the inventory and then the distributions?
It is essential to have your estate plan up to date and that your family members have a clear knowledge of how they are meant to proceed in the case of any emergency.
For assistance in preparing any of the documents mentioned in this post, please contact our law office.
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