Estate planning: Asking the right questions

Estate planning: Asking the right questions

Estate Planning

If you have relocated to Panama, or you are thinking of retiring to Panama, then you should consider estate planning in Panama.  As an estate planner, I look at how you anticipate, during your life, to manage and dispose of your estate during and after death.  We consider issues of estate tax, gift tax, and income tax for the beneficiaries, as well as the costs of the transfer of the estate to the next generation. Asking the right questions is essential to make sure the estate plan works for you.

Wealth management

Accumulating wealth is a great accomplishment that requires skill and determination. It also requires a uniquely developed plan for your personal circumstances or that of your business.  Part of our job is to outline how our clients assets should be managed and preserved throughout their life and then distributed afterward to the people or causes they love.

During your lifetime, needs and goals will change. There will be the time for saving and investment, portfolio growth, business growth and investment, and then there are considerations of retirement.  During these different stages, priorities in the estate plan may change. Family situations may change. Estate plans should be updated.

The assets and their liquidity will change during these years. For some clients, business succession will need to be considered or having a golden parachute with which to leave the company.  Exit strategies need to be considered.  One of the most difficult parts of estate planning is family businesses and organising an orderly succession and transfer to the next generation.

Your plan

One part of estate planning may include a Last Will and Testament, for assets held in your personal name. Another option is to structure the assets in entities (corporation, trust or foundation), so that probate can be avoided and the transfer can happen quickly. The estate plan should also consider issues of a Living Will (for taking medical decisions and possible mental disability).  You will want to consider issues of guardianship or conservatorship.

To be effective, you need to be open with the estate planner about all the details of your life that need to be cared for.

Wills or  Intestate probate

Part of this estate planning process may include writing up a Will (Last Will & Testament). A will will cover assets held in your personal name (real estate, investment accounts, bank accounts, cars, etc.).

Types of Wills

There are a number of different types of wills that are acceptable in Panama, including these:

  1. Holographic will: the testator hand-writes their will on simple paper. They also date the will and sign it at the end (signing each page if it is more than one page long). This Will may, or may not, be inside a sealed envelope or not and is not normally witnessed. In order to be valid, this will must be presented for probate within five years of the death of the testator.
  2. Open will: A lawyer typically prepares this will, as a Public deed.  It is written before a Public Notary and three witnesses. The Notary will then  read the Will aloud before the witnesses, and the Testator confirms that the will fulfills their wishes.  The original Will is kept at the Public Notary archives, a copy is handed to the person making the will.
  3. Closed will: like the above, this will is written on special stamped Notarial paper. The Testator signs each page and at the end. The notary and three witnesses simply witness that the Testator expressed that they are issuing a closed will. They do not read the contents thereof.  The Notary then seals the will in an envelope with a deed that confirms this was done, signed by the Notary and three witnesses. The testator takes custody of their envelope. The contents of the document will only be known by the person who wrote the will. Once the person dies, the will is opened by the judge in charge of the probate proceedings.
  4. Immanent death: Known as an oral will, this is valid if the person is in risk of imminent death. In this case, the person expresses his/her last will before five witnesses, and this type of will is valid where the decedent dies within two months after so doing.


Nevertheless, in Panama the probate process (either testate or intestate) will require a lawyer (not simply an executor) and will go through the court system. Lawyers in Panama charge for the probate process based on the value of the assets in the estate. Their fees usually run between 10-40% of the value of the assets.  While the fees established for the process run from ten to fifteen percent, these are the minimum fees charged. Clients often find that local lawyers are charging substantially more than this percentage for the probate process, so we attempt to use structuring to avoid the process.

Estate planning options

Nevertheless, you may prefer to structure your estates so as to avoid probate and the process above.  Instead of holding property and investments in your personal name, you could own property through a corporation, Private interest foundation or a trust.  These offer the benefit that assets do not have to be “transferred” to the beneficiaries by the court. They are managed and disbursed by the Board of Directors, Trustee or Foundation Council.  Nonetheless, there may still be costs involved (such as real estate commissions on the sale of the house or property transfer taxes to the buyer). There are also annual costs associated with the entity (management, government fees).

We understand that your estate is more than simply your wealth or money. It is somehow a reflection of a life well lived.  More than anything, it gives you the opportunities to live in retirement the way you envisioned living.  You can provide for your family or contribute to charities or causes that are meaningful to you. Once you have achieved your financial goals, you want the freedom to choose how you will spend your life and make use of your resources, knowing that you have taken care of all the details.

We know that this process should be all-encompassing, and are experienced in asking the right questions to help you move through this process. We want to ensure that your estate plan is personalised to your particular goals.

Contact us for more information regarding how we can help you with your estate plan.


Onsite inspections: Anti-Money Laundering Solution and Anti-Terrorism enforcement

Onsite inspections: Anti-Money Laundering Solution and Anti-Terrorism enforcement

AML rules & enforcement

In July 2017 the Indendance for the Supervision & Regulation of Non-Financial Persons adopted resolution JD-REG-001-17. This resolution sets the procedures for onsite inspections, reviewing procedures and documentation for compliance with Law 23 (2015).


As explained in a previous post, Law 23 set up the Intendance and regulated the types of businesses and professionals supervised by the Intendance. This included companies in the Free Trade Zones and Panama Pacífico. Likewise, it included real estate developers, realtors, lawyers & accountants.  In particular, Law23 adopts measures to prevent money laundering and financing of terrorism. Article 13 of the Law charges the Intendance with supervising and regulating “non financial persons”.

Artice 13 of Executive Decree 361 (2015), adopted following Law 23 (2015), establishes that as part of supervising, the Intendance will carry out onsite inspections of these non financial persons.  It also provides for off site inspections, where there is simply delivery of documentation and reports to the Intendance’s office.  The intendance requires access to relevant and pertinent information in order to measure the effectiveness of the controls put in place. This is particularly important in higher risk business models, to ensure compliance.  With this in mind, the Intendance established in JD-REG-001-17 the guidelines for requesting information or documents as part of inspections.

Onsite Inspections

In order to undertaken an inspection, whether onsite or offsite, the Intendance must notify in writing. The time frame for the inspection, the scope and the documentation or information being requested are required in the letter. It must also indicate the format to be used (if applicable).

The person or entity under inspection must deliver the information or documentation by the dates required, in the requested format. Originals, copies, electronic format or any other means of delivery must allow the intendance to get a clear and real view of the situation the transactions being supervised.  The intendance may request documents be translated to Spanish.

Late & incomplete compliance

Compliance which is provided late or not at all will be considered to have failed to comply.  If the information or documentation requrest is incomplete, illegible or in a format different to the one requested, sanctions may also apply.

Costs of inspection

At this time, we have no idea of what the actual cost of inspections will be, although it is understood that the Intendance (similar to the Banking Superintendent) charges the entities that are under supervision for doing onsite inspections. They are charged for the manpower required to be in their offices for the time spent there. Other indirect costs are space, internet & phone connections that must be provided, and the staff that need to be assigned to assist and provide the inhouse documentation that is being inspected and reviewed.

Our firm is able to assist with compliance manuals, preparation of policies and procedures and preparation for such inspections.



Personal bank account in Panama: opening requirements

Personal bank account in Panama: opening requirements

While you don’t need a personal bank account in Panama to live here, it may lower transaction prices and make paying bills easier.

Reasons to set up a personal bank account

Many expats have differing views on whether or not you need to open a personal bank account. If you have an account in USD, it may make little difference in the bank charges. In other currencies, the bank charges could be high and might be reason enough to set up your account here.

Another reason for setting up a personal bank account in Panama is to apply for the friendly nations visa. One requirement is that you have a personal account with no less than a mid-four figure balance. You should deposit at least USD$5,000 in the account, then.  The friendly nations visa will provide you with permanent residency, It also provides a work permit (depending on which application you make). And it allows you to eventually naturalize as a Panamanian (if having a second passport is your goal).

Paying bills online: many of the banks will allow you to pay bills online, although this is not for all utilities companies. Some still requirement payment at their office or through an approved intermediary. You can also pay your personal taxes online through some banks (such as income tax or property taxes).

Requirements: personal bank account

The requirements vary slightly from bank to bank. Nonetheless, the general requirements are the same:

  • Complete the bank account application forms, all of them
  • Your passport (the bank will make its own copy)
  • 2nd ID – such as driver’s license
  • Professional reference letter – such as from a lawyer / accountant / company you have done work with
  • Banking reference – they are looking for proof of a banking relationship of more than 2-3 years
    • If you don’t have a “bank account” but have a credit union account, this will usually work
    • They may accept an investment account letter instead of a “bank”
  • Minimum opening deposit: $1,000.00 (some banks do require less)
  • Minimum balance:
    • checking: usually somewhere between $250.00 to $1,000.00
    • savings: usually somewhere between $500.00 to $1,000.00

The forms ask for proof of source of funds: the bank is interested in knowing how you support yourself financially and where they should expect to receive income from.

If you are applying for your friendly nations visa through our office, we would be happy to accompany you to the bank for your initial interview.

Choosing a bank:

Consider the following when choosing where to apply for your personal bank account:

  1. Where you live and branches that you have close by
  2. Online banking – which ones have their website in English
  3. What online banking services do they offer?
  4. Do you / your friend / the company you work for already have a relationship with the bank?
  5. Expat opinions regarding customer service – you will be able to find complaints against every bank, but some are worse than others
  6. What is their online security platform? Will you need a widget in order to pay bills and make transfers?
  7. Number of ATM machines available in your area of town if you like to get cash out

For more information, do not hesitate to contact our office for assistance.