D. TRUSTS

The Panamanian trust is similar to its common law counterpart. Today, Trusts are regulated by Law 1, 1984.

Trusts are one of the most practical and effective mechanisms under Panamanian law, allowing the owner of any type of asset (settlor) to transfer its property or domain to one person, the trustee, so that he administers and disposes of them for some time or permanently, for the benefit of another person (beneficiary), that can even be the settlor.

With the purpose of increasing international trusts, the law exempts all non-Panamanian income trusts. With the same purpose, it introduces the obligation of the trustee to maintain the operations of the trust in secrecy.

For all legal purposes, the trust assets are completely independent from the trustee's personal assets and cannot be seized, with the exception of damages or obligations arising from the execution of the trust, or by any third person, when fraud or damages to their rights have been committed. After the Settlor's death, the trust can continue to administer the assets under its rules, and for the time established in its incorporation documents.

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