Where Theres a Will, Theres a Way!
With a recent move to Panama from the United States, we were overwhelmed with getting all of the legalities accomplished: cedula, drivers’ licenses, health insurance, car purchase and insurance, etc. We had done our due diligence in the U.S. and had our assets covered by our will in the U.S. but hadn’t really thought about having the need for a will in Panama.Our first step was to file a “Letter of Wishes.” It is a very simple document (ours is six lines each), merely stating that in the event of the death of one of the spouses, the surviving spouse would be the recipient of the deceased spouse’s shares of the corporation. In the event of the death of both spouses, the Letter of Wishes lists the beneficiary of the corporation. Our Letters of Wishes only covers our corporation, as our home and the land it is on are the only items in our corporation. We retain the original Letters of Wishes (one for each spouse), and our attorney retains a copy.In principle as a foreigner, you are able to dispose of your Panamanian assets through a well-written will of your home country, which may be valid in Panama. However, it is necessary to check the treaties between Panama and the country of your foreign will to determine validity and further legal consequences.
We tried to get beneficiaries listed on our Panamanian bank account. Our bank requires that the benefactors be consignors, which would mean that they would have to declare the foreign bank account in the U.S. (which would subject them to tax ramifications in the U.S.). Also consignors have direct access to the bank account. So after consulting with our attorney, we decided that we needed a Panamanian will.
The process of obtaining a will in Panama is a formal process that requires a lawyer and interpreters for those non-fluent in Spanish. Both spouses need to have their own separate will, because in Panama, unlike a living will in the U.S., there are no joint wills, and a third party cannot make a will under the legal procedures of power of attorney. We worked our wills in English until we were confident they represented our intentions. Two interpreters of our choice prepared the documents in Spanish. If the Notary or witness does not personally know the person making the will, the person’s identity must also be confirmed (via Passport, cedula, or both). Preparing the will requires that you consider all bank accounts and material possessions. The process is formal, intricate, and should be taken seriously. At our will reading and signing, our lawyer and interpreters were present as witnesses. After the reading of the wills, we each were asked to sign our personal will while a photo was taken during signing, along with a thumbprint, and then signed by the four witnesses.
If you die without a will, your assets will be passed on to your surviving spouse and children. If there is no surviving spouse, your assets may be passed on to your children or living parents or grandchildren; however, the process is complicated, and your inheritors may encounter expensive legal fees and time consuming proceedings should you not follow simple rules to avoid probate. Without a will, your assets will be distributed according to civil law and not according to your wishes. A judge will appoint your executor. If no inheritors appear before the judge, the municipality where you last resided will inherit. Bottom line, it is not smart to die without a will, period!
Note: The information in this article is based on the writer’s experience and understanding of the legal process. Every situation is different, and it is highly recommended to consult with an attorney before making any decisions.