Double Bullet Proof Asset Protection
By Aurelia Masterson, www.panamalaw.org
If you have substantial assets and/or serious potential financial enemies the following asset protection strategies may be of value to you. They are not very complicated but highly effective. We are going to be addressing worst-case scenarios in which your financial enemies are pursuing you in court in your home country or another country. We are not including the important fine point details here for ease of reading. Bullet Proof Asset Protection - What is done is an anonymous Panama Bearer Share Corporation is formed. The owner/stockholder of the Corporation is an anonymous Panama Private Interest Foundation. The anonymous Corporation is not owned by you and you can say so, plus the Panama Foundation really has no owner so you are not misrepresenting anything. Under Panama Law a Foundation (Fundacion) cannot have an owner, just beneficiaries and a protector. It is best to have the corporation owned by the foundation from day one. If you were ever asked the question – Do you now or at any time have you ever owned XYZ corporation in part or whole or any shares thereof, you can state emphatically NO. It starts getting the other side very interested if you say you at one time owned the corporation in whole or in part and you do not want to be encouraging any interest. You want them to think where they are going is a dead end and go to another line of questioning. Bullet Proof Asset Protection Banking - Of course the Corporation can bank at one bank in Panama and the Foundation at another Panama bank, or they can both bank at the same bank and use the banks online banking to transfer funds from one account to the other without ever needing to send a wire or write a check. This means if the Corporation is used to send and receive all the monies there are no external trails to the Foundation and its bank account. The vast majority of the funds are kept in the foundation bank account so if trouble were to come knocking on your door, the door knocked on would be the corporate one not the foundation where all the funds are held. Penetrating the corporation to even find out the foundation existed would be a formidable task with extremely poor chance of success and it would take a long time, months if not years. Whether or not the foundation assets remained in place while the corporation was being attacked would be up to you. The Panama banking system has a Panama only ACH system allowing one to transfer money from one Panama Bank account to another even in a different Panama Bank. This is all done without using the not private international wire system and since it is Panama Bank to Bank, it is all covered by the Panama Bank Secrecy Laws. For some asset protection strategies the foundation may not have a bank account at all. Double Bullet Proof Asset Protection – Let’s assume you had a financial enemy in some country (there are countries run by dictators etc) that was suing you or trying to collect money from you and had you in a court somewhere or in a court ordered deposition. You were asked if you ever owned any shares in the XYZ Corporation and you said no. XYZ Corporation is the
Panama Bearer Share Corporation. Then you were asked if you knew whom the owner of the corporation was and since you do know you say yes and state the name of the Foundation. Then the lawyer representing the other side asks you if you own the foundation. You say no. You do not say Foundations have no owner in Panama, because no one ever asked you about that. You never want to be answering questions that you were never asked. Now you have probably confused the vast majority of the attorneys out there who have precious little or probably next to no knowledge about Panama law. However if the opposing side does understand offshore law the next question is going to be are you a beneficiary of the foundation. Your answer will be - to the best of my knowledge my name does not appear as a beneficiary of this foundation. You should add that any foundation in the world could list anyone like a president of a country as a beneficiary and not tell him or her about it waiting for him or her to find out after his or her death. If you could be held liable for being a beneficiary of a foundation without your knowledge, then I can tell you a lot of unpopular world leaders would be listed this way. If the lawyer continues tell him to go ask the foundation these questions. This is good because what you said is true and will begin to confuse the judge and the lawyer. These people are not Panama Foundation literate. The other side’s lawyer will try to deal with this and that is the trap we want but wait a bit. If you tell the other side you are a beneficiary then they could attempt to argue that your asset protection structure is a straw man pass through. This means it is a fraudulent structure allowing you to control and benefit from the structure yet not be the owner. I did not say they would prevail in this argument it just gives them the room to try it. The corporation owned by the foundation is still a very strong structure and their argument would not be easy to prove with bank secrecy and your name not appearing in any public registry. There is a way to make things even stronger and more confusing to the lawyers on the other side. What is done is you have a second foundation that is listed as the beneficiary of the first foundation. The corporation is still owned by the first foundation. The lawyer did not ask you if you were a beneficiary of a second foundation. He does not even know the second foundation exists yet alone is a beneficiary of the first foundation. So this allows you more freedom in a court ordered questioning and of course even more protection. Asset Protection Bank Signatory Considerations – Let us assume you are in a court order questioning, either in the courtroom or in a deposition. Lawyers may follow the above line of questioning and then at some point ask you if you sign on the bank account(s) of the corporation or foundations. We have custom agreements available which establish you as an employee manager of the corporation or foundation. They are signed, notarized and can even be apostilled by the nominee directors of the corporation or nominee council members of the foundation. They state the terms of your employment, duties, responsibilities etc including bookkeeping and signing on the bank accounts as part of the job description. People that sign on the bank accounts of the largest corporations are not usually the owners of the corporation. If an accounting manager of Ford went through a lawsuit and lost the creditor would not be able to take the money away from the Ford Corporation just because the guy signed on the bank account as an employee. So now you do not own the corporation and you do not own the foundation and you sign on the bank account as part of the terms of your employment. This will create quite a secure structure for you.
Asset Protection Banking Weak Links – The weak link in any structure is going to be funding the bank accounts. The lawyers in your home country could get a subpoena order to open up your bank records to them. Often the records wind up in the court evidence file which is public domain so do take care to fight against this by asking the judge to seal these records. What happens when the lawyers see you wired a large sum to the corporation or foundation bank account in Panama or any other offshore jurisdiction from your home country bank accounts? They are going to get into a line of questioning about this. Money is the name of their game and they are going to go after any money trail they detect. We have already covered ways to protect you in this area. Another secure way to protect yourself is to use the Guatemala Law Firm bank account to receive the funds for you. The Guatemala Law Firm can do this with a secret Trust Agreement with you. Then after the money is received they will forward the funds according to your direction anywhere or use the funds to purchase assets as you so direct such as real estate, stocks, bonds, boats, planes etc. They can be transferred into a corporate bank account that you operate through online banking, ATM cards, Visa cards, etc. at the same bank in Guatemala that the law firm uses without any external trails. If you are asked about the transfer of funds to a law firm bank account you just simply reply that it is privileged information under attorney client privilege. It would be rare that a court would violate attorney client privilege just because the other side asked them to. It would take a lot of evidence showing that there was more going on and since we have anonymous corporations, foundations, strong attorney client privilege and bank secrecy such evidence is going to be hard to produce. Producing the evidence is the responsibility of the other side’s lawyer, not the judge and not you. The short collection attorney’s take is questioning you and that is why we present them with a dead end this way. The judge is just a neutral party looking at the evidence presented. If one side cannot get evidence lawfully that is not the problem of the court and the court only acts on the evidence presented to it lawfully. Additional Protections – One can have our law firm prepare a Confidentiality Agreement. This agreement is between you and the Corporation or Foundation. It stipulates that you will not reveal any information about the corporation or foundation further stating that you will be liable for a judgment of $1,000,000 if you do so. The document will serve as an order for the courts in Panama to enter a summary judgment against you for the $1,000,000 and threaten you with prosecution criminally for any such revelations. In the above scenario if you are being questioned you at the right time present this notarized document to the lawyer and the judge. It is illegal under international law for the court to compel you to expose yourself in such a way. The court outside of Panama has no authority to grant any immunity and compelling you to answer would violate international law. You would also be kind enough to tell the lawyer (not the judge) that you will sue him in his country or in the international courts for the illegal act of compelling answers and collect from his malpractice carrier the money you will lose. The key words here are malpractice carrier. Once you notify his malpractice carrier of the lawsuit that you will be kind enough to do, his rates will go up if they do not drop him. It will cost the lawyer and his malpractice carrier a fortune to get the legal research on this matter. It will involve Panama lawyers and International lawyers that bill $600 an hour. Figure a bare bones minimum of $45,000 for an opinion, probably $75,000 or more. The opinion would probably indicate some
degree of liability for the lawyer since it would be very rare to see an opinion that goes 100% one way or the other. The lawyer knows some of these things and of course what he doesn’t know will weigh more heavily on him. These dilemmas will go around in his head while he is questioning you. You have a strong chance that he will protect himself first and the heck with his client and stop or change this line of questioning – this is your goal here. The judge could be sued under international law in the Hague Court and you could so tell the judge but that can create a hostile judge, be careful here use only as a last resort. The judge knows his immunity does not give him the right to violate international law or you could so remind him. Please note this is all being done without lying and remember you should always have a lawyer with you. Panama Foundation Asset Management Considerations - Now we need to look at protection aspects of this scenario pertaining to you keeping the assets managed correctly. Panama Foundations can have a position held by a person called a Protector. The protector cannot initiate a transaction on behalf of the foundation. The protector oversees the activities of the foundation to make sure they are consistent with the purposes of the foundation. The protector can approve or disapprove any transaction the foundation undertakes. It can be written that the foundation can do nothing without the express approval of the protector. The protector does not control the foundation. The employees of the Foundation such as the investment manager which could be you operating under a general power of attorney from the Foundation or Corporation, would need to have all activities approved by the Foundation Protector. Yes you could be the employee investment manager under formal contract and behind the scenes be the Foundation Protector. The foundation charter can state that for the foundation nominee council members (supplied by us similar to nominee directors of a corporation) to exercise any of their powers they must first have the written authorization of the Foundation Protector, committee or other supervisory entity appointed by the Founder (we are usually the founder and can do as you direct us at onset). The Foundation Protector does not appear in any public records or database. The assets of a Panama Foundation cannot be frozen pre-trial unless the foundation itself directly did something wrong like violated a lease. The leaseholder would appear in court with a copy of the lease, make a statement about failure to pay, failure to give up the property, how collection attempts failed repeatedly and how much he is owed. The creditor will post a bond and get the court to freeze the amount of money owed to the creditor. This is why we have our clients never have the foundation do anything except act as a holding entity and then the foundation is a most secure asset protection vehicle. We can custom design a number of asset protection solutions. Do give us a call and discuss your needs and we can offer suggestions. For additional information on this subject go to: Panama Bearer Share Corporations Panama Foundations
Foundation Protectors Guatemala Trust Agreement Banking Offshore Trust Distress Clause