Use a Private Foundation to Better Protect Heirs

By Georgetown Trust


A private interest foundation is considered to be a nonprofit organization. In reality, it can be described as somewhere between an offshore international business and a private trust. 

A private interest foundation starts with the wishes of the founder, and any money contributed to that foundation will be used toward these wishes.

If you are still looking for an addition to your estate plan that can protect your assets, limit your tax liability and offer long-term security to your heirs, loved ones or even charitable organizations you wish to support, then a private interest foundation may be the perfect choice.

Confidentiality and Anonymity

One of the biggest ways that a private foundation can better protect you as well as your heirs is its confidentiality. If you wish, you don't even have to disclose or make public the name of the founder, which means that your privacy is completely respected. 

Better still, the beneficiaries of the foundation, which might be your children, your spouse or your grandchildren, also won't need to have their names made public. This can allow you to all retain a sense of privacy and deal with financial matters in the way that you deem most appropriate.

Reduce Taxes Right Away

If assets remain in your name, then you may be paying taxes on them year after year. Stocks that increase in value or income from commercial property might fall under the category of capital gains taxation, which is slowly eating away at your profits and eroding the net worth that your loved ones should be able to inherit one day in the future. 

Instead of subjecting yourself to unnecessary taxation, place your assets within a private foundation. Most private foundations will be subject to a minimal $400 annual fee called the annual franchise tax. 

Enjoy Peace of Mind

Many individuals starting to think about estate planning are under the assumption that a private foundation is only a worthwhile option if you have millions of dollars in liquid assets ready to set aside. Thankfully, the reality is quite different. 

You only need $10,000 in patrimony to establish a private foundation. While private foundations can be established around the world, jurisdictions like Panama are known for a hospitable climate. With as little as $10,000, you can enjoy peace of mind and know that your loved ones, your heirs and anyone you wish to support will be financially secure even long after you are gone.

Foundation Assets Can't be Seized or Frozen

Even individuals who have a high net worth can face a problem or a reversal of fortunes that results in a whole new financial situation. While you might be able to adjust, your loved ones may not.

That's why it is so important to understand that when you establish a private foundation and place assets within it, those assets no longer belong to you in any way, shape or form.

If you should become involved in a legal battle, you are forced to declare bankruptcy, or your bank accounts are frozen, the assets within the private foundation still can't be touched.

Establishing a private foundation in a place like Panama can be the key to protecting your heirs and guaranteeing their financial future. You can enjoy greater privacy regarding your finances, your assets can't be seized or frozen, you will pay less in taxes and you can have peace of mind.

Contact Georgetown Trust


Topics: Foundations