Differences Between Private Interest Foundations and Trusts
Even if these legal entities are similar, next you will find the differences that stand out. These will be extremely important when the time comes to choose between one of the two.
- The board of the foundation requires a legal person or a minimum or three people. In contrast to this, a trust allows one or more trustees without having a maximum number of members.
- In the trust, the trustee manages the assets according to the instructions provided by the settlor. However, in the case of Private Foundations, assets are transferred to the Foundation being them a distinct heritage from the personal assets of the founder.
- The writing of the Trust must be extremely clear and detailed regarding the rights and obligations of the Trustee while the Statutes of the Foundation do not necessarily need to describe what the rights and obligations of the parties are. However, these can be agreed and recorded in a private document.
- The Founding Act of Private Interest Foundations should always be recorded in a Public Registry. Contrary to this, the Trust is created in a private document without requiring registration in the Public Registry.
- The assets of the Foundation will be managed by the Board of the Foundation, which will consist of natural or legal persons of any nationality. Unlike assets in a PIF, the trust assets are managed by the trustee.
Our law firm Delvalle & Delvalle offers comprehensive legal advice so that you can learn all about the legal concept which is more suited to your particular needs and concerns while enjoying the legal, economic and political stability of the Republic of Panama.
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