An offshore foundation is used to manage and control assets. This is accomplished through a secret letter of wishes. This letter is, as it's name implies, a private document that is not available to the public. Under no circumstances, is this letter ever required to be made public and is protected by Panama law.

A foundation can be used much like a trust to pass on assets bypassing estate taxes at the time of death. Many countries have made death a taxable event. This makes absolutely no sense of course and every person should consider an offshore foundation (or offshore trust) to protect their assets.

An offshore foundation (in Panama for example) has no ownership. Legally there is no way to own a foundation. It can however, own a corporation and a bank account which makes it the cornerstone of some of the best asset protection structures in the world today.

A foundation is an iron clad way to secure your assets because no court or judge can ever order you to provide funds that a foundation owns. That would be an illegal order and courts cannot issue illegal orders.

There is some confusion about the difference between a foundation and a corporation. A foundation's purpose is to manage funds while a corporation's purpose is to engage in business activities. It is illegal for a foundation to engage in for profit business activities. For this reason, most asset protection packages include a corporation owned by a foundation. This affords all the added security of a foundation and all the flexibility of an offshore company.

Unlike onshore trusts, which are commonly used in estate planning, an offshore foundation is strictly enforced by Panama courts. In the event of death, family members will not be entering into litigation to try and break the foundation. It is common for an onshore trust to be broken for any number of different reasons. If you want your wishes followed to the "letter" then a Panama foundation is your best option.

The foundation is unique because it cannot be owned by anyone and it does not pay taxes on any funds it holds (as long as the funds are not generated by business in Panama -- ie. You cannot open a bakery in Panama and not pay taxes using this vehicle.) All money that is not generated in Panama is held tax free which makes it the perfect part of any tax plan.