COOK ISLANDS TRUSTS
Telephone No.212.457.9797
The team at Dilendorf Law Firm is well-versed in the many facets of asset protection trusts, both foreign and domestic. One variety of offshore trusts has gained popularity in recent years because the Cook Islands are known for being an unfriendly jurisdiction for creditors.
In 1984, this Pacific island nation, located two-thousand miles Northeast of New Zealand, passed the International Trusts Act, which allowed for the birth of the self-settled spendthrift trust, the first true asset protection trust. Many other countries decided to follow suit, including the Bahamas, the Cayman Islands and Belize. By law, this type of trust is prohibited from recognizing any foreign judgments or jurisdiction.
Telephone No.212.457.9797
What makes a Cook Islands Trust so attractive?
As the Cook Islands Trust became more ubiquitous and increasingly popular with American businesses, they have maintained a great reputation for security. Any individual or business looking for powerful asset protection benefits, particularly those who are worried about future litigation, will want to consider this option.
A creditor who wishes to extract assets from a Cook Islands trust must re-try the case in the island nation where it was formed, in a jurisdiction known for its unfriendliness to creditors. Even if the plaintiff chooses to go down this road, and many will not have the resources, they must provide proof “beyond a reasonable doubt”, not just the “preponderance of evidence” used in the United States. In addition, the plaintiffs are required to pay legal fees and court costs upfront. It is also likely that the loser of the case will pay their own legal fees as well as the winner’s.
What are the drawbacks of a Cook Islands Trust?
Any offshore trust will have higher maintenance costs and setup fees, along with lengthier federal disclosures and IRS filings. Despite being entirely ethical and legal, negative perceptions of impropriety often accompany offshore accounts. The settlor will also be required to relinquish control of the account to a foreign trustee.
As with any new trust plan, it is always wise to research the pros and cons before making any sudden moves. Seeking advice from an asset protection specialist will help determine if this option is right for you.
The benefits of a Cook Islands Trust
The financial benefits of these trusts are numerous, including protection from lawsuits, strict confidentiality, no income taxes, no limits on the perpetuity of the trust, the flexibility to select managing trustees from one’s own country, zero impact from inheritance laws or court judgments from other countries.
Most people considering a Cook Islands trust will want to work with a trusted asset protection lawyer to determine if makes sense for their situation. When a Cook Islands trust is selected for your asset protection plan, the legal team at Dilendorf Law Firm will provide the most strategic guidance.
Resources:
- Cooks Island International Trust Act
- Cook Islands Asset Protection Law
- Asset Protection Trusts
- NYT Article: the Cook Islands, a Paradise of Untouchable Assets
- Behind the Corporate Veil: US Tax Court
- Protection Assets from Creditors Legally, Ethically, and Morally
- Offshore Asset Protection Trust: Prudent Financial Planning Device
- Foreign Trusts
- US Position on Offshore Tax Havens
- Guide to Law Online: Cook Islands Trusts
- Give the People What They Want? The Onshoring of the Offshore
- Use of Trusts and LLCs in Asset Protection
- International Trust and Estate Planning: Asset Protection Trusts
- US Senate Committee on the Judiciary: Fighting Financial Networks Through Transparency
- Cooks Island – International Monterey Fund
- What’s is the U.S. Position on Offshore Tax Havens?
- Asset Protection Trusts – Foreign Asset Protection Trusts
Telephone No.212.457.9797
For more information about our Cook Islands trust-related services,
For more information about our Cook Islands trust-related services,
please contact Dilendorf Law Firm by sending an email or calling us at 212.457.9797