The Cook Islands Asset Protection Trust and History
The Cook Island Trust launched the offshore asset protection industry. The Cook Islands Trust was the first, and often still the best, asset protection vehicle available.
The Cook Island trust is most effective for US persons who wish to protect a rest egg offshore and turn over management to a CI investment advisor. If you wish to control the account, consider the Panama Foundation.
Here is a brief review of the Cook Island trust and its benefits. Please check out Premier Offshore for more information on international asset protection.
The International Trust Amendment Act was enacted by Cook Islands in 1989. The Parliament passed several Companies Acts established the offshore financial center.
Until 1965 Cook Islands had an unilateral parliamentary system which was adopted by the United Kingdom and by New Zealand. After 1965, Cook Islands became a self governing country including free association of United Kingdom and New Zealand.
In 1900 the Islands were annexed by British territory and in the following year included within the boundaries of New Zealand. According to the Constitution of the Islands the Queen in right of New Zealand is the Head of the State of Cook Islands.
The amended International Trusts Act is thus an overlap of the English and New Zealand and common law including Cook Islands precedents as it relates to trusts. If a case goes to trial, it is heard in New Zealand where the judge is to apply Cook Island law. This is a major benefit to those expecting litigation.
Clients of New Zealand and Australia enjoyed tax advantages due to their management control over Cook Islands for offshore businesses. This was until 1988, when those advantages were removed when New Zealand adopted “controlled foreign corporation” concepts in their tax law.
The ITAA Act of 1989 was written with US clients in mind. To have the history said, Cook Islands is today one of the best Asset Protection trust litigations which is widely accepted. Also it was the first jurisdiction who had included the Asset Protection clause in their Trusts Act.
The Act provides highly flexible estates, security and tax planning. To have a successful and reliable protection of assets with tax benefits Cook Islands is the best place to have them, and this phrase is accepted globally. It also has a vast variety of protection schemes and options such as dynasty, purpose and charitable trusts.
Following are the key provisions related to Asset Protection in Cook Islands:
- There is a two year statute of limitation within which a creditor must bring an action of fraudulent transfer or conveyance against a trust.
- There is no recognition of enforcement of foreign judgments in the Cook Island trust.
- The settlors may retain certain controls within their trust structure.
- Higher ‘beyond a reasonable doubt’ burden of proof.
- No punitive damages are recognized.
- Exclusion of Foreign Bankruptcy.
All the assets in the Cook Islands trust will be managed by the trustee. An overseer of the Trustee can also be provided by a trust protector. The protector is appointed by the client. He can be a financial planner, a family member, attorney etc.
I hope you found this post on the Cook Islands asset protection trust helpful. Please contact us at firstname.lastname@example.org for a free and confidential consultation.