Cook Islands Asset Protection Trusts
In 1984 the Cook Islands enacted the International Trusts Act of 1984, becoming the premier location for offshore asset protection trusts. The Cook Islands are a superior jurisdiction for offshore trusts for several reasons: (1) the laws are favorable for asset protection, (2) the Cook Islands court system has proven a track record of defending asset protection trusts, and (3) the Cook Islands have no agreements or treaties with the United States which would force them to enforce US judgments.
Why are the Cook Islands superior for asset protection?
The Cook Islands are a superior jurisdiction for offshore asset protection trusts, for several reasons: (1) the laws are designed to be favorable for asset protection, (2) the Cook Islands court system has a proven track record of upholding asset protection trusts, and (3) the Cook Islands have no agreements or treaties with the United States which would require them to enforce US judgments.
The Cook Islands protective laws are so strong that the US government has failed to reach assets held in a Cook Islands trust.
The trust companies we work with are run by attorneys and professional trust officers. Trust business accounts for a significant portion of the gross domestic product of the Cook Islands, second only to tourism. As such, the Cook Islands government requires strict compliance by the trust companies with relevant laws and regulations.
Why shouldn’t I get a trust form from a trust company?
Some foreign trust companies will provide you with a form trust. These form trust documents cannot be expected to take into account the U.S. tax consequences (income and estate) of settling that trust. If U.S. tax considerations are not properly addressed in the trust document, serious adverse consequences often result. In addition, these form documents often will not properly (if at all) implement your estate planning goals. A number of clients came to us with form trusts which did not do the job, so we had to start from scratch.
Why offshore vs. domestic asset protection planning?
A number of states have adopted asset protection trust legislation (of varying degrees) designed to attract the business of people looking for domestic solutions. In a few cases these domestic asset protection solutions may be effective. However, these domestic structures require you to foresee the types of creditors you will have (all states have loopholes for certain creditors), and the kinds of claims those creditors will bring.
Domestic jurisdictions may protect you from a creditor, until you are forced into bankruptcy. Federal law gives judges the ability to set aside state asset protection trusts under many circumstances (most recently demonstrated by a Federal Bankruptcy Court setting aside an Alaska trust). If you are confident that your creditors and the US legal system will treat you fairly, and that no creditor will force you into bankruptcy for at least 10 years, then consider domestic asset protection.
Otherwise, consider that properly implemented offshore asset protection is available to effectively protect your assets.
Why should I choose your firm?
The most important considerations in selecting a law firm are the qualifications and experience of the attorneys. Our firm has concentrated its practice in asset protection for over 20 years. Our attorneys have published numerous books, journals, and articles, many of which are used by other professionals as research tools for asset protection issues. The majority of our clients come to us through referrals from other attorneys familiar with our qualifications and experience.
Asset protection is most effective when implemented in advance of a lawsuit, judgment, or claim. But even if you have been sued or threatened with a lawsuit, it may be possible to protect your assets. If you are an individual or company at risk from lawsuits or other claims, you should consult with us as soon as possible.