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Trusts Established
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Years Experience
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People Protected
Tax Planning
Tax optimisation and planning for yourself and future generations
Legal Protection
Protect your assets from frivolous lawsuits and divorce
Asset Protection
Protect your digital and physical assets from real estate to intellectual property
Global Uncertainty
Secure your wealth from unknown future political or economic threats
Bullet Proof
Unbreakable security from foreign governments
Estate Planning
Plan for and protect your family's future wealth
INTRO
1. Two Year Statute of Limitations
The legislation includes a solvency test that determines fraudulent conveyance, and requires a specific timeline and detailed information for creditors to pursue their claims. This is a major obstacle that will only be overcome by the most determined creditor. Typically, claims are settled through negotiation rather than in court.
2. Judicial Sovereignty From Foreign Court Orders
Court orders in foreign countries do not have legal authority over local trustees. Settlors enjoy restricted access to discovery. The legal system is structured to favor defendants, placing a higher evidentiary burden on the creditor making a claim. This provides reassurance to those contemplating the use of a trust for asset protection.
3. Protection From Fraudulent Creditors
Creditors must utilize legal methods within the Cook Islands, which have substantial barriers in place to deter baseless claims. The Cook Islands have laws that protect clients who live in jurisdictions with creditor-friendly legislation.
4. Privacy & Confidentiality
Cook Islands law allows for high levels of privacy. There are no publicly available records, preserving the discrete financial profiles and identities of its beneficiaries and settlors.
5. Anonymous Trust Structures
A Cook Island trust can hold anonymous LLCs and offshore bank accounts to obscure asset ownership. The trust deed itself is also not public record.
6. Favorable Tax Treatment
Cook Island trusts are not subject to income, capital gains, estate, gift, or other taxes. There are also no reporting requirements. This minimizes costs and privacy concerns.
7. Separation Of Legal And Beneficial Ownership
There is clear separation between legal title to trust assets (held by trustee) and beneficial ownership (held by settlor/beneficiaries).
8. Flexible Trust Arrangement
Cook Islands trusts can be amended and changed. The settlor/protector can be reappointed. This allows trusts to adapt over time.
9. No Forced Heirship Rules
Cook Islands trusts operate independently from inheritance laws of other nations. There are no forced heirship rules limiting how assets are distributed.
Undeniable Proof
Fraudulent Conveyance
They must definitively prove fraudulent conveyance - that the trust assets were transferred specifically to deceive and defraud that particular creditor. General asset protection motivations are not considered fraudulent under Cook Islands law.
Beyond A Reasonable Doubt
2yr Statute of Limitations
The creditor must provide clear and convincing evidence beyond a reasonable doubt that the transfers into trust were intentionally designed to deprive them of assets owed. This is an exceptionally high bar to meet in the Cook Island court system. Additionally, Cook Islands imposes a short 2 year statute of limitations on fraudulent conveyance claims against trusts. Any lawsuit brought outside this narrow window will not be entertained by Cook Island courts.
Must Fully Litigate in Cook Islands
Non Enforceable Judgments
Importantly, Cook Islands does not recognize or enforce judgments from foreign jurisdictions relating to trusts governed under their laws. A creditor cannot rely on a favorable ruling from their home country's courts. They must fully litigate the matter in the Cook Islands legal system. This negates any previous legal victories.
Cook Islands Trust with a Swiss Account
Swiss bank accounts are notorious for their safety and privacy, so where better to deposit your hard-earned wealth.
In practice, the assets will be deposited/safeguarded in a Swiss bank account which is owned by the LLC (with you as manager), which is in turn owned by the Cook Islands Trust. This trio provides multiple layers of protection, whilst being able to benefit from the unique advantages of each of these tools.
- Safety and Stability: Swiss bank accounts are one of the safest in the world. Swiss banking regulations require banks to hold high capital reserve ratios which serve to protect depositors’ funds.
- Investment Opportunities: Swiss banks offer access to top quality investment opportunities for account holders who decide to open an investment account.
- Efficiency and Service: Swiss banks are among the best in the world in terms of their efficiency and high-quality customer service.
- Privacy: There is still a culture of privacy among Swiss banks, and even the identities of account holders are kept highly confidential unless in extremely rare cases or suspicion of criminal activity. Furthermore, owning a Swiss bank account via a Nevis LLC is as close to complete anonymity as you can expect to get in this day and age.
Cook Islands Trust with a Nevis LLC
This type of structure is the best way to protect your assets and, if established well before any problems arise, will avoid the issue of fraudulent conveyance.
This is because the trustee simply has to temporarily remove you as manager of the LLC to protect the assets, and so you will not need to make any dubious transfer of assets after you are faced with a liability claim.
- Asset Protection: Nevis courts also do not recognise foreign court orders, so any claimant will have to file a case in Nevis itself, which adds an additional layer of protection.
- Privacy: A Nevis LLC provides its owners with complete anonymity. The identifies of beneficial owners are not publicly available nor registered anywhere. Nevis is renowned for its strict privacy laws, whereby it is a crime to disclose the identities of company owners without authorisation.
- Tax-Free Jurisdiction: Nevis is well-known as a tax haven. Offshore LLCs can enjoy zero taxes on dividends, income, capital distributions, and undistributed earnings.
- Flexible ownership requirements: Nevis LLCs have highly flexible and favourable ownership requirements. There is no limitation on the number of members, and 100% foreign ownership is permitted. Nominee ownership is also possible for greater privacy.
A Cheaper Cook Islands Trust Alternative
If you are looking for a more budget friendly asset protection option, Nevis is the logical next best jurisdiction. It has many of the same features as the Cook Islands Trust, such as confidentiality, strong asset proection laws, and no public reporting requirements. A unique feature is that lawsuits brought against the trust must place a 100,000 USD bond before any claim is made, which provides a strong deterrent against phishing attempts.
Other details of the trust include
- There is a statute of limitations of 1 year of pursuance of any claims.
- Creditors pursuing a claim must do so within Nevis's legal system, and does not bow down to foreign court orders.
- Nevis law does not recognize forced heirship rules in the home country of a settlor or beneficiary
- Trustees do not have the power to make distributions of the trust other than what is intended in the Trust deed and as per the instructions of the beneficiary
- Nevisian trust law protects the assets of a trust from a creditor who tries to get at it through the trustee, or through the protector. A creditor can not force either parties to make distributions against the wishes of the settlor and as was directed by the trust.
- Intended beneficiaries can receive payments from the trust without taking on liability from a creditor
About
Offshore
Protection
We specialize in custom offshore strategies to reduce your taxes, diversify your wealth, and protect your assets so you can pursue your freedom.
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Who Are We?
Offshore Protection is a boutique offshore law firm providing customized multi-jurisdictional offshore services since 1996.
Offshore Protection is the world’s most trusted offshore services provider. Our team has helped successful investors and entrepreneurs reduce their tax bills, protect their assets and maximize their freedom for over 25 years.
Our holistic approach combines expert legal advice with innovative solutions that enable our clients to offshore their business, protect their assets, and become a global citizen.
