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COOK ISLANDS TRUSTS

Summary
Cook Islands Trusts
Service Type
Cook Islands Trusts
Provider Name
Dilendorf Law Firm,
85 Broad Street,New York,New York-10004,
Telephone No.212.457.9797
Area
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
Description
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.

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.

ATTORNEYS' EXPERIENCE

ATTORNEYS' EXPERIENCE

Representing a US-based family office with setting up an asset protection trust on the Cook Islands

ATTORNEYS' EXPERIENCE

Advising a digital asset/crypto portfolio manager with setting up an asset protection structure on the Cook Islands

ATTORNEYS' EXPERIENCE

Representing a small-business owner with transferring the company’s shares to a Cook Island asset protection trust

ATTORNEYS' EXPERIENCE

Represented a foreign investor as co-counsel in connection with setting-up a Delaware Dynasty Trust for asset protection purposes and for purposes of purchasing and holding investment real estate in New York

ATTORNEYS' EXPERIENCE

Advising US founders on shifting the IP rights for a digital marketplace to a Cook Islands International Trust

ATTORNEYS' EXPERIENCE

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.

Additional Benefits:

  • Statute of limitations for a Cooks trust is one year.
  • Strength of asset protection statutes make the Cooks trust impenetrable, even by the federal government.
  • The laws surrounding Cook Islands trusts were written with Americans in mind and were actually written by a Colorado asset protection attorney.
  • The value of the assets is not disclosed, and it is against the law in the Cooks to identify who owns the trusts or to provide any information about them.
  • Cash and investment accounts, as well as real estate holdings, crypto and businesses, may be registered in the trusts, but unlike DAPTs none of these are required to be physically located in the Cooks.
  • Cook Islands, a self-governing state associated with New Zealand, offer a different type of secrecy: the long arm of United States law simply does not reach it.  For example,
    • Federal Trade Commission (FTC) failed to collect a $37.5 million judgment against Kevin Trudeau, author of The Weight Loss Cure, for “airing blatantly deceptive infomercials.
    • Fannie Mae, a government-sponsored lender, was unable to collect on a $10 million judgment against Oklahoma real estate investor Andrew Grossman, despite a trial that dragged on for years.

Cook Islands Are Crypto-Friendly

Cook Islands Ministry of Finance and Economic Management (MFEM) recently modernized the trust industry by launching ‘Smart Trust platform’ built on a blockchain.  This moved the traditional legal framework and processes onto a blockchain-based digital platform.

This program enables creation of Crypto Smart Asset Protection Trusts, which allows clients to manage their crypto assets and NFTs in a safe and trusted environment. 

Crypto Smart Asset Protection Trusts built on the blockchain:

  • ensures privacy;
  • allows management and trading of cryptocurrencies inside placed inside of a trust;
  • ensures transparency between desired individuals (e.g., trust beneficiaries) but not available to the world at large;
  • allows transfer of digital asset ownership to the trust from any third party;
  • allows transfer of asset’s ownership out of the trust.

The use of Crypto Smart Asset Protection Trusts allows asset protection planners and clients access protection without the inherent problems and risks of traditional trusts.  Smart Trusts efficiently combined the benefits of the traditional trust with blockchain technology, transcending limitations that existed in the ownership, management and administration of both cryptocurrency and physical assets.

Structure

A typical Cook Islands Wealth Protection structure has several components allowing both flexibility and protection:

  • The Settlor establishes a Cook Islands International Trust
  • A Cook Islands licenced trustee serves as the Trustee
  • The flexible Trust structured allows the settlor and his family members to be appointed discretionary beneficiaries of the Trust
  • Protector can be appointed to monitor the activities of the Trustee, and can be granted absolute or veto powers or a combination of both
  • The Settlor can provide a letter to the Trustee detailing his/her wishes in regards to the investment and distribution of assets both during and after his/her lifetime
  • The Trust owns 100% of a limited liability company (“LLC”) incorporated in the Cook Islands, or other jurisdiction appropriate to the client’s circumstances
  • The Settlor, or his representative, is the Manager of the LLC
  • Assets are held and managed within the LLC or entities underlying it

Features

  • The Trustee is not required to be involved in the management of the LLC or its assets.
  • The Trustee can be granted power to remove and replace the Manager of the LLC in certain circumstances to protect the interests of the Manager and the assets under his/her control
  • The Manager is not personally liable for the debts, obligations or liabilities of the LLC
  • The Trustee is not subject to foreign judgements or forced heirship rules

Benefits

  • Assets held within the structure, including family businesses, can be managed and operated by the Settlor and his/her family without interference from the Trustee
  • The Settlor’s personal and business assets can be passed to the next generations in an orderly fashion in accordance with his/her wishes.
  • A change in Manager of the LLC does not give rise to fraudulent conveyance claims
  • Enhanced protection of assets from unforeseen creditors
  • Legitimate confidentiality of ultimate ownership of assets within the structure

What Assets Can Be Transferred into a Trust?

  • Bank and brokerage accounts
  • Shareholder stock from closely held corporations
  • Money market accounts, cash, checking and savings accounts
  • Cryptocurrrency, NFTs and other types of digital assets (Bitcoin, Ethereum, Stablecoins).
  • Partnership assets
  • Real estate
  • Life Insurance Policies
  • Vehicles: cars, boats, trucks, airplanes

Planning Considerations

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.

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:

Summary
Cook Islands Trusts
Service Type
Cook Islands Trusts
Provider Name
Dilendorf Law Firm,
85 Broad Street,New York,New York-10004,
Telephone No.212.457.9797
Area
Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming
Description
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.

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

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