Cooke Island Trusts: Prudent Planning Tool
May 28th, 2014 at 9:35 AM
As a Certified Asset Protection Planner, I am aware that the use of a Cooke Island Irrevocable Trust is a powerful and legitimate planning tool for wealthy business owners, real estate developers, and physicians throughout the world. The Cooke Islands is a popular offshore haven, offering unique asset protection and privacy benefits.
The world’s strongest asset protection laws.
In 1989 the Cooke Islands, a former Protectorate of New Zealand in the South Pacific, began an effort to diversify its tourist economy and attract a robust financial services industry. New laws were enacted focusing heavily in the area of asset protection. These laws created a single, clear and detailed legislative scheme that permitted the establishment of trusts intended to shield and protect assets from lawsuits and claims.
Through these efforts and various modifications and court challenges over the years, it is generally acknowledged that the Cooke Islands as the strongest asset protection laws in the world. Asset trusts are not disclosed to Cooke Island authorities, and the law makes it a crime to identify who owns the trusts or to provide any information about them. Judgements from foreign countries are not enforced in the Cooke Islands against the trusts established there, assets of the trusts cannot be seized by a creditor, and the trustees are required to maintain strict secrecy regarding the owners and beneficiaries of the trusts. The Government of the Cooke Islands has no treaties or mutual assistance agreements, unlike the Swiss, that permit the disclosure or cooperation with the foreign creditor or even government agency in a collection action.
Liability risks from operating a business or professional practice are well known and understood, and many individuals sensibly want to protect accumulated assets from the particular risk of their business. This can be accomplished in some degree through the use of well-known business entities and strategies such as corporations, LLC’s, family limited partnerships, retirement plans and domestic and foreign trusts. Cooke Island Trusts sometimes play a role as a component of these asset protection and estate plans for those seeking the ultimate protection.