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Set Up a Cook Islands Trust For Bulletproof Offshore Asset Protection

A Cook Islands Trust is the worlds leading international asset protection trust structure. The Cook Islands are a Commonwealth nation ruled by the British Common Law system located in the South Pacific and are a self governing nation in free association with New Zealand. The most populated island is called Rarotonga located south of Hawaii with a long history that goes back nearly 3000 years.

A trust is formed under the Cook Islands International Trusts Act amended in 1989 has the strongest proven asset protection case law history. An offshore trust is for those individuals who would like to preserve and protect assets in times of uncertainty, from creditors, lawsuits, and from any future, economic, or legal threats.

A Cook Islands Trust is the most effective means to secure security and protect your assets from lawsuits, creditors for estate planning or divorcee protection. Although the offshore financial sector has received a lot of scrutiny from foreign governments seeking to restrict the use of offshore services, the Cook Islands has been kept out of the limelight and continues to have a robust offshore asset protection industry.

The long arm of foreign governments can not reach Cook Islands trusts, nor do the Cook Islands uphold foreign government court orders demanding account information or asset seizure. A Cook Islands Trust, explains Jennifer A. Davis, chief executive of the Cook Islands Financial Services Development Authority "provides a layer of insurance for something that cannot be insured—the unforeseeable." 

Key Takeaways

  • Unparalleled Asset Protection: A Cook Islands Trust offers robust asset protection, shielding assets from creditors, lawsuits, and foreign government court orders, ensuring high security and confidentiality.

  • Legal and Structural Advantages: Established under the Cook Islands International Trusts Act, these trusts benefit from strong legal precedents and favorable jurisdictional laws, with the added protection of combining a trust with an LLC.

  • Comprehensive Benefits: Cook Islands Trusts provide tax optimization, estate planning, financial privacy, and flexibility in trust arrangements, making them ideal for high-net-worth individuals seeking to protect diverse assets.

Cook Islands Trust Case Law

The International Trusts Act 1984 and the amendment 1989, the Cook Islands were the first jurisdiction to include asset protection planning features in its trust legislation, a precedent that was soon to be copied by several other highly secure jurisdictions. The amendment was designed to protect clients from frivolous lawsuits at a time when no other jurisdictions in the world could. The asset protection trust act remains the foremost asset protection amendment in the world devised to protect the assets of the client under all manner of circumstances.

The Financial Supervisory Commission in the Cook Islands states that there are nearly 3,000 trusts, all of which offer full anonymity as well security from creditors and legal suits. The multi-layered foreign trust structure gives both full protection and anonymity for both the beneficiaries and the settlor. Both offshore finance experts and we at Offshore Protection agree that the Cook Islands have the strongest asset protection trusts in the world, a claim that no other jurisdiction can make.

estate planning with cook islands trust

How Does A Cook Islands Trust Protects Your Assets?

A Cook Islands trust protects your assets under duress which is when you need it most. As the strongest asset protection vehicle currently in the market today it has the ability to withstand any type of legal threat. Using such a trust together with an LLC provides you with a bulletproof asset protection plan that makes it virtually impossible to break.

Using an LLC with a Trust gives you maximum leverage, as the LLC owns the assets transferred, creating another layer of protection. A Trustee is legally obliged to follow the trust deed and can not hand over assets to a foreign court. There are significant geographical and procedural barriers that prevent creditors from accessing a Trust.

Even the U.S. Federal Trade Commission has tried twice to gain access to trust and has failed - twice.

The difference between a domestic asset protection trust and an offshore asset protection trust like the Cook Islands is that domestic trusts are held in the same country where you reside and must abide by local court rulings and judgments in the Cook Islands legal system. Offshore trusts on the other hand are bound by their own laws, giving your assets a second barrier of protection.

In countries such as Nevis and Cook Islands where there are strong asset protection laws protecting assets held within the country, foreign judgments are non-enforceable and local trustee companies legally can not hand over assets to foreign judgment without breaking local Cook Island laws making them liable to heavy penalties and fines an excess of 100,000USD. In order for a creditor to pursue his/her claim against the trust, they must file a local claim in a local Cook Island legal system. Formidable asset protection laws in overseas countries are what make foreign trusts superior to domestic trusts as they use the the legal system and the seperation of powers to their advantage.

Advantages of a Cook Islands Trust

A Cook Islands Offshore Asset Protection Trust has many benefits including:

  1. Robust Asset Protection – The primary benefit is shielding assets from future claims, lawsuits and creditors. Cook Islands law makes it extremely difficult for creditors, litigants or foreign courts to successfully access or seize trust assets. In order to reach assets a creditor is forced to use legal means within the Cook Islands where there are significant barriers to prevent frivolous claims. Asset protection trusts are irrevocable trusts. Many barriers to litigation created by the International Trust Act
  2. Remote friendly - Assets do not have to be physically located in the Cooks Islands.  All business transactions can be conducted electronically
  3. Defendant-Friendly Jurisdiction –The Cook Islands are 'defendant friendly'- protecting clients who reside in potentially “creditor friendly” legal jurisdictions. The burden of proof rests heavily on plaintiffs, not defendants. Discovery is limited and the judicial system favors protecting trust assets. Foreign governments have no authority over an overseas trusts. 
  4. Airtight Confidentiality – Settlors, trustees, and beneficiaries remain completely anonymous. The court cannot compel disclosure of confidential trust documents or information. Trust deeds are not publicly registered. 
  5. Short Statute of Limitations – Lawsuits against the trust must be brought quickly within 1-2 years or claims will be permanently barred, deterring fraudulent conveyance suits.
  6. Flexible and Private – Trust terms can be tailored to the settlor’s specific objectives and changed privately without a Cook Islands courts approval. Trusts can last multiple decades. Dynasty trusts are allowed. Allows a variety of trust arrangements such as dynasty, purpose, and charitable trusts. Flexible trust structure. No requirements to file the trust deed with the Registrar
  7. Tax Advantages – No local taxes apply to capital gains, income, distributions, or assets of Cook Islands trusts, optimizing tax treatment.
  8. Reliable Trustees – Only qualified, licensed Cook Islands trustees can be appointed, ensuring professional trust administration. Custodian Cook Islands trustees permitted
  9. Foreign Judgments Not Enforceable – The Cook Islands does not recognize foreign judgments and they have no authority over Cook Islands trusts. Court orders in foreign countries do not have jurisdiction nor can they have control over foreign citizens (your offshore trustee). Foreign bankruptcy is excluded

Fraudulent Conveyance

This is an important amendment that was enshrined within the Cook Islands International Trust Act. The legislation outlines a solvency test, which determines fraudulent conveyance, requiring a strict timeline and details for the creditor to pursue their claim. Similarly, the standard of proof required for fraudulent transfer is that of a criminal act, and must be 'beyond a reasonable doubt'.

Any claim of fraudulent transfer against the trust must be done within the statute of limitations which is a two-year period. This means that if the transferring assets were deposited longer than two years then the statute is passed and no claims can be brought forward to court. This is a significant barrier to entry and ensures that only the most determined creditor will continue to pursue the case. Usually what happens is that all claims are negotiated outside of the courts.

Why Do People Have A Cook Islands Offshore Trusts infographic.jpg

Why Do People Have a Cook Islands Offshore Trusts?

The primary reason for forming a Cook Islands asset protection trust is to protect your assets from lawsuits and other dangers. We already discussed the powerful protective mechanisms offered by Cook Islands trusts, which makes them highly suitable as asset protection vehicles.

In addition, there are other benefits and uses of Cook Islands trust, such as to optimise estate planning, legally reduce taxes, open new investment opportunities, and maintain financial privacy. 

To summarise, some of the most popular uses of a Cook Islands trust include:

  • Protecting assets from a divorce
  • General asset and investment protection (inc. bank accounts, equities, bonds, etc.)
  • Protecting real estate and other tangible assets
  • Protect liquid assets
  • As a way to protect assets after a lawsuit
  • Protecting assets before marriage (this is more effective than protecting assets after a divorce, as assets placed in the trust before marriage are extremely difficult for the spouse to claim)
  • Estate planning
  • Protection of business sale proceeds
  • Tax optimisation
  • Access to new investment opportunities through the trust

Cook Islands Offshore Asset Protection using a Trust

A major advantage of using an offshore Cook Islands trust for asset protection is the treatment of foreign judgments. Creditors face immense challenges trying to access trust assets held in the Cook Islands compared to domestic structures.

The Cook Islands has stringent laws that set a high bar for claimants seeking to penetrate an offshore trust. The legislation strongly favors protecting assets within the trust from outside parties. Holding assets locally where you reside leaves them far more exposed to creditor claims. Placing them in an offshore trust gives them the strong protections granted under Cook Islands law.

Attempting to unlawfully break into a Cook Islands trust would violate local prohibitions on disclosing confidential trust information. The nation's sovereignty shields trust assets. If a foreign entity tried seizing trust assets, it would infringe the rights of the trust and breach Cook Islands laws. Foreign rulings carry no weight in the local court system.

Claimants must bring litigation locally and definitively prove fraudulent transfer within an abbreviated 1-year statute of limitations. This high evidentiary legal burden deters most claims from proceeding. The formidable legal barriers protecting offshore trust assets give them a key advantage over domestic structures vulnerable to local judgments and creditors. Offshore protection adds a critical layer of insulation from threats.

cook islands is the best for asset protection

Who Can Establish a Trust?

Generally speaking the following situations and people are likely stand the benefit the most from a offshore trust.

  • High net worth individuals concerned about liability
  • Those in high-risk occupations like healthcare, law, journalism, public personalities
  • Entrepreneurs and business owners
  • Real estate investors and landlords
  • Cryptocurrency traders and investors
  • Those concerned about future potential lawsuits
  • Individuals considering expatriation
  • Those inheriting substantial wealth


Learn How To Protect Your Assets With The Strongest Offshore Asset Protection Structure In The World.


Individuals planning on creating an estate or family plan benefit from the fact that in the Cook Islands trusts exist in perpetuity as a "dynasty trust" than for a finite period of time, such as 20 years, as is the case for many offshore trust jurisdictions that limit the life of the trust. This allows you to own and hand down the trust to future family members for generations.

What Can You Hold in a Cook Islands Foreign Trust?

Cook Islands trusts can contain a diverse array of asset types, including:

  • Publicly traded securities like stocks and bonds
  • Alternative investments like private equity or hedge funds
  • Real estate assets such as personal residences and commercial property
  • Life insurance policies with the trust as beneficiary
  • Operating business entities or ownership stakes
  • Investment Portfolios
  • Any type of financial assets, investment accounts
  • Intellectual property including patents, trademarks, and copyrights
  • Crypto-assets like Bitcoin and Ethereum
  • Royalties and licensing agreements
  • Physical assets like jewellery, collectibles, boats, and art

Key Corporate Features

Cook Islands Trust Corporate Details
Type of Entity International Trust
Type of Law English Common Law
Governed by International Trusts Act 1984
(Amended 1989)
Our time to establish a new company 3 days
Corporate Taxation No
Access to Double Taxation Treaties No
Share capital or equivalent  
Standard currency New Zealand Dollar (NZD)
Permitted currencies Any
Minimum None
Parties to the Trust  
Minimum number One
Publicly accessible records No
Corporate shareholder allowed No
Location of meetings Anywhere
Recurring Government Costs  
Minimum Annual Tax / License Fee  USD 100.00
Annual Return Filing Fee Covered by a licensed trustee company

How Much Does It Cost to Set up a Cook Islands Asset Protection Trust?

The total cost for a Cook Islands trust is $15,000 trust which includes a Nevis LLC. We can provide competitive rates, primarily because we are a non-US based law firm. While most US lawyers charge outrageous fees, we have the ability to do so at a fraction of the cost.

You will find many times you will find trust providers or law firms quote upwards of 20,000 - 50,000 USD which is likely that they receive a substantial commission. We have been creating trusts in the Cook Islands for 25 years and as a result have prices that are very competitive, with a legal team and a group of attorneys who have been doing this for years. 

The fees vary accordingly from USD$1,000-5000 for registration and administration as the Cook Islands Trust requires the services of a trust company located in the Cook Islands. There are also yearly fees which usually are several thousand dollars per year.

The expenses involved in forming and maintaining a Cook Islands trust depend on each client's specific circumstances and needs. There are two primary cost components:

Initial Formation Fees

The starting costs mainly derive from professional services like legal consultations, drafting the customized trust deed and supporting documents, completing all registrations, and establishing the structure.

how to set up a trust in the cook islands

Ongoing Annual Maintenance Costs

Once established, clients pay annual fees to cover trust administration, trustee services, account administration, and meeting all legal requirements.

This normally totals $6,000 or less per year. Costs are fixed, not a percentage of assets. Maintenance costs cover:

  • Licensed trustee fees
  • Government registration fees
  • Registered agent charges
  • Accounting and asset management
  • Administrative overhead

Factors Impacting Costs

Variables that may influence costs include:

  • Complexity of trust structure
  • Customized terms and asset types
  • Whether ancillary entities are utilized
  • Number of beneficiaries
  • Extent of professional services engaged

Consulting experienced advisors provides accurate cost estimates tailored to your specific trust needs and objectives. With proper planning, Cook Islands trusts provide invaluable protection at reasonable fixed costs. 

how to setup a cook islands trust infopgraphic.jpg

How to Set Up a Cook Islands Trust?

Forming a proper Cook Islands trust requires meticulous adherence to legal formalities and compliance. The key steps include:

  1. Consult Experienced Legal Advisor - Engage qualified asset protection attorney to provide guidance on optimal trust structure, provisions, and terminology tailored to your objectives.
  1. Appoint a Licensed Trustee Company and Registered Agent - Select a reputable Cook Islands trustee licensed in the jurisdiction along with a registered agent to administer the trust.
  1. Draft the Trust Deed and Ancillary Documents - Work closely with counsel to carefully draft the trust deed, letter of wishes, affidavits, deeds, and all other required documents.
  1. Transfer Assets into the Trust - Formally transfer ownership and title for all assets being placed into the protective trust.
  1. Open Trust Bank Accounts - Work with the trustee to establish appropriate local or foreign bank account to manage the trust's finances.
  1. Register Trust Documents - Submit properly executed trust documents to the High Court Registry for activation and legal effect.
  1. Obtain Certificate of Formation - The High Court will issue a certificate verifying the trust's valid establishment once registered.
  1. Ongoing Trust Administration - The trustee now manages the trust assets, distributions, records, filings, and all administration.

Individuals will also need to go through proper Know Your Customer (KYC) checks in order to satisfy international money laundering regulations.


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Trust Formation Documents

The key documents required to establish a Cook Islands trust include:

  • Trust deed - The governing document outlining all trust terms, parties, and provisions.
  • Letter of wishes - Settlor's distribution desires to guide the trustee.
  • Sworn Affidavit of solvency Certificate - Each settlor must sign a sworn affidavit of solvency statement indicates the transfer of assets an individual or entity is about to make will not render that individual or entity bankrupt or insolvent.
  • Deed of indemnity - A deed of indemnity is a document that is a legal agreement between a company and a company director of how a company will indemnify a company director, including costs, rights, and insurance agreements.
  • Trust information form - Collects settlor, beneficiary, asset, and term details.
  • Evidence of initial trust property - Documentation showing asset transfer.
  • Party identity verification - Trustee and settlor identity documents.

Proper drafting and execution of these documents is essential to forming a valid Cook Islands trust able to withstand legal challenges. 

Cook Islands Trust & Nevis LLC Combination

We recommend that a Cook Islands Trust be used in a combination with another legal entity, with a Cook Islands Limited Liability Company or a Nevis Limited Liability Company for maximum protection, flexibility, and to further diversify your trust’s structure. While the LLC is held by the trust, the foreign trustee (being an entity or person, preferably located in the Cook Islands) holds the title.

The manager of the limited liability company—you—are able to have legal control over the LLC and the authority over any bank accounts that might be affiliated with it, in such a way that you still have control of your assets, with provisions made for times of duress, which state that a trustee manages and protects the trust's assets. The Trustee then removes the individual as a manager from the limited liability company during times of legal duress whereby a successor in a separate country is used which gives a second layer of protection (in comparison with a domestic trust) instead of having them all located and controlled in a single country.

Go here for more information: Cook Islands Trust and a Nevis LLC 


how to structure a cook islands trust

How to Structure a Trust? 

There are four different parties to a Cook Islands Offshore Trust.

  1. Settlor—The person who establishes and whose assets are put into a trust
  2. Trustee—Are those that hold the title to the assets and administer the trust
  3. Protector—This is a person who oversees the operation and appoints trustees
  4. Beneficiary—A person or persons who benefit from the trust, which can include any person that the settlor wishes

Parties to a Trust

  1. Settlor -The Settlor would be you, and you would place your assets in the hands of a trustee who manages the trust.
  2. Trustee - Your assets, which are managed by the trustee, must reside in the Cook Islands and therefore are not subject to the legal jurisdiction in which you live. Trustees are regulated by the Financial Supervisory Commission in Cook Island and are legally bound to protect the assets of the settlor for the beneficiaries.
    • The trustees hold the legal title to all the assets within the trust, though they cannot benefit from the trust. The point of a trustee is such that under times of legal duress when a court requires that you hand over your assets, the trustee then becomes your fail-safe. The trustee, who resides in the Cook Islands, is not subject to a court mandate and can simply refuse. Legally, the trustee can only distribute the funds for the benefit of the beneficiaries.
    • Multiple Trustees - A settlor can establish a Trust with several trustees used for the management of the assets. Though a single trustee may be used so that the settlor may keep a close watch over the trust and for easy management, which can later change if needed. A domestic trustee may be appointed, however, in the event of a lawsuit or any legal claim against the settlor’s assets the flexibility of the structure allows the trustee to change hands to that of a sole trustee located in the Cook Islands, therefore giving the assets the due protection
  3. Protector - A trust protector, appointed by you, is the one who gives oversight; though is optional, adds another dimension of stability and security for the trust, as the person is someone you likely trust, whether a family member or attorney, as they are given the power to appoint trustees and veto any actions that the trustee might make on behalf of the settlor (you).
  4. Beneficiary - The beneficiaries would likely be you, and anyone in your family (or anyone) and they are the ones who gain to benefit from the trust.

cook islands corporate taxation of a trust 

Taxation of a Cook Islands Trust

A trust in the Cook Islands is liable to zero taxation of any kind in the Cook Islands. As it is an offshore trust it is not liable to taxation by the Cook Island government. The only place you need to pay taxes is in the country where you live (depending on your country's tax laws).

An asset protection trust overseas does not free you from any tax responsibilities. Even though you are not obligated to pay taxes within the Cook Islands you are still obliged to in the country where you reside, if applicable. How much taxes you are required to pay depends upon the local tax codes of the country where you live and the laws that govern ownership of foreign entities. Any income generated within the trust is liable to be taxed only in your home country and it is the client's duty to report any such financial information in your home country.

There are no taxes in the Cook Islands including:

  • No gift tax
  • No estate tax
  • No excise tax
  • No income tax
  • No capital gains tax
  • No local taxes of any kind 


A Cook Islands trust has a name for itself as being the world's strongest asset protection trust in existence, however, not everyone needs it. There are several cheaper alternatives to a Cook Island Trust, most notably a Belize Trust and Nevis Trust which can be found at a fraction of the price, however, none can really compare in terms of asset protection mechanisms and its barriers in pursuance of creditor claims. Nonetheless there is something for everyone. Get in touch to learn more about what a Cook Islands Trust can do for you.

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***Please Note: If you are a resident of a country that is a signatory of the Common Reporting Standard (CRS) (or a US citizen) your tax reduction possibilities are limited. Due FATCA, CRS, and CFC laws you may not be able to completely eliminate your taxes without moving your residence. While opening an offshore company can increase privacy and asset protection, your tax obligations remans tied to your ownership of overseas entities. Offshore company's are often not taxed in the country where they are incorporated, rather you as the owner are obligated to pay taxes in the country where you reside. Please make sure you know your tax obligations, as we are not tax advisors. Please seek a local tax professional for help regarding your situation. 

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