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    Cook Islands Trust

    EST. 1996

How to Set Up a Cook Islands Trust?

What is a Cook Islands Trust?

A Cook Islands Trust is the worlds leading international asset protection trust located in the most secure offshore trust jurisdiction in the world. A trust is formed under the Cook Islands International Trusts Act amended in 1989 and 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 any and all unknown future political, 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.

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 

"provide[s] a layer of insurance for something that cannot be insured—the unforeseeable." 


Table of Contents:


cook islands trust

Cook Island Trusts Case Law

The International Trusts Act 1984 and the amendment 1989, the Cook Islands were the first jurisdiction to include asset protection 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. This piece of legislation 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.

Cook Island Trust & Nevis LLC Combination

We recommend that a Trust be used in a combination package with a Cook Islands LLC or a Nevis LLC for maximum protection, flexibility, and to further diversify your trust’s structure. While the LLC is held by the trust, the 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 about the: Cook Islands Trust and a Nevis LLC

Cook Islands Trust To Protect Your Assets

A Cook Islands trust is the strongest asset protection vehicle currently in the market today. Using such a trust together with an LLC provides you with a bulletproof asset protection plan that makes it virtually impossible to break. By using an LLC with a Trust gives you maximum leverage, as the LLC owns the assets. 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. 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 a local trustee legally can not hand over assets to foreign courts 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 court. This is why foreign trusts offer superior protection for both personal and business assets.

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A Cook Islands Offshore Asset Protection Trust has many benefits which include: no taxes, confidentiality, asset protection and flexibility making it the most advantageous asset protection structure out there. Other advantages include:

  • Asset are kept out of the reach of creditors
  • Asset protection trusts are irrevocable trusts
  • Court orders in foreign countries do not have jurisdiction nor can they have control over foreign citizens (your trustee)
  • Foreign governments have no authority over a overseas trust
  • 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
  • The Cook Islands are 'defendant friendly'- protecting clients who reside in potentially “creditor friendly” legal jurisdictions
  • Assets do not have to be physically located in the Cooks Islands
  • All business transactions can be conducted electronically
  • The strongest and most tested foundation for an international asset protection strategy
  • Many barriers to litigation created by the International Trust Act
  • Custodian Cook Islands trustees permitted
  • Trust deeds are not publicly registered
  • Allows a variety of trust arrangements such as dynasty, purpose, and charitable trusts
  • Many various forms of investment opportunities
  • There is a two-year statute of limitation if a creditor is to bring any action against the trust
  • Flexible trust structure
  • Foreign bankruptcy is excluded
  • No requirements to file the trust deed with the Registrar

Fraudulent Conveyance

This is an important amendment that was enshrined within the 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 transfer happened 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.

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Why Do People Have Them?

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,
  • 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. 

High-risk individuals that are in high-risk professions such as lawyers, doctors, physicians, business vendors, retirement, and investment portfolios, particularly benefit from an Asset Protection Trust.

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

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 trustee company

How Much Does a Cook Island Trust Cost?

The total cost for a Cook Islands asset protection trust can range between USD $10,000 - 15,000. We can provide the most competitive rates out there, 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.

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How to Set Up a Cook Islands Trust?

In order to set up a trust in the Cook Islands you must include:

  • A copy of passport certified
  • Evidence of funds to transfer into the trust
  • Proof of physical address
  • Banking reference letter

Other Trust Documents include:

  • Trust deed copy
  • *Certificate of solvency
  • *Deed of indemnity

The trust company requires that:

  • The settlor prove that a trust is not being registered for any criminal or fraudulent purposes
  • The company will also provide a registered office and provides the necessary annual re-registration services

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.

Certificate of Solvency

An 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.

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How to Structure? 

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

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.


Safeguard Your Assets With the Strongest Multi Jurisdictional Asset Protection Structure in the World


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.

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Trust Taxation in the Cook Islands

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

Are Cook Islands Asset Protection Trusts Legal?

Cook Islands Asset Protection Trusts are completely legal financial vehicles for asset protection planning. Trusts formed in the Cook Islands comply with international laws and standards for transparency and anti-money laundering, and there is nothing which makes their use illegal.

In fact, many legal professionals agree that a Cook Islands Trust is the strongest legal asset protection vehicle in the world today. 

The media and public opinion often portray offshore trusts as just being a way for criminals to commit fraud, but this is certainly not the norm, especially when it comes to a reputable trust structure like in the Cook Islands.

Cook Islands has numerous regulations and governing bodies in force which apply to its asset protection trusts and ensure that they remain legal and compliant. These include:

  • Anti-Money Laundering (AML) regulations,
  • Combating Financial Terrorism (CFT) systems,
  • The Financial Supervisory Commission (FSC),
  • The Financial Transaction Reporting Act (FTRA),
  • Cook Islands Financial Intelligence Unit (CIFIU).

Are Cook Islands Trusts Safe?

Cook Islands’ government entities and its unique trust regulations work together to ensure that a Cook Islands trust is one of the safest financial vehicles available in the world. Thus, Cook Islands trusts have the major advantage of providing the utmost protection to your assets in a way that is completely legal and compliant. 

In general, asset protection trusts are extremely safe and effective financial vehicles by nature. This is because they remove legal ownership of the assets from the grantor and transfer them to a separate legal entity (the trust).


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At the same time, the grantor is allowed to simultaneously name themselves the sole beneficiary, meaning they retain the benefits of the assets, and for all practical purposes remain in control of the assets they have transferred to the trust.

In addition, they are irrevocable, which means that the terms cannot be changed, and the assets cannot be simply withdrawn by the grantor if the court orders them to do so. This is in stark contrast to revocable trusts whereby the grantor legally retains ownership of the assets. 

In addition to this, there are a number of specific characteristics of a Cook Islands trust which make it especially safe and effective, even when compared to other conventional asset protection trusts. These include:

1. Short statute of limitations of only two years 

“Statute of limitations” is the maximum time period that a creditor has in which to make a legal claim on assets, from the day of the “cause of action”. This means that when the statute of limitations has passed, the plaintiff is generally not allowed to open a lawsuit anymore.

The statute of limitations in the Cook Islands is a mere two years. This means that if more than two years has passed since the event occurred that allows a person to make a claim on the assets, they can no longer do so. 

If this time period has passed, they will also not be able to make a case of fraudulent conveyance, which is defined as deliberately transferring assets so as to put them beyond a creditor’s reach. 

2. High level of protection from foreign court rulings

Even if a creditor does manage to bring a case against you within the short state of limitations period, they will have a tough time successfully claiming any of the assets held in the safety of the trust. 

The Cook Islands’ judiciary system does not take kindly or even recognise foreign court rulings. This is especially the case when it comes to financial matters and claims, such as those related to trusts based in the Cook Islands.

As such, the plaintiff must open a new case in the Cook Islands itself, even if they have already initiated a case in another jurisdiction. 

First off, this itself is an added barrier with additional expenses and complexities which deters most prospective plaintiffs. Secondly, trust law in the Cook Islands is extremely protective towards trusts on its shores, and it is rare and difficult to successfully claim assets held by such a trust. This is confirmed in the strong case law which has upheld the rights and protections of asset protection trusts. 

3. Confidentiality 

A creditor needs to know about the assets you hold in order to make a claim against them.

If you keep your assets in a domestic asset protection trust, it will indeed provide some level of protection, but a quick search by any attorney will be able to identify these assets and link them to your name. 

On the other hand, Cook Islands upholds the sanctity of financial privacy, especially for its trust holders. This will offer you a high level of confidentiality which will make it difficult for creditors to find your assets and thereafter make a claim against them. 

Are There Any Problems with Cook Island Trusts?

It should be clear that Cook Islands trusts are extremely powerful financial vehicles for asset protection, and therefore there are not many problems associated with using them. We have put together a few potential issues to be aware of though:

  • Cost: forming and then maintaining a Cook Islands trust is by no means cheap. There are various things which contribute to the high costs, such as: trustee expenses, bank account fees, brokerage fees, complying with IRS reporting requirements, annual maintenance fees. The total formation costs can easily end up being between $10,000, along with ongoing annual fees of $5,000. This really only makes Cook Islands trusts suitable for very high-net-worth individuals who intend to transfer large sums of capital or assets to the trust. 
  • Unwillingness to give up control of assets: the prospect of relinquishing control of their assets to a trustee is daunting for many settlors, and they feel reluctant to do so. This obviously creates a problem, because it means the trust cannot be properly set up and the assets will remain unprotected.
    • This reluctance comes from a misunderstanding of the level of protection provided by the trust structure and not knowing how to find a reputable trustee. There are trustee companies which provide insurance cover to their clients in the case of negligence or loss arising due to their trustee services. Furthermore, a trustee is legally not able to benefit from the trust. They can only step in and act in the best interest of the trust if the assets are under threat due to a court case for example. They must behave in accordance with Cook Islands trust laws and your instructions as the grantor, and so can never run off with the assets in the trust. 
  • Failure to properly report assets to the IRS and complete federal disclosures: The US has stringent reporting and disclosure requirements that it applies to its taxpayers, which includes all US citizens and residents worldwide. If the grantor and/or beneficiary of a Cook Island’s trust is a US citizen or resident, they must report all assets held by the trust to the IRS for tax purposes. Failure to do so could result in federal tax compliance issues where there could be penalties or even criminal charges. Not even the highly protective Cook Islands trust is completely out of reach of the IRS, so do not make the mistake of thinking your assets held abroad are exempt from these compliance requirements. 

Cook Islands Asset Protection Trust in a Divorce

A Cook Islands asset protection trust is one of the most powerful vehicles available to protect assets. As much as we like to believe otherwise, the harsh reality is that divorces are very common, and oftentimes end in bitterness. If you are a high-net-worth individual, such a situation places your assets directly at risk to claims made by a disgruntled spouse.

Cook Islands trusts place the assets far out of reach of local matrimonial court rulings, and make them extremely difficult for your ex-spouse to lay their hands on. In order to avoid a case of fraudulent conveyance, it is important to transfer the assets into the trust early in the marriage, long before there is any cause for divorce. 

In addition, the Cook Islands has unique legislation regarding the treatment of assets held in a joint trust during divorce. This falls under the International Relationship Property Trust Act.

Under this act, married couples who have formed a Cook Islands trust together for the sake of their heirs or other beneficiaries, cannot simply liquidate these assets upon divorce and share the proceeds, as they would do in the US.

The act protects the assets in the trust and allows it to remain intact for its intended purpose. This has the following benefits:

  • Reduces litigation pertaining to assets during the divorce process,
  • Restricts the power of the court to divide and distribute trust assets during a divorce,
  • Protects the interests of beneficiaries and future generations,
  • Prevents reckless liquidation of assets which would erode their value and lead to a loss of capital,
  • Provides special protection for assets of a family business. 

So, whether you want to protect your personal assets from a greedy and bitter ex-spouse, or you want to put assets away together with your partner for future generations, you can rest assure that the assets will be protected for their intended purpose with a Cook Islands trust. 

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Do You Need a Cook Islands Trust Trustee?

One of the requirements of establishing a Cook Islands trust is to designate a trustee who is based in the Cook Islands. The best way to do this is to use the trustee services offered by a well-known Cook Islands Trust Company (see below). This will include full insurance against any losses to your assets caused by the negligence of the trustee.

The trustee will act for the sole benefit of the trust and its beneficiaries, and follow your instructions unless they need to step and protect the assets in the trust due to a court ruling against you as the settlor to hand over its assets.

This is the only time in which they can go against your instructions and refuse to hand over the assets held by the trust to the courts. 

What is Cook Islands Trust Company?

A trust company is an entity that is able to serve as a trustee or agent of a trust as opposed to nominating an individual trustee.

Trust companies offer many additional benefits compared to an ordinary trustee, as their services extend well beyond just operating as the trustee. In addition, they can:

  • Handle estate settlements and oversee the process of distributing the trust’s assets to beneficiaries,
  • Perform orthodox financial wealth management services,
  • Handle equity transfers and beneficial ownership registration, 
  • Perform other financial services offered by commercial banks and other financial service providers. 

Cook Islands Trust Reviews

Case studies and personal experiences and reviews of Cook Islands trusts show that they have historically been highly successful at protecting people’s assets from lawsuits and other dangers.

There is a wealth of resources available online which speak of the high efficacy of Cook Islands trusts for asset protection purposes.  The Cook Islands trust was the first real offshore asset protection vehicle available and is still widely considered the very best.

A Cook Islands Trust has never been broken into by the US government. Although trusts held in the US have been broken into by US courts. Federal Courts have so far not been able to litigate against a trust as it would have to do so in a Cook Islands court room. 

The Cook Islands generally are not the location people search out for when tried to evade taxes and so its has largely remain free from scrutiny.


A Cook Islands trust has a name for itself as being the world's strongest asset protection trust in existence. There are several 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. Get in touch to learn more about what a Cook Islands Trust can do for you.


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*Note for U.S. citizens: US citizens are limited in their tax reduction possibilities due to FATCA and CFC laws. Opening an offshore company can increase privacy and asset protection, but you can not eliminate your taxes without giving up your citizenship. If you are a US citizen you are obligated to pay taxes on all worldwide income. Read more here about FATCA and CFC laws.



Disclaimer: Offshore Protection strives to keep information on this website updated, however, laws and circumstances are subject to change. All information on this website is for reference purposes only and does not constitute legal or tax advice. Contact Offshore Protection for specific advice regarding your situation.

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