Cook Islands Foundation formation, who can do what costs?

VALIDITY OF FOUNDATION

• Foundation is a separate legal entity from its founder.
  
• Foundation is valid even if the law in the founder’s jurisdiction does not recognise or prohibits foundations.
  

MULTIPURPOSE USE

• Foundation can be used for charitable or non charitable purposes, inheritance and estate planning, wealth management.
  

PROTECTION FROM CREDITORS

• 2 year statute of limitations on claims to set aside the foundation or attack the transfer of an asset to the foundation.
  
• Courts cannot recognise or enforce a foreign judgment against the foundation.
  
• Stringent fraudulent transfer rules that make it difficult for creditors to bring a claim for fraudulent transfer.
  
• Foundation stands independent from the founder’s personal circumstances. The foundation cannot be void or voidable in the event of the founder’s bankruptcy, insolvency, or liquidation.
  

MANAGEMENT

• Founder establishes rules that govern the operation of the foundation.
  
• Foundation is managed by a board, allowing for input from a number of relevant persons.
  

OVERSIGHT

• Law recognises someone to oversee the board’s management of the foundation, an ‘enforcer’ or ‘supervisor’.
  

PRIVACY

• Strict privacy laws against disclosure of the affairs of the foundation.
  

INVESTMENT OPPORTUNITIES

• Foundation can derive earning from investments/broad investment powers may be authorised in the foundation rules.
  
• Foundation cannot be used for regular trade or commercial activity.
  

EXEMPTION FROM TAXES

• Foundation and its beneficiaries are exempt from paying tax in the foundation’s jurisdiction.
  

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The Cooks generally disregard foreign court orders, making it easier to keep assets from creditors, or anyone else.
Win a malpractice suit against your doctor? To collect, you will have to go to the other side of the globe to plead your case again before a Cooks court and under Cooks law. That is a big selling point for those who market Cook trusts to a broad swath of wealthy Americans fearful of getting sued, and some who have been.

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