Cook Islands Trust for asset protection, Does it Work??

Ancova said:

Good Morning All!

Here are some details about Cook Island Trusts. Feel free to get in touch if you have more questions.

Asset protection of Cook Islands is recognized as the standard for best protection internationally.

• Forced Heirship
Trust or settlement cannot be voided if it defeats heirship rights of related individuals
Settlor's capacity cannot be questioned.
• Bankruptcy
Trust or settlement remains valid in the event of Settlor's bankruptcy in their home jurisdiction.
• Spendthrift Beneficiaries
Interests in trust assets for beneficiaries cannot be alienated, passed by bankruptcy, or seized.
• Common Law Rules
Abolishes rules against accumulations and double possibilities. Trustee has discretion to avoid the rule in Saunders v. Vautier.
• Perpetuity Period
Abolishes Common Law rule against perpetuities
Trust can exist indefinitely or terminate based on specified events or dates.
• Fraudulent Conveyance
Establishes rules for determining validity of transfers and protecting rights of potential claimants.
• Burden of Proof
Limits creditor's access to specific settlement assets, not entire trust fund Creditor must prove intention to defraud within prescribed time limits.
• Foreign Judgments
Cook Islands courts do not recognize judgments based on inconsistent laws. Claims against trust assets must be initiated in Cook Islands court.

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

• Ø TheSettlorestablishesaCookIslandsInternationalTrust.
• Ø A Cook Islands licenced trustee company provides the
  Trustee.
• Ø The Settlor and family members can be discretionary
  beneficiaries of the Trust.
• Ø A Protector can be appointed to monitor the activities of
  the Trustee, and can be granted absolute or veto powers or
  a combination of both.
• Ø 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.
• Ø The Trust owns 100% of a limited liability company (“LLC”) incorporated in the Cook Islands, or other jurisdiction
  appropriate to the client’s circumstances.
• Ø The Settlor, or his representative, is the Manager of the LLC.
• Ø Assets are held and managed within the LLC or entities
  underlying it.
• Ø The Trustee is not required to be involved in the
  management of the LLC or its assets.
• Ø 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
• Ø The Manager is not personally liable for the debts, obligations or liabilities of the LLC.
• Ø The Trustee is not subject to foreign judgements or forced heirship rules.

Structuring Options

• Purpose trust (charitable or non-charitable)
• Discretionary trust
• Trust with fixed interest beneficiaries
• Any combination of the above
  Possible Control Elements
• Protector
  -Appointed with powers and functions defined in the trust
  instrument
  -Not held liable as a fiduciary, unless stated otherwise in the trust
  instrument
  -Settlor, Trustee, or Beneficiary can serve as the Protector if
  desired
• Co-Trustee
  -In addition to a licensed Cook Islands trust company, an
  individual or entity can be appointed as a co-trustee -Co-trustee doesn't require a license in the Cook Islands to
  engage in trust company business
• 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.
• A Cook Islands International Trust is tax neutral in that it is not
  subject to any form of Cook Islands taxation.
• Anonymity: Each Cook Islands International Trust is registered by providing the Registrar with the names of the trust and the Trustee and the date the trust was established. There is no requirement to file the trust instrument or the names of the Settlor or Beneficiaries.
• Retention of Powers
  -Settlor can retain, possess, or acquire certain powers without
  invalidating the Cook Islands International Trust
  -Powers can include: Amending or revoking the trust; Disposing
  of trust assets; Removing or appointing a; Trustee or Protector; Directing the Trustee or Protector on any matter

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