A Cook Islands Trust is the strongest form of asset protection worldwide. The Cook Islands are located South of Hawaii. It has the strongest asset protection case law history in the world. It is not just a theory but each time it has been tested it has protected the client’s assets…even in two cases where the strongest legal body in the world - the US government - was the plaintiff. (Note: We will not intentionally set up asset protection from the US government, so we’re simply stating a fact.)
Here is how it works. A judge in your jurisdiction says, “Hand over the money.” You write a letter to the trustee letting them know the courts have ordered repatriation of the funds. The trustee is bound by the terms of the Cook Islands Trust. The asset protection trust says that the trustee is forbidden to release funds when the beneficiary is under court order. Thus the trustee, who is outside of the US judge’s jurisdiction says, “No, not going to.” You are not held in contempt of court because you are following the judge’s orders. You are in a position of “impossibility to act,” which is a valid legal defense.
Before the “bad thing” happens, the client (who is the beneficiary of the trust) is in the driver’s seat. So client can control day-to-day activities, we establish a limited liability company that is 100% owned by the trust. The client is the Manager of the Nevis LLC who controls the LLC assets and is the signatory on all accounts.
When the “bad thing” happens, the trustee steps in as manager of the LLC. Now, the trustee is licensed and bonded. By licensed we mean they went thorough intensive background checks to get a license. By bonded we mean that the funds are insured. Plus we use a 30-year old trust company.
For client safety and peace of mind, the only time the trustee steps in is when the courts would take the money. So, the question is this: What would you rather have, a 100% chance of the money being taken by the courts? Or would you rather have a licensed, bonded trustee, who has never taken a client’s money, do what you have paid them to do - protect your money?”
When the “bad thing” goes away the string of control – the management of the Nevis LLC – goes back to you and you are back in the driver’s seat with all of your money in-tact.
In the mean time, during legal duress, if you have bills, the trustee can pay them for you. You can have the trustee pay a trusted friend or relative who provides money for you, etc. So, you still have access to your money, but the courts do not.
The bottom line is that everything you’ve worked so hard for is safe and secure.
The best asset protection the trust provides is for liquid assets held offshore. The local judge has jurisdiction over local bank accounts and real estate. So, you can put real estate in the Nevis LLC that’s owned by the trust - or record a lien against the property payable to the Nevis LLC. Then, when the bad thing happens it’s better to sell real estate that you don’t want to sell than to lose it all together.
We set up many Cook Islands trusts for law offices or directly for businesspeople who are in need of asset protection. We can also place estate planning provisions into the trust. Upon your passing, the beneficial interest in the trust can be passed on to children or others.
Rarely, some clients may bring up The Anderson Case where the people associated with the Cook Islands trust went to jail for a short time for contempt of court. The reason they did is because the attorney set up the trust WRONG. The attorney who drafted the trust made the client both the beneficiary (who “owns” the trust) and the protector (who can direct the trustee). In other words, the attorney made a big mistake when he wrote the trust. The US court claimed that since the beneficiaries were the protectors they created the “impossibility to act” themselves. But the GOOD news is…even though the trust was set up wrong…it still protected the client’s assets. The case then, in turn, was transferred to Cook Islands courts where the trust asset protection was upheld. This is a testament to the strength of the Cook Islands trust. Even when it was poorly drafted, it still protected the assets.
Beware of one particular service provider who does not tout the tremendous benefits of the Cook Islands Trust. He offers a questionable domestic trust structure and, therefore, downplays all other options. He turns a blind eye to the tremendous case law behind the Cook Islands trust and the resultant asset protection. The issue with domestic trusts is that it is under the jurisdiction of the domestic judge. So, with the tremendous asset protection benefits shown in the Cook Islands, most experts in the industry, who do not have a hidden ulterior motive, agree that the trust structure discussed herein offers the strongest asset protection worldwide.
Call us for more information or to establish a Cook Islands Trust, Nevis LLC and offshore account.
Call us toll free at 800-830-1055. International callers may call1- 661-253-3303