Cook Islands Trust for Assets Protection? Yes or No?

[banafinfodafuggiano]

Cook Islands Trust for assets protection? Yes or No?

If your company is based in UK/AU/EU , trading legitimacy and paying all taxes,
and you are looking for a 100% bullet-proof solution to protect your hard earned money from potential
debt collectors, ex-wives or the government. How would you set it up and why?


I heard the Cook Islands trusts are every good, but what does that mean?
Under what excuse do you send your company funds to this trust?

Can a court judgement still order you to pay that money to the debt collector/ex-wife/kids/government even if they are held in that trust?

 

[JustAnotherNomad]

I'm not an expert on this, but the way I've understood it is that you‌ personally usually wouldn't own any assets.
You could be the director of the company, but‍ not a shareholder. The company would be owned by the trust/foundation.
So if your ex-wife⁠ is awarded 50% of your assets - she won't get anything since you don't own⁤ anything.
The risk is that, in order for that to work, you can't control the⁣ trust/foundation, so you would have to grant irrevocable (!) control over your assets to someone⁢ else. There may be some solutions to reduce the risk of misuse, but some risk︀ always remains:

https://www.independent.co.uk/news/...neficiaries-trustees-legal-laws-a8239956.html
And when it comes to the government going after you, especially the︁ taxman, they usually wouldn't care about your trust and just say the assets are yours︂ anyway. And possibly even throw you in jail until you pay up.
In Europe, many︃ countries (at least countries that follow civil law) don't recognize trusts, and usually also don't︄ recognize foundations from outside Europe. That's why Liechtenstein foundations are quite popular - they are︅ recognized even by high tax EU countries. But they're also more expensive (12-15k per year).︆

If you're not involved with Europe, I guess an offshore trust could work. Maybe somebody︇ else with more experience can give some input.

 

[Davis123]

In case︇ of Cook Islands in a case I read earlier even US tax dept was not︈ able to get the assets as trustee refused to pay distributions to the one who︉ donated the money to the trust and US govt arrested that couple too with courts︊ forcing them to pay but trustee due to duress clause refused to pay the court.︋

 

[JustAnotherNomad]

So what happened? They were released or are they still in jail?

 

[Davis123]

Trustee never released the funds. They were released after punishment. Weren't allowed to‌ leave the country.

 

[Davis123]

In days of FATCA everything has changed. This case was before FATCA came‌ into existence. These days US can just freeze usd correspondence account of the bank holding‍ those assets and they are doing that since 2010. Matter resolved 😉

 

[Silvio]

From what I understand you need to relinquish control of the assets to a trust‌ run by a professional trustee which follows your "letter of wishes". But the issue is‍ that you lose control of the assets, but then can also claim that you don't⁠ own the assets so they can't be taken from you.

Apparently in Cook Islands there⁤ are clauses which forbid the trustee from breaking the trust under duress (foreign court demanding⁣ the assets etc)

You need to do it a few years AHEAD of problems with⁢ your wife\debtors, otherwise it will be deemed invalid. But I'm not an expert on this︀ subject so looking forward to some replies from the more knowledgeable users in the forum.︁

 

[Davis123]

Basically you can't use this clause anymore for tax purposes︂ yes you can use it to avoid a greedy wife's lawyer chasing your assets. 🙂

 

[newNomad]

Can you pls elaborate? Where did you get the info from?

 

[Davis123]

Well this is what FATCA encompasses. US govt can simply freeze the USD correspondence‍ accounts of any bank and it has before.