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The Cook Islands is an island nation located in the South Pacific Ocean. While tourism continues to be the main industry, offshore banking has played an increasingly important role in the Cook Islands’ economy.
Starting in the 1980’s the Cook Islands became an important location for offshore asset protection trusts. Thanks to its laws protecting foreigners’ assets from claims occurring in their home countries, the Cook Islands continues to be the leading jurisdiction for offshore asset protection.
While assets held by a Cook Islands Asset Protection Trust do not need to be physically located in the country, it does require an acting trust administrator or trustee in the Cook Islands. For this reason, a variety of qualified trust companies have emerged to meet this growing need.
Since the Cook Islands is at the forefront of offshore asset protection, trust companies doing business there must be of the highest caliber, as they serve the needs of high-net-worth clients from the United States and elsewhere.
In this article, we will discuss important information regarding the different professional trustee companies operating in the Cook Islands.
Trust companies are legal entities that are authorized to act as a fiduciaries, agents, or trustees for the purpose of administration, management, and transfer of assets to a beneficiary.
The trust company acts as an administrator of the trust assets in accordance with the terms of the trust document. Once the trust is settled and funded, the trustee is essentially at the driver’s seat when it comes to the management of its assets.
Despite the significant physical distance, trust companies in the Cook Islands are not drastically different from those operating in the U.S.
In the Cook Islands, all trustee company businesses are regulated by the Financial Supervisory Commission and are subject to the provisions of the Trustee Companies Act 2014. The Financial Supervisory Commission in the Cook Islands is an independent government agency in charge of the supervision of regulated financial entities and financial services in the Cook Islands.
It is the licensing authority for all financial institutions such as banks, insurance companies, money-changing, and trustee companies.
Once assets are placed into the trust, it is up to the trustee to safeguard and manage the trust assets. The trustee, however, is not free to administer the trust assets as they see fit, they are always bound by the terms of the trust they agreed to serve.
In the case of an offshore trust located in the Cook Islands, only a judicial order from a court located in that country has legal effect. If a court order is issued in the U.S. or elsewhere the trustee has discretion on whether to obey or not.
Since asset protection trusts contain provisions shielding the trust assets from foreign court orders, the offshore trustees are usually bound NOT to follow a U.S. court order requesting the disbursement of trust funds to pay for a lawsuit or claim.
While a U.S. court could try to force the settlor or the beneficiary of the trust to pay, it is ultimately up to the trustee how to handle any assets held in trust, and a trustee located in the Cook Islands is well beyond the reach of the U.S. courts.
This gives the Cook Islands Trust a tremendous advantage in the field of asset protection. It also places tremendous emphasis on the right choice of trustee, as they might one day be forced to deal with a situation where a legal threat arises.
When selecting a trustee, it helps to think about who you would want on your side in case of a crisis.
Much like any other fiduciary, a good trust company should have a track record of stability, professionalism, and utmost reliability. After all, they are entrusted to oversee substantial trust funds for their clients.
Qualities like responsiveness and innovation are increasingly important as high net worth clients have come to expect a superior degree of service. Fortunately, thanks to its established reputation as an offshore center, the quality of fiduciaries available in the Cook Islands is on par with those in major financial centers across the globe.
These trust companies might seem similar at first, but there are important distinctions you should be aware of if you are considering a Cook Islands Trust. Naturally, each company has its own history, workplace culture, and ways of doing business.
Some trustee companies are family-owned and local to the Cook Islands, while others are larger global players with multiple offices across the world. Below is a table with additional information regarding many of the trust companies currently operating in the Cook Islands:
Southpac Trust was established in 1982, making it one of the oldest and most prominent trust companies in the Cook Islands. In addition to trustee services, they offer turnkey corporate solutions, estate and succession planning, accounting, banking, and wealth structuring solutions. Southpac provides offshore services in the Cook Islands as well as the Island of Nevis.
Ora Fiduciary/Ora Partners is an innovative and proactive trustee company founded by the charismatic Puai Wichman, a veteran of the offshore asset protection industry. Ora Fiduciary is currently working with the Ministry of Finance and Economic Management of the Cook Islands to develop a “Smart Trust” platform, a promising new blockchain ecosystem for the Cook Islands.
Asiaciti Trust is a family-owned, wholly independent trust company originally established in 1978. Asiaciti has an impressive reputation based on its more than four decades of experience as a trusted fiduciary. The firm also boasts a truly global reach, with operations in Singapore, Hong Kong, the Cook Islands, Dubai, Nevis, New Zealand, Panama, and Samoa.
Portcullis prides itself on being one of the largest independent wealth managers in Asia. The firm began operations in 1984 as a law practice in Singapore. Since then, it has grown to provide trust, fund management and family office services. They remain based out of Singapore and have offices in Hong Kong, Taiwan, New Zealand, and the Cook Islands, among others.
Cook Islands Trust Corporation first became licensed as a trustee company in the Cook Islands in 1988. Its managing director is a licensed attorney in New Zealand and a member of the Society of Trust and Estate Practitioners, a prestigious global organization for lawyers, accountants, trustees, and other practitioners. In addition to asset protection trusts, the Cook Islands Trust Corporation also provides services for foundations and international companies.
Trustees and Fiduciaries is a locally owned and operated trustee company based in the Cook Islands. The company is managed and controlled specifically to protect its clients against the threat of litigation. Trustees & Fiduciaries developed the Relationship Property Act, new legislation in the Cook Islands that allows a trust to keep the assets of high net-worth families intact in the event of a separation.
It can be difficult determining which company is a better fit for you. Naturally, a good fiduciary will have the required authorizations from the relevant regulatory bodies, an impeccable background, and years of experience in the industry.
All the companies discussed in this article certainly meet those requirements. While it may be impractical and prohibitively expensive to visit their physical offices, many of these offshore providers are available for conference calls or videoconferences.
Speaking with company managers or other company representatives can give you a much clearer picture of these companies.
At the end of the day, a trusted company is a service provider. Selecting the offshore trustee that best fits your needs requires time and due consideration. It will ultimately come to the company that can best suit your needs while also putting your mind at ease.
You want a trustee that you can feel comfortable with and can safely depend on. Creating and maintaining a good relationship with the trust company can be extremely helpful, as they will be managing the day-to-day activities regarding the trust.
Trying to figure out the offshore asset protection world can initially feel daunting. After all, many of the biggest companies in the industry are located halfway across the world. Fortunately, thanks to our years of experience in the space, Blake Harris Law has close relationships with many of the companies discussed here.
Our firm can quickly connect you with various premier offshore service providers, whether in Cook Island or elsewhere. In addition, we can provide the guidance you need to make a truly informed decision regarding your asset protection plan.
If you would like to learn more about offshore asset protection, simply click here to connect with an experienced asset protection attorney. We look forward to speaking with you.