The Cook Islands is the most widely recognized jurisdiction for the establishment of international trusts for asset protection. In the past the main purpose for these types of trusts has been protecting assets from frivolous and aggravating lawsuits or claims by third parties. However, it is often claims from spouses that can create a devastating blow to the divorcing parties’ assets and financial well-being.

In response to the rise in litigious divorces and intrafamily legal battles, the Cook Islands has introduced innovative laws to address asset protection in family law claims. In December 2021, The Cook Islands enacted the International Relationship Property Trust Act (IRPTA). With this law the Cook Islands became the first country in the world to enact specific legislation to address this significant gap in estate planning for high-net-worth families.

IRPTA created extensive asset protection benefits thanks to its unique legal solution for safeguarding assets and property in offshore trusts. This law provides a reliable mechanism to protect couples’ marital or relationship assets from the impact of divorce or separation. By utilizing this trust structure, couples can preserve their assets and protect the interests of their families, even through difficult times.

The Cook Islands International Relationship Property Trust

couple with divorce contract and wedding ring on desk

Over the years, Cook Islands offshore trusts have gained popularity as important tools for asset protection and estate planning. Yet, during the emotional event of a high net worth divorce, spouses may overlook the long-term consequences of liquidating a Cook Islands trust to divide their assets. The International Relationship Property Trust Act ensures that assets held in a Cook Islands trust remain intact and protected, even in the event of separation or divorce.

The International Relationship Property Trust Act establishes a distinctive class of offshore trust designed to address potential misconduct in the distribution of marital property during high net worth divorces known as the Cook Islands International Relationship Property Trust (IRPT). This type of trust is designed to provide couples with greater certainty as to the treatment of their assets if they separate or divorce in the future.

The IRPT is designed to protect relationship property from the consequences of separation by requiring that specified property be held for the benefit of a couple and their issue in accordance with the couple’s agreement as set out in the trust instrument. Moreover, the laws of the Cook Islands restrict the recognition of foreign court judgments that interfere with this principle. This is particularly significant for high-net-worth individuals and owners of family businesses, which are vulnerable to the separation or divorce of shareholders.

Benefits of a Cook Islands International Relationship Property Trust

For divorcing couples, this new Cook Islands trust law has significant advantages. In many jurisdictions, including California, divorce courts typically divide marital property equally, which often includes assets held within trusts. Without an agreement between the divorcing spouses, trust assets could be liquidated and distributed equally. However, such liquidation not only erodes asset value but also disregards any future interests of the couple’s children or grandchildren, essentially undermining the purpose of establishing a trust.

Cook Islands trusts offer advantages such as no perpetuity period, confidentiality, non-recognition of U.S. judgments, and a wide range of asset types that can be shielded, including intellectual property, investments, real estate, and even cryptocurrencies.

A Cook Islands International Relationship Property Trust can offer the following advantages:

  • Limiting the ability of the courts to divide and distribute assets held in trust.
  • Preserving the trust assets for the benefit of future generations.
  • Preventing harmful asset sales by spouses lacking financial sophistication.
  • Reducing litigation related to asset division in divorce proceedings.
  • Maintaining confidentiality regarding assets and distributions.
  • Protecting family business assets.

Requirements of a Cook Islands International Relationship Property Trust

married couple filling up requirements for trust

An International Relationship Property Trust must fulfill certain criteria, including the settlors being in a relationship at the time the trust is created, holding jointly owned property within the trust, obtaining independent legal advice, and registering the trust under the International Relationship Trust Act. The trust document must contain specific language, such as declaring the trust as an IRPT, identifying the relationship of the settlors, entering a relationship agreement, outlining the administration and management of relationship property, and incorporating a record of full disclosure or waiver of disclosure, among other provisions.

While the focus is on preserving carefully planned trusts, the law extends its benefits to unmarried couples, those in subsequent marriages, international spouses, and individuals seeking to protect family business assets. An IRPT should ideally be established while the parties agree regarding the plan of their assets. By doing so, the IRPT can proactively control the use and benefits derived from its assets in case the relationship turns disagreeable in the future.

Amendments to an IRPT must align with the terms of the Act and cannot permit the sale of relationship property contrary to the original trust provisions. After the relationship ends, only a Cook Islands court can amend an IRPT. Foreign judgments against an IRPT are unenforceable in the Cook Islands if they contradict the purpose of the Act or order the sale or division of relationship property against the trust’s terms.

As with any other established Cook Islands trust, it is required that the trust be managed from within that jurisdiction. This is often achieved with the help of a professional trustee or trust company. Selecting a trustee is an important decision. Fortunately, a large number of licensed and reputable professional trustees work out of the Cook Islands, many of which have several decades of experience providing excellent service for their clients.

The International Relationship Property Trust is superior to a Prenup and Domestic Trusts

If you are a high net worth individual, you likely already have a prenuptial or postnuptial agreement in place with your spouse. While prenuptial agreements can be valuable in asset protection in case of a divorce, their effectiveness can be limited, as their enforceability depends on the determinations of the court. However, a U.S. court would have no jurisdiction over the distribution of assets held by a Cook Islands trust, making these trusts an ideal asset protection strategy.

While most jurisdictions have laws allowing parties to agree on asset treatment in the event of divorce, these laws typically involve dividing and distributing the assets, subject to court review. Trusts, on the other hand, were among the few structures that enabled assets to be retained and managed for the benefit of the family even if the settlors separate or divorce. Unfortunately, trusts based in the United States have been increasingly vulnerable to being disregarded by the courts.

In recent years, courts have extended their jurisdiction to include assets held within domestic trusts in family property disputes. Since domestic trusts are managed from within the U.S., a state court can obtain jurisdiction over the trustee and the trust assets. This poses a challenge even for well-managed domestic trusts, as courts tend to divide trust assets and distribute them as lump sums to the settlors, disregarding the existence of the trust. This destroys all the careful planning and years of trustee management that went into the trust.

Is an International Relationship Property Trust right for you?

asset protection attorney holding two human figure with gavel on table

Establishing an International Relationship Property Trust can lead to significant wealth preservation for families in case of the dissolution of a relationship. This trust offers a new and unique legal solution for couples to effectively manage their assets in the event of separation or divorce. It allows couples to choose to keep the trust assets intact, in defined shares, and under common management in the event of separation or divorce. Assets owned by an IRPT can be shielded from the jurisdiction of United States courts after the relationship ends.

If you are concerned about the possibility of a future rift in your relationship or would simply like to prevent a separation from becoming a costly and contested legal battle, an International Relationship Property Trust could be right for your situation. The IRPT can also be beneficial for owners of family businesses that could be vulnerable to dissolution if the ownership is split in case of a divorce.


Please note that this summary provides general information and does not constitute legal advice. For specific guidance and advice, you should consult with qualified legal professionals familiar with Cook Islands trust law and your specific circumstances. For more information on Cook Islands International Relationship Property Trusts or any other asset protection solutions please contact Blake Harris Law.

At Blake Harris Law, we focus exclusively on asset protection, and can help you design a plan that is right for you. We work with clients across the world to help protect individuals and families from disputes and litigation. Schedule a consultation online to learn more about how our asset protection firm can help keep you protected from lawsuits and other legal threats.