Why are the Cook Islands regarded as a jurisdiction of choice in terms of asset protection? The strength of the Cook Islands offshore jurisdiction is in its ability to pass laws to meet the needs of today’s society. The Cook Islands has used this ability to focus on what is an essential, but often neglected, element of wealth planning – the protection of assets – making it an industry leader in the preservation and protection of wealth. The Cook Islands has developed within its trust, foundation and company laws a wealth protection framework to benefit all HNWIs. What makes Cook Islands trusts unique? Cook Islands trust law is derived from English common law, as modified by the International Trusts Act 1984 (‘ITA’). In 1989 the ITA was amended to introduce comprehensive asset protection provisions seeking to protect the rights of individuals whose wealth is exposed to those who may attempt to take it by force, litigation or legislation whether through illegal, unethical or immoral means. The new laws were innovative and ground-breaking at the time, their success reflected in the number of jurisdictions that have since copied them in part or in whole. The asset protection features of the ITA include: Foreign judgments – a Cook Islands court will not recognise any judgment that is based upon any law inconsistent with the ITA or which relates to a matter governed by the laws of the Cook Islands. Any claim against assets in a Cook Islands international trust must therefore be commenced de novo in a Cook Islands court. Forced heirship – no Cook Islands international trust, or any settlement on it, shall be void or voidable, and nor shall the capacity of a settlor be questioned, in the event such trust or settlement may defeat the heirship rights of any person related to the settlor. Wealth Protection in the Cook Islands 48 LAWYER MONTHLY MAY 2023 The Cook Islands have emerged as a significant jurisdiction in the asset protection landscape, owing in part to a unique combination of legislative provisions beneficial for trust settlors. What do these have to offer HNWIs? In this feature we hear from Cook Islands Finance CEO Alan Taylor, who offers a deep dive into the legislative measures that enable the Cook Islands jurisdiction to maintain a competitive presence in wealth protection. Expert Insight
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