Cook Islands trust law is internationally recognised as giving the highest level of protection for family wealth

In 1989 the Cook Islands became the first country to enact a comprehensive set of laws protecting the assets of trusts from 3rd party creditors. Although many jurisdictions have now copied parts of our law, these are piecemeal, and incomplete, leaving transfers of assets exposed to challenge. 

Cook Islands law is internationally recognised as giving a Settlor the highest level of protection of any jurisdiction, with more than 30 years of Court decision defining what can and cannot be done. Unlike other offshore jurisdictions, asset protection trusts dominate all other offshore business in the Cook Islands.

Family trusts are used in most English law jurisdictions to provide protection of core wealth across generations against financial misadventure. This objective is continually under threat from new law extending creditor rights and remedies. Investors may lose not only the funds they invested in a project, but also expose other unrelated assets and wealth to creditor action.

Cook Islands law is old law, several years behind the law of more developed countries, and this time difference gives considerable advantage to a trust settled in the Cook Islands. The International Trusts Act 1984 codifies much of this older Cook Islands law, at the same time as insulating it from newly developing doctrines which are not appropriate in the Cook Islands. This legislation was unique at the time and has withstood the test of time despite numerous challenges in both Cook Islands and foreign courts.

We provide specialist services to international clients in this area, both in advising on establishment of trusts and in acting as a professional trustee.

There are several structures designed to allow the settlor to continue investment via the APT with confidence.

Sole Trustee holding assets directly

Trustees and Fiduciaries act as sole trustee, holding investment accounts with a bank or brokerage house outside of the onshore jurisdiction. Any assets attracting liability are held via an LLC or IBC.

Private Trustee Company (PTC)

Instead of appointing T&F as trustee of a family trust, a client can form an International Company to act as a private trustee company (PTC). A PTC can be managed by the client and can act as the trustee for upto 3 family trusts. In the event of litigation against the client, the client must relinquish control over the PTC. THis structure is attractive to clients who are required to stay involved in management of the assets of their trust.


Trustees and Fiduciaries act as a co-trustee together with an onshore person selected by the settlor. The duties of the co-trustees may be divided between them. There are 2 relationships given statutory recognition:

  • Custodian/Managing Trustee – The custodian trustee (normally T&F) holds title to trust assets, while the managing trustee (normally the settlor or his advisor) is responsible for managing the investment activity of the trust.
  • Advisory Trustee – An advisory trustee (normally the settlor or his advisor) is authorised to give advice to the trustee on any matters, but does not qualify as a trustee. Meanwhile the other trustee is excused from liability if it acts in accordance with the advice of the advisory trustee.

Using a domestic US Co-trustee

Unless a client forms a Private Trustee Company (“PTC”) to act as trustee, then it is necessary for a Cook Islands APT to have a Cook Islands licenced trustee company as either a sole or co-trustee. There are advantages to having a US trustee company to be appointed as a co-trustee of an APT alongside a Cook Islands trustee company. The main advantages are;

  • the client has easy access to the US co-trustee,
  • the Cook Islands co-trustee is likely to delegate active management of the trust assets to the US co-trustee, and
  • the US co-trustee will have easier access to US financial services.

The disadvantage of this structure is that when (and if) a threat to the assets develops, then the US co-trustee must be removed as otherwise this might expose the trust assets to a US judgment. The Cook Islands trustee then becomes the sole trustee in charge of defending the trust assets against any threat.
If you would like to learn more about how T&F can help you with your estate planning needs using Cook Islands law, contact us online via our contacts page.