The Cook Islands International Relationship Property Trust Act 2021 takes a novel and unique approach to the problem of how to protect matrimonial property in the event of a divorce. The Act specifically directs that property settled on a relationship property trust is to remain intact under common management and is not to be divided and distributed to the settlor spouses, upon their separation or divorce. It is designed to give couples the opportunity of taking at least part of their property out of the arena in the event they separate.
The Act is unique-no other country has law which provides for this. It is hoped that this new law will provide a foundation for future growth in the industry for many years to come.
Examples of how a Cook Islands International Relationship Property Trust can be used
MARRIED COUPLE
Domiciled and resident in USA, own their own home, have children, and significant assets generating income surplus to their needs.
- Want to “divorce proof” at least part of their assets for their future security, as well as for the security of their common children and future issue.
MARRIED COUPLE (family business)
A couple domiciled and resident in USA, own their own home, have children, and significant assets generating income surplus to their needs including a substantial business managed by one of the spouses.
- They want to divorce proof” at least part of their assets, and “most importantly, protect the family ownership of the business, for their future security, as well as the security of their common children and future issue.
MARRIED COUPLE (mixed domiciles)
Own their own home, have children, and significant assets generating income surplus to their needs. Example: husband is domiciled in Israel, wife is domiciled in US, residing in UK, resulting in 3 jurisdictions for litigation of any matrimonial property issues, each with own peculiarities, in the event of divorce.
- Want certainty as to treatment of matrimonial property in the event of divorce, to ensure their financial security as well as the security of their common children and future issue, by placing surplus assets into RPT in a neutral jurisdiction
MARRIED COUPLE (mixed domicile/hostile jurisdiction)
Own their own home, have children, and significant assets generating income surplus to their needs. Example: husband is domiciled in Saudi, wife is domiciled in US.
- Want to avoid exposure of assets to Saudi law which limits rights of wife, as well as “divorce proof” part of their assets for their future security as well as for the security of their common children and future issue.
MARRIED COUPLE (property located in different jurisdictions)
Own their own home, have children, and significant assets generating income surplus to their needs. Example: own property in several jurisdictions including Taiwan, UK, and Hungary, resulting in possible exposure of matrimonial property to more than one jurisdiction in the event of a divorce.
- Want certainty as to treatment of matrimonial property in the event of divorce, to ensure their financial security as well as the security of their common children and future issue, by placing surplus assets into RPT in a neutral jurisdiction
GAY COUPLE
Own their own home, and have significant assets generating income surplus to their needs. Reside in a jurisdiction where there is no recognition of property rights outside of marriage.
- Want to ensure proper and fair treatment of both parties in event of separation to ensure their future financial security.
DE-FACTO RELATIONSHIP
Own their own home, have children, and have significant assets generating income surplus to their needs. Reside in a jurisdiction where there is no recognition of property rights outside of marriage.
- Want to ensure proper and fair treatment of both parties in event of separation, as well as ensure financial security for themselves and their common children.
SECOND MARRIAGE
2nd marriage for couple, each with own property and children.
Want to make provision for;
- Assets acquired and developed during new marriage and
- new children born to new relationship over and above other estate planning.
FAMILY OFFICE
Family offices typically manage substantial assets earned by a married couple who are interested in providing for the long term future of their family. The divorce of the founders or of members of their family can negate those plans and result in the assets being broken up and divided amongst the family members.
- An IRPT can be used to ensure the assets remain intact and to ensure the objectives of the founders are met into the future
FOR MORE INFORMATION: Contact Nadine Newnham or visit our our Cook Islands International Relationship Property Trust page.
