Cook Islands trust: how it works and what it costs

What a Cook Islands trust is

It is a trust set up under the International Trusts Act 1984. You transfer assets to the trustee, and the trustee holds them for the people the deed names or describes.

As enacted, section 2 defined an international trust by three elements: registration under the Act, at least one trustee or power holder that is a company of a listed type, and beneficiaries who are non-resident at all times.

Registration is therefore part of the set-up, not an extra step.

Your lawyer confirms how it applies to your deed.

In practice it is used by settlors who live outside the islands; as enacted, the residence condition applied to the beneficiaries.

Many deeds are discretionary: the trustee decides on distributions, guided by the deed and your letter of wishes. The deed may let you or a manager you appoint advise on investments within set limits; your lawyer checks how much control you can keep.

The main roles are few. The settlor creates the trust and transfers assets. The trustee holds them and decides under the deed.

Beneficiaries may receive distributions, by name or as a described class such as your children and their children. A protector, where the deed creates one, consents to key decisions.

People often call Cook Islands offshore trusts asset protection trusts. That is a product name, not a promise. A 1989 amendment inserted sections headed bankruptcy, fraud and foreign judgments. Your lawyer confirms how it applies to your deed.

Whether those rules help in your case is for your lawyer to answer. The sources of Cook Islands trust law and its limits are set out on a separate page.

Who sets one up and why

This structure suits business owners and professionals in fields with high liability exposure who plan well before any claim arises. It also suits families who want assets held under one deed by a trustee outside their home country.

Each case below is a typical use.

Reasons that bring people to this structure include:

• They want a structure their own lawyer has examined against the risks of their work.
• They hold assets in several countries and want one trustee and one set of records.
• They are planning succession and want the trustee to follow written wishes.
• They are comparing island options and want sourced facts, not sales copy.

Every enquiry goes through our client acceptance policy, and we tell you early if we cannot take a case. Counsel at home must confirm that a structure in the islands is suitable and lawful where you live.

Your tax adviser tells you what to report at home. We replace neither of them: we work alongside both from the first message and send them the same drafts we send you.

A trust is not the right tool for every goal, and the first review may show that another route suits you better.

How the set-up works

The set-up runs in a fixed order. Nothing is signed until your lawyer has reviewed the deed and the trustee has confirmed it will act. The order is:

1. Enquiry, then client acceptance and identity checks.
2. Design of the structure with your lawyer, including any holding company.
3. Drafting of the deed and your letter of wishes.
4. Signing, acceptance by the trustee and registration with the Registrar.
5. Transfer of assets to the trustee or to a company the trust owns.

Assets often sit below the trust in a holding company, such as a limited liability company. The trustee then holds shares rather than the assets themselves.

Whether that suits you is a question for counsel. It changes who signs what and where the records sit.

We collect identity documents, evidence of the source of funds and wealth, and beneficiary details first. After that, timing depends on third parties: your lawyer, the trustee, the bank and the registry.

We give you a checklist and a list of open items, not a promised date. A missing bank letter can hold up every later step.

The steps are the same wherever you live, including Asia. The step-by-step formation guide lists the documents the trustee asks for.

What drives the cost and the yearly fees

The cost follows the size and shape of the structure more than the place. We publish the set-up fee for a standard trust or foundation; annual administration, event-based work and third-party charges are quoted after we review your case.

Any figure in an estimate comes from the written terms of the trustee and the law firm.

The main drivers are:

• The number of parties, holding companies and bank accounts under the trust.
• The kinds of assets, since shares in private companies take more work than cash.
• The legal drafting, which grows with every special clause or role.
• The trustee’s yearly work: meetings, resolutions, records and reporting.
• Government registration and renewal charges, which the authorities set, not us.

Tell us which assets you expect to transfer and whether a holding company is involved. Those two answers are the best place to start; the costs page lists the other factors.

A quote is not an offer. The guide to what shapes the price walks through each item and explains how to ask for one.

Cook Islands trust companies and your role

A Cook Islands trust company holds office as trustee, and we are your contact as a settlor living abroad.

Our part is to run the identity checks, collect the documents and prepare the structure with your lawyer. We also handle the administration you see. The trustee makes the decisions and keeps the formal records.

This split matters when something changes, such as a distribution, a new beneficiary or a different protector.

You send us the request; we prepare the papers, the trustee decides under the deed, and the decision is recorded in the trust’s files.

You, we and the trustee meet at set points rather than every week. Once the trust is settled, we suggest a review each year.

We also suggest one whenever your family or assets change. A marriage, a birth, a move to a new country or the sale of a business all count.

At that review the trustee confirms the assets it holds, and you can update your letter of wishes. The letter guides the trustee but does not bind it, so keeping it current is the simplest way to make your intentions clear.

Other roles are agreed in the deed. A protector, for example, can be given the power to approve key trustee decisions or to replace the trustee.

Your lawyer advises on who should hold each role and what you can retain without weakening the arrangement. Retained control is one of the first points checked.

Tell us what you are planning and we reply with what we need next.

The administration of existing Cook Islands structures can also move to us, with a Cook Islands trust company as trustee; our page on administration of an existing trust explains how a move works.

Tax and reporting

Tax follows the people, not only the trust. Your home country decides how it treats you as settlor or beneficiary, so your own tax adviser tells you what to file.

We give the adviser the draft deed and the asset list. The advice then rests on the real documents rather than a summary.

On the island side, the trustee keeps accounts and records and handles the filings that registration requires.

It may also report under the Common Reporting Standard, which a 2016 amendment to the Income Tax Act brought into island law. Which duties apply to your trust is a point your lawyer confirms for your case.

We collect the self-certification forms for the trust and any company it owns at the start, so reporting deadlines can be planned from day one.

We do not promise any tax outcome. A deed that looks efficient on paper can be taxed differently at home, which is why the adviser sees the documents before you sign.

For the wider picture of planning against claims, see our page on wealth structuring and asset protection.

Short answers to common questions sit on the plain-answers page.