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Contact Kehr Law today
Phone: (619)400-4942
Text Message: (619)823-8230
Email: dan@kehrlaw.com

SETTLEMENT AND ADMINISTRATION OF AN OFFSHORE INTERNATIONAL ASSET PROTECTION TRUST (COOK ISLANDS)

The following is intended to provide you as the Client with a general outlook of the settlement and administration of the foreign trust once we begin the International Asset Protection Trust process.

Preparation

The Local Trustee Services Company will work with Kehr Law to draft a Trust Agreement to suit your personal needs.  Kehr Law will advise and instruct Local Trustee Services Company throughout the drafting, settlement and funding stages of your international asset protection trust.  Kehr Law will likely include specific tax and estate planning considerations, or specific requests regarding distributions and beneficiaries. The Local Trustee Services Company and their attorneys will review the trust agreement and ancillary documents to ensure it provides for the maximum benefit under Cook Islands law.

During this process Kehr Law will be discussing the optimum structure for holding the assets in detail with the Local Trustee Services Company. All parties will obtain a clear understanding of what assets are to be contributed to the Trust, and how those assets are to be held. Decisions include whether there will be a domestic trustee, whether a domestic entity will be used (such as an LLC or Corporation), if so in where it will be formed, whether offshore bank accounts are required at the outset, etc.

Kehr Law will work with you to gather the required information and complete the necessary questionnaires.

The Settlement

We will review the Trust Agreement carefully with you to ensure that you understand its provisions and are comfortable with how it works. The settlor(s) will then settle the Trust by executing the Trust Agreement, and transferring the initial (often nominal) assets to the Trust. The settlor(s) also sign an affidavit of solvency at this time. Subsequently, the Trust Agreement will be sent to the Local Domestic Trustee who will also sign the Trust Agreement.

The original Trust Agreement, affidavit of solvency, and initial documentation are sent to the Local Domestic Trustee. The Local Domestic Trustee signs the Agreement as foreign trustee and registers the Trust in the Cook Islands. A full package of completed documentation is returned to our office.

Transferring the Assets

This stage will depend entirely on the particular structure and the particular assets to be contributed to the Trust. This is the main funding of the trust structure. Steps undertaken at this stage can include:

1. Formation of local or foreign entities to be owned by the Trust
2. Creation of bank accounts for the Trust (whether foreign or domestic)
3. Transfer of property to the Trust by the settlor(s)
4. Funding of bank and/or investment accounts
5. Transfer of property to the underlying entities

Ongoing Administration

This is often overlooked, but is just as crucial as the settlement of the Trust itself.

We have identified five key requirements for proper and efficient trust administration:

1. The trustees must keep formal records of all trustee decisions;
2. A domestic trustee must keep the foreign trustee service informed of any actions they have taken and provide them with copies of any documents they have signed on behalf of the trust;
3. The trustees must keep basic financial records for the trust;
4. The trustees should ensure that any tax reporting requirements are met. This will involve Kehr Law and your CPA who will work together to file tax returns on behalf of the Trust; and
5. All trustees must be kept informed about any potential liabilities, litigation, or events that may impact on the trust or be a threat to the trust assets. Such threats may be against the settlor(s), their business, against a beneficiary of the trust, or against a third party.

Annual Renewal of Registration

A Cook Islands Trust obtains the protection of Cook Islands law by virtue of being registered in the Cook Islands. The registration must be renewed annually in order to maintain this protection.

The foregoing information provides you with general information concerning the events to occur in the near future in the formation of your International Asset Protection Trust in the Cook Islands. We look forward to assisting you and providing guidance throughout the process. Feel free to contact this office should you have any questions.

Contact Kehr Law today
Phone: (619)400-4942
Text Message: (619)823-8230
Email: dan@kehrlaw.com

See other Kehr Law practice areas including: Business Law, Estate Planning, Real Estate, Wills, Trusts, Corporations, Contracts, and Asset Protection.