Cook Islands: Sheltering Financial Risk with a Powerful History of Asset Protection

Providing more than just peace and tranquility for its tourists, the gorgeous Cook Islands can help you gain peace of mind by helping you to protect your assets.

Here at Global Wealth Protection,, we talk a LOT about laws initially written to protect us, but ones which in recent years fail to do any such thing.  We also happen to blog about systems which WON’T sell out the individual in the name of political expediency or judicial activism.  Ever hear the adage, “A friend will help you move, a best friend will help you move the body.”  Well, when it comes to asset protection, you want the latter.  You want the unshakeable “friend” who clams up and calmly replies, “What assets?” when interrogated.  When we think of safe havens for wealth, many default to Switzerland or the Cayman Islands… probably because those two get the most publicity in movies.   Turns out, deep in the South Pacific, due south of Hawaii, there exists an archipelago poised as your assets’ “best friend”: The Cook Islands.

The Backstory

While I hold no penchant for laws or legalities, this particular situation is an anomaly. The impetus behind the International Trust Amendment Act (ITAA) has its beginnings in American medical tort laws! In 1988, a group of U.S. attorneys watched as their medical practitioner clients got buried in onerous litigation proceedings.  They decided to collaborate with a Cook Island trust company, in hopes that trusts could be used as the mechanism to shelter the assets of these defendants, thus providing some protections in the event of otherwise devastating claims.

The passing of the ITAA is a testament to beautiful market forces!  Prohibitive laws in the U.S. beget a demand for an asset safe-haven, the Cook Islands provide a supply for said demand with nothing but economic advantages to gain from this arrangement, and voila!  Political and legal minds alike criticize it, but if imitation is indicative of flattery, then eight of the United States (who are sadly subject to the supremacy clause of the U.S. federal courts) and sixteen other countries adopted this act in one form or another.  While this offers some choice and competition, nothing touches the Cook Islands in terms of enforcement and protection.

Proof is in the Puddin’

Unlike the U.S. courts, where a lawyer need but perform a little semantic tap dance to get around any legal provisions which threaten to protect an individual, the Cook Island judges remain less than impressed with such demonstrations.

  1. Pacific Heritage Bank v Radke
    Radke establishes his trust in October of 1992 and defaults on his loan December of that same year.  PHB discovers his trust in January of 1994, and requests to collect from it.  They claimed the intent of that account was to deliberately defraud the bank.  With a one-year statute of limitations to bring such claims against a trust, the bank missed it by one year and three months. 

    PHB tried to manipulate the meaning of some of the verbiage in the statute, but, the judges held fast, and did not budge.

  2. The Irrevocable Trust: The Anderson Case
    In July of 1995 the Andersons set up a trust with a Cook Island trust company.  In May 1998, they were brought up on charges, whereby the Federal Trade Commission (FTC) requested an accounting and repatriation of all their assets. 

    In June 1998, the request was DENIED!  The trust company refused to comply with the request on the following grounds: a.) the trustees were under duress, whereby making them NO LONGER co-trustees of the trust and b.) to comply would be in direct violation of two clauses stipulated in the trust agreement; one of which prevents those NOT included as beneficiaries from acquiring any assets held in that trust.  Andersons are held in contempt of court and placed in jail.

    In July of 1998, Anderson makes a plea to the trust company that if he can get the consent of his children to repatriate the funds, will they comply?  Request, again, DENIED!

    In November 1998, Anderson’s lawyers decide to create a new trust, making the FTC the sole beneficiary and holder.  In December, they went to remove the funds, relieve the existing trust company as trustee, and make the other trust company the new trustee.  Request, DENIED, as invalid!

    Later in December, the Andersons tried to remove themselves as protectors, making the new trust the substitute protector.  Upon review, two things were determined: a.) the Andersons were in fact operating under duress, and b.) the purpose of the other trust was to benefit an excluded party (in this case the FTC, an administrative body).  Request DENIED!

    The FTC later tried to sue the Cook Islands to recover the assets, but the courts remained steadfast and refused on the grounds that they won’t entertain laws of foreign states.

  3. Bank of America v Weese
    In this case, the courts ultimately conceded.  However, the courts defended the trust initially against mere “allegations” of fraud.  They demanded, in accordance with the ITAA, that a strong case and a preponderance of evidence be provided to demonstrate intent to defraud by use of a Cook Island trust.  That burden was sufficiently met, but it demonstrates the onus upon anyone attempting to access a Cook Island trust, and the stalwart defense of these protections outlined in the ITAA.

Bottom line

  1. The burden of proof is on the ones after your money: beyond a reasonable doubt.  And the only grounds under which they will crack is fraud.
  2. Cook Island trust companies answer to Cook Island law.  With the exception of New Zealand, all other laws are not recognized by their courts.  Moreover, it all goes down in their courts, with their lawyers.  NO contingency fee counselors.
  3. If you are under duress, protocols are in place to where your trustee will NOT relinquish the funds.
  4. The costs associated with retrieving your funds through the Cook Island court system are prohibitive to mere “fishing expeditions”.
  5. Your assets will not be taxed.  The Cook Islands realize they stand to make more from your patronage, than from taxing your wealth.

Cook Island trust companies answer to Cook Island law. With the exception of New Zealand, all other laws are not recognized by their courts.

It’s one thing to have the laws, it’s another to have the authority to enforce it, and it’s still another to have judges with the courage to do just that.  Often imitated, but never duplicated, the Cook Islands meet all three criteria.  Please don’t think this is a praise to any state.  Like all governments, the Cook Islands are looking out for their own best interests and protecting their own reputation in being the best and most trust-worthy in offshore asset protection.  But where there is mutual benefit, a symbiotic relationship is possible.

Given the precedent and the stakes involved for the Cook Islands, they are contenders, if not deserving of “best friend” status, for your assets.  The Cook Islands offer such services as Limited Liability Corporations (LLC), International Business Corporations (IBC), and Asset Protection Trusts (APT).  The Cook Islands both understand and reap the benefits of defending individual wealth.  They deliver on a promise long forgotten and lost here in the United States.

For more info on how to best protect your assets, contact Bobby Casey at

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