A trust has its origins in medieval England with the concept of dual ownership, the legal title to the property is vested in one person (the Trustee (s)) with beneficial ownership of the property being vested in another (the Beneficiary(ies)). The trust can hold title to assets and property, manage said assets in accordance with the trust deed, in order to provide benefits and distributions to persons or group designated as the beneficiaries.
A properly constituted and managed trust is the strongest asset protection vehicle worldwide.
The key to understand the functioning of the Trust is found in the English “Common Law” interpretation of property rights. An individual is able to divest themselves of legal ownership but retain an equitable or beneficial interest in the assets settled on the trust.
Why create an International Trust?
A International Trust is usually created by people who have accumulated reasonable assets and/or are in professions in which they are at risk of suffering lawsuits such as entrepreneurs, doctors, dentists, architects, property developers and marketers, with assets (tangible or intangible) to protect, and also for people who seek to plan their taxes in advantageous jurisdictions or just to ensure financial security in retirement, inheritance and succession planning.
International Trusts provide complete and absolute confidentiality.
It is extremely difficult, except in circumstances of accusations of severe criminal offense, for an outsider to pierce the confidentiality shield a surrounding a International Trust.
Forming a International Trust ensures substantial protection for assets from scrutiny, tax, and civil legislation.
What assets can be held in a International Trust?
- Investment portfolios
- Bank deposits
- Shares and stocks
- Real and intellectual property
- Other types of assets
Asset Protection is about resolving uncertainty.
Back in 1989, Southpac Trust took the initiative that first brought clients modern asset protection trust legislation. Effective, tested, and accepted, Cook Islands trust law is the best available and remains the defining model legislation upon which clients and advisors rely. Likewise, Nevis has implemented legislation modelled after Cook Islands law.
While there will always be a place for domestic planning, establishing a International Trust in the Cook Islands, Nevis or New Zealand provides a level of security and certainty for family and business assets not achievable under domestic law.
Our offices in New Zealand enable us to provide enhanced trust services. New Zealand enjoys a broad tax treaty network and sterling reputation for business, and its hybrid trust law permits New Zealand-based trusts to reference favorable Cook Islands asset protection trust law.
Insurance is Not Enough.
In many countries, and particularly in the United States, the volume of litigation is increasing exponentially. The permitted practice of contingency fee attorney representation, the availability of punitive damages awarded by juries, and the absence of a “loser pays” rule for expenses provide strong financial incentives to sue regardless of the merits of a claim.
Insurance is becoming more expensive or unavailable in many instances, and insurance companies are scrutinizing claims more closely to minimize payouts. Many professionals and executives face the prospect of personal liability for catastrophic damage awards.
Achieve Certainty By Going Private.
Among the statutory protections available by going international are provisions limiting the ability to enforce foreign judgments against a Cook Islands, Nevis or New Zealand International Trust, a prohibition that is constitutionally not possible between states in the U.S. Punitive damage awards are not enforceable at all in the Cook Islands. Very stringent evidentiary and procedural rules apply to any claim against a International Trust, and strict confidentiality laws help ensure the privacy of your arrangements.
How to Choose Nevis or Cook Islands?
In large part, the Cook Islands and Nevis International Trust jurisdictions provide the same benefits. Additionally, both jurisdictions have stable governments and economies. They are also common law jurisdictions with the Queen of England as their sovereign. Southpac Trust’s application procedure, charges and set up time are the same for both jurisdictions. From receipt of full information from the settlor and provided the settlor’s due diligence information is in order, a International Trust in either jurisdiction can be established within 24 hours. International Trusts in either jurisdiction are managed by a team of qualified, experienced and competent Southpac Trust staff.
It’s often what the jurisdictions don’t have in common that is the deciding factor for settlors. For instance, do you want a trustee who operates in a similar time zone as you (Nevis for US residents)? Or, would you prefer a jurisdiction that’s more remote so as to deter creditors (the Cook Islands)? Do you want to establish your trust in the jurisdiction that pioneered International Trusts law (the Cook Islands)? Or would you prefer a Caribbean jurisdiction?