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Cook Islands Trusts

WHO SHOULD HAVE AN OFFSHORE TRUST

People who have worked hard for their financial rewards, and who want to keep their assets secret and out of reach of lawyers and lawsuits or seizure by government agencies:John Ewing Seminar Tax Reduction/Accounting with Joe Craft

  • Anyone paying high premiums for liability insurance
  • Anyone with a high net worth
  • Anyone facing a costly divorce
  • Anyone who is the potential target of a lawsuit
  • Artists, inventors, and holders of copyrights, patents, or trademarks
  • Professionals and small business owners
  • Individuals who need to keep their financial affairs private
  • Professionals working abroad
  • Companies selling products abroad

THE COOK ISLANDS

John Ewing Seminar Welcome to the Caymans
A Cooks Islands Trust provides for the most powerful asset protection globally. The Cook Islands are situated South of the state of Hawaii. It boasts the dominant asset protection trust case law history on the planet. It is not a matter of theoretical protection. Every case in which it has been put to the test it has provided protection for the assets of the client.

TAKE STEPS TO LOWER YOUR TAXES

IncorporateCourts have ruled time and again that people can plan their affairs so as to pay the minimum amount of tax possible and the taxpayer may use any legal means to do so. Americans ventured into the world of offshore a bit late in the game, nearly forty years after the rest of the world had capitalized on the financial advantages of moving assets offshore. The fact is that it is still both legal and quite simple for U.S. citizens to shelter their wealth offshore and to accumulate tax-deferred profits.

Our accounting firm can handle your complete tax filing requirements and we will file the appropriate IRS forms with the Internal Revenue Service to make sure that you have reported all of your income abroad as is required of every U.S. citizen and U.S. corporate taxpayer.

The best way to protect your assets is not to own any...only if you own an asset is it vulnerable to attack.


Cook Islands Asset PRotection Trusts

Over the past 15 years the Cook Islands has become the foremost jurisdiction for establishing off-shore trusts and is now recognized as the world leader in formation of asset protections trust, safeguarding the assets of high net worth clients. Cook Islands law contains a number of unique features that make the operation of an asset protection trust administratively friendly and highly protective. In addition, it deals with a number of current issues in trust law giving the Cook Islands considerable advantage over other offshore jurisdictions in general offshore trust work.

One of the practical and flexible solutions given by Cook Islands trust law is the ability to include provisions allowing a trust to retain shares in underlying companies, without concern as to the financial benefits of holding such shares. Similarly a trust may include provision negating the trustee's responsibility to monitor and intervene in the affairs of an underlying company. These features allow a trust to hold family businesses, or other investment companies, that clients amy want to retain for generations to come. Or which are intended to hold risky or speculative investments. The Trustee is not required to become involved in the decision making or management of the companies, which role can be left to the family members and trusted management.

Also of interest to many clients not used to dealing with an offshore trustee company, is the ability to utilize a private trustee company in the Cook Islands. In this structure the client, and/or advisors, are the shareholders and directors of a Cook Islands company which acts as the trustee of their Cook Islands Trust. The client gains the comfort of being his own trustee of their Cook Islands Trust. The client gains the comfort of being his own trustee, the flexibility of management of the trust, and yet still retains the benefits of Cook Islands trust law.

What are the unique features of Cook Islands' trusts?
  • Foreign judgments are unenforceable against a Cook Islands International Trust if that judgment is inconsistent with Cook Islands law.
  • Specific provisions ensure a trust is not defeated by rules relating to heirship or spendthrift beneficiaries in the jurisdiction of the settlor.
  • A settler of a trust is able to retain control over the trust and its property if desired.
  • Foreign bankruptcy rules are specifically excluded.
  • A specific limitation period of two years exists for the bringing of proceedings by creditors seeking to access trust assets.
The statute provides statutory definitions of what does not constitute a fraudulent transfer. If a transfer of an asset to a trust occurs more than two years after the date a creditor's action took place, it is not fraudulent.

  • Bank Secrecy - The British Virgin and Cayman Islands, to name a few, prohibit the disclosure to a third party of information pertaining to a client's affairs without the client's express written permission under strict penalty of law.
  • Major Financial Center - The British Virgin and Cayman Islands are the largest offshore financial centers in the Caribbean, with more than 600 banks and trust companies, and the headquarters for branches and subsidiaries of many large, international financial organizations. There are no restrictions on the movement of investments, corporations, or trusts into or out of these regions.
  • Promote services and market goods world wide with virtually no restrictions using an International Business Corporation (IBC.
  • Be both a borrower and a lender. You may choose to borrow money from an IBC or be the mortgage holder on your house or any other real estate. The borrower can make payments directly to the offshore IBC bank account and deduct the interest as an expense. Your IBC can purchase and lease equipment to your domestic company making all lease payments tax deductible.
  • Purchase or lease real property outside the country of formation. Also lease personal property like automobiles, boats, office equipment, etc., allowing you to move these items out of your name for asset protection.
  • Operate as a trading company to set up an internet business offshore, advertise products on the web, take orders, and complete the fulfillment from the offshore locations.
  • Use your IBC as a marketing, consulting, legal, or financial services company rendering services to U.S. based businesses. Invoices from the IBC are submitted to your domestic corporation and are paid directly to the IBC's offshore bank accounts.
  • Issue multiple classes of stock with complete secrecy.
  • There is no requirement that any officer or director be a shareholder in the IBC and a nominee officer can be set up to open offshore IBC bank and stock brokerage accounts.
  • Another IBC may serve as an officer and director of an IBC.
  • Corporate books may be maintained outside the country in any place owners so choose.
  • NO taxes on any IBC if the corporation does not conduct business in the country of its incorporation, exclusive of banking or other financial transactions.

CONCLUSION

Many asset protection experts agree that an offshore trust in the properly selected jurisdiction is the strongest asset protection vehicle worldwide. The Cook Islands Trust has been shown to offer the strongest asset protection case law history. When a local court demands payment, the trust company in the Cook Islands, located outside your local court's jurisdiction, is not obligated to comply with the court order. Thus, the licensed, bonded, insured 30+ year old trust company keeps your assets out of harm's way. For client peace-of-mind we establish an offshore limited liability company (LLC) that is 100% owned by the trust. The client is the manager of the LLC. The accounts are held in the LLC in a very safe international bank. The client is the signatory on all bank accounts. Assets are not subject to seizure by the courts and the trustee can step in as the manager of the LLC and do what you have paid the trust company to do - protect your assets. Once the legal threat passes, the client is restored as manager of the LLC with the assets still intact. The Cook Islands trust has protected client assets from every legal challenge.

STOP BEING A TARGET FOR
MONEY-HUNGRY LAWYERS

Joel Johnson found himself under attack by several collection agencies who had succeeded in getting judgments against him and his partners in Federal Court. That U.S. federal judge had no power to seize the liquid assets of his IBC.


A COOK ISLANDS TRUST IS THE ONLY CHOICE FOR MAXIMUM PROTECTION

The Cook Islands is highly regarded for its "Asset Protection Trusts" legislation, which has since inception been adopted by many offshore centers. The Cook Islands boasts a strong judicial precedent, which sets it aside from it's competitors.

A GROWING FORM OF ASSET PROTECTION

Below are several reasons why the Cook Islands legislation makes the Cook Islands the offshore jurisdiction of choice. These include:

  • Entities established within the offshore jurisdiction are exempt from any form of taxation in the Cook Islands including stamp duty, capital gains tax and capital duty
  • Strong confidentiality provisions apply in the offshore regime, requiring government officials as well as trustee company and bank employees to observe strict secrecy. These provisions are backed by penal sanctions. The statutory records of the Registrar of International & Foreign Companies and of the Registrar of International Trusts are not open for general search, subject to the provisions of the Financial Transactions Reporting Act 2004, the Proceeds of Crimes Act 2003, and the Mutual Assistance in Criminal Matters Act 2003.
  • The Cook Islands is highly regarded for its "Asset Protection Trusts" legislation, which has since inception been adopted by other offshore centers. The Cook Islands boasts a strong judicial precedent, which supports its asset protection legislation.
  • An international trust has no taxation liability in the Cook Islands and no requirement to file any returns, reports, or records.
  • An international trust allows the Settlor to retain or acquire; a power of revocation of the Trust; a power of disposition over Trust property; a power to amend the Trust Deed; and to retain an interest in the Trust property.4rust Deed; and to retain an interest in the Trust property.




Case Story #4:
The New York Broker

Paul Winters was a successful investment banker in Manhattan. He quickly built up a large personal investment account but was worried over government interference and employment litigation due to some of his highly speculative decisions. Anything could go wrong.

He formed a Nevada Corporation, transferred his funds to Nevada, and then formed an International Business Company (IBC) and opened up brokerage and bank accounts in the Cayman Islands. He still had use of the funds and his IBC could easily make the same investments in the United States but now nothing was in his name. In addition, he transferred and re-titled all of his existing bank and brokerage accounts in New York into his offshore corporation. This allowed him the comfort of leaving funds in the United States while still having the ability to transfer his funds at a moments notice to 'safer waters.'

Multiple LLCs into Offshore Company

WHAT IF YOU ARE FACED WITH A LAWSUIT

What if you are faced with a lawsuit? Do not be fooled - even if you are innocent, that does not mean the courts are on your side. Jurors often side with the plaintiff who appears to need the funds in question rather than the defendant who they assume has money to spare.

Even a judge's own personal feelings or politics can put you in jeopardy. Read the following outrageous quote below:

"As long as I am allowed to redistribute wealth from out-of-state companies to injured in-state plaintiffs, I shall continue to do so. Not only is my sleep enhanced when I give someone else's money away, but so is my job security, because in-state plaintiffs, their families, and their friends will re-elect me."
- Chief Justice Richard Neely, West Virginia Supreme Court

If you act NOW it's not too late to shield your assets from plaintiffs and their attorneys. Clients are happy to learn that there is still a lot they can do to protect their assets.

JUDGMENT-PROOF YOUR ASSETS TO AVOID RUINOUS LAWSUITS

This is how a Cook Islands Trust works: A court in your area says, "Give us the money." So, you put together a letter and mail it to the trustee. You inform them that your local judge has ordered you to bring back the funds. The trustee is required to follow the instructions provided in the Cook Islands Trust document. The asset protection trust states that the trustee is prevented from letting the funds out of the trust when the beneficiary is acting under force from the courts. So, the trustee, who resides outside of your local court's reach, refuses to comply. You are not in trouble because you are willingly obeying the judge's order and asking the trustee to bring back the funds. You're in an "impossibility to act," position which is certainly valid for a legal defense.

By forming a Cook Islands Trust you create a legal entity to hold assets, do business and shelter the identity of the beneficial owners. None of the investigative agencies which help trial lawyers, ex-spouses, ex-business partners and creditors locate the wealth of the defendants they want to sue will be able to find your sheltered accounts and assets. This makes you a poor prospect for a lawsuit.

WITHOUT ASSET PROTECTION YOU COULD LOSE EVERYTHING

  • Nine out of ten lawsuits in the world are filed in the United States
  • If you own a business or practice a profession you have a one chance in three of being named a Defendant in a lawsuit in the next year, and it will only get worse. It is estimated that there are over 100,000 law school students in school right now.


The strongest asset protection for which the trust provides is for cash held in a safe foreign bank account. The courts where you live have the ability to seize local real estate. Therefore, it is fine to place real estate inside of the LLC that is owned by the trust. Alternatively, you record a lien against property where the lien is payable to the LLC inside of the trust.


advanced planning

Complete privacy with flow through. A disregarded income and no tax returns required when offshore LLC, real estate and New Mexico LLC's are owned by the following:

  • Nevada LLC
  • Nevada Corporation
  • Nevada LLLP with Trusts
  • Endowment Foundation (501(c)(3))
  • Self-Directed IRA
The New Mexico LLC has many privacy advantages and can be manager of all LLCs and the Offshore LLC. The effect is to have no ownership and no exposure.










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