Added: Malika Preble - Date: 03.03.2022 23:18 - Views: 12335 - Clicks: 5414
It's in the same time zone as Hawaii and is about as far south of the Equator as Hawaii is north of it. For people who live in Australia and New Zealand, the Cooks effectively are Hawaii—a winter getaway with beaches, sun and Polynesian hospitality—but on a smaller scale. The main island of Rarotonga has just 10, inhabitants.
After tourism, the most important industry for the Cook Islands is trust administration. In other words, the country is a getaway location not just for tourists escaping the cold, but for wealthy people seeking shelter from lawsuit hazards, estate-tax exposure, and the variable rules in the US and Canada. The islands were named after the British explorer and cartographer Captain James Cook, who encountered them in Inthey were declared a British protectorate, primarily to freeze out the French, who had occupied Tahiti, hundred miles away.
Inthey became a colony of New Zealand. Then, inthe Cook Islands became an independent country in free association with New Zealand. Today, Cook Islanders are effectively dual nationals. The government is a parliamentary democracy with the Queen as the nominal head of state. The government in Wellington handles most international relations matters for the Cook Islands, although the Cooks have direct arrangements with 30 foreign governments.
For a of reasons, the Cook Islands might deserve a central role in for your plan for internationalization—particularly for asset protection and estate planning. Some planners rate it the world's best jurisdiction for an international trust. It's a big plus to get a boots-on-the-ground perspective of the Cook Islands, so I'm excited to bring you my conversation with Terry Coxon, who recently made his eighth visit there.
With decades of experience, Terry is an expert on using international trusts and is exceptionally qualified to give us the straight story. Nick Giambruno: Welcome, Terry. Glad to get your report on this important topic for International Man readers. Terry Coxon: My pleasure.
I never pass up a chance to talk about international trusts. They are the most powerful, yet underused, of all the financial planning arrangements IM readers and like-minded people may hear about. Nick: First, please explain why we should care about some tiny, faraway islands? What do the Cook Islands offer that other offshore jurisdictions don't? Terry: When I tick off the factors that protection-minded investors are looking for, Cook Islands keeps coming up One.
Its law for international trusts is the best, most protective in the world. Its law for limited liability companies dovetails with the trust law perfectly. It depends on the US for nothing. Costs are reasonable. And the country is socially very healthy; the Cook Islanders truly are what the Hawaiian tourist industry wants you to think Hawaiians are.
Nick: As you say, the Cook Islands have become known as one of the best asset protection jurisdictions in the world. Why is that exactly?
I've heard that the country doesn't recognize the rulings of foreign courts. Terry: That's right. If someone wanted to pursue you in a Cook Islands court, he would have to go there, start from scratch, and prove his case. He couldn't simply enforce a judgment from a court in the US or Canada. But that's really a minor point, because if you're using the Cook Islands for asset protection, you probably won't own much of anything in your own name there. You'll use a trust to hold the assets you want to protect. In that case, what would matter is Cook Islands trust law, and for someone who wants to escape the lawsuit explosion in the US, that law is the best in the world or, from the point of view of an attacker, the most difficult in the world.
Under the Cook Islands International Trusts Act, you can establish a trust that your future creditors can't reach, even if you've included yourself as one of the beneficiaries. And provided that funding the trust didn't leave you insolvent, no creditor can have your transfers to it set aside as a fraudulent conveyance. Anyone who might try to do so would have to prove beyond a reasonable doubt —as in a murder trial—that you had settled the trust in order to frustrate his then-existing claim against you. But the order wouldn't compel the LLC to make a distribution before the LLC's Manager wanted to, so getting a charging order isn't much of a prize for a shareowner's creditor.
All it means is that the creditor gets to wait for the LLC to make a distribution — and in such a circumstance, he should expect to wait a very long time. What are your thoughts on the Cook Islands ing FATCA, the implications for its attractiveness as an offshore jurisdiction if it does, and on financial privacy there in general? Terry: The Cook Islands is a sovereign nation. It's not a satellite of New Zealand.
And the Kiwi government has no interest in or stomach for strong-arming any of the island jurisdictions in its neighborhood the way the US sometimes deals with its neighbors in the Caribbean. What's more, the many Cook Islanders resident in New Zealand are voters there. The financial institutions there are a different matter. Because FATCA has no implications for asset protection, the trust companies like virtually all trust companies in offshore jurisdictions are ing on. They may complain about needing to, but they shouldn't, since FATCA increases the long-term advantage of using an international trust to protect family wealth.
Compliance with the measure demands full information about US taxpayers—and no information about foreigners. Now consider what happens after the lifetime of any American who protected his assets with an international trust: The trust completely disconnects from the US tax system. It lawfully can be silent and invisible. It can have the privacy that is forbidden to you and your survivors personally. FATCA has important implications for any American who wants to take the risk he might win an orange jumpsuit of not reporting his income from foreign investments, but it does nothing to undermine the asset-protection power of an international trust.
Why couldn't the US prevail upon New Zealand to press the Cook Islands to close financial s and disclose personal information? Terry: That one is not on my list of things to worry about, for the following reasons:. It is foolish for anyone in the US to base any plan on the assumption that the US government won't find out. The prudent assumption is that sooner or later all the details of your financial life will come to rest in a government computer—if they haven't done so already.
If your plan somehow adds to your privacy, that's to the good. But if your plan depends on privacy, you should get a new plan. When the US government wants to know something about your finances, they don't need to squeeze any financial institution in the Cook Islands or anywhere else. It's much easier for them to make up an answer and send you the giant tax bill it implies. Then it will be up to you to present information disputing the bill, with criminal penalties for straying from the truth. If you are serious about protecting your wealth, forget about secrecy, and use a Cook Islands trust with the understanding that it is deed to work in the light of day.
If the trust is competently administered, you can post a copy of it on Facebook, and the assets will still be safe. Nick: How does one even get to the Cook Islands?
Is it necessary to actually travel there to take advantage of its internationalization options? Air New Zealand operates a hour, non-stop flight from Los Angeles directly to the main island of Rarotonga. It leaves LAX late on Sunday night. The return flight leaves Rarotonga late the following Saturday night. So, plan to spend a week… unless you want to continue on to Australia or New Zealand.
Nick: Is the nation's economic stability completely dependent upon New Zealand? What are your thoughts on the local economy, the nation's fiscal situation, and the stability of the financial system? Terry: Cook Islanders use New Zealand currency.
The economy depends very much on tourism from Australia and New Zealand. Hard times in either country would hurt the Cook Islands economy. That's one of the reasons the government is earnest in supporting the trust industry, to improve the economy's diversity. Terry: Cook Islands is an important center for trusts and for company formation, but it is not an international banking center. Banking choices are limited. Trusts and LLCs hold most of their assets through banks and brokers in other jurisdictions. Nick: What do the Cook Islands offer for people looking to make a lifestyle real estate investment?
Is living there a realistic option for someone looking to get off the grid?
Tell us a little about the islands' infrastructure and the culture of the people who live there. Terry: The country is like a small town. On Rarotonga, there are two supermarkets and an assortment of small retail outlets.
There is one television channel, unless you subscribe to the premium service, which would get you five. Public transit consists of two buses that operate 16 hours per day on the road that circles the island. They pass each other once an hour somewhere between the Rarotongan a nice resort with a nice beach and Pacific Resort an even nicer resort, with a lovelier beach than most people will ever enjoy.Out of Cook Islands seeking some nsa
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