CREDITOR’S BIG CATCH FOILED: COOK ISLANDS TRUST PROTECTS SETTOLOR’S ASSETS
A Landmark Case in Asset Protection
The courts of the Cook Islands have thwarted a creditor’s attempt to seize a settlor’s assets, further solidifying the jurisdiction’s reputation for providing robust asset protection.
The Case: Branch Banking & Trust Co. v. Hamilton Greens
A creditor, Branch Bank & Trust Co., attempted to prove that the settlor, Mr. Bellinger, had established a trust with the intention of defrauding them. The creditor claimed that Mr. Bellinger’s transfers of approximately $1.7 million into the Cook Islands trust were made with the sole purpose of avoiding his financial obligations.
The Court’s Ruling
However, the court found that the burden of proof lay with the creditor to demonstrate beyond reasonable doubt that Mr. Bellinger intended to defraud them specifically. Additionally, the court required the creditor to prove that the transfer of assets left Mr. Bellinger insolvent, unable to fulfill their claims.
The Outcome
In a significant blow to the creditor’s case, the court found that there was insufficient evidence to prove either intention or insolvency. The court ruled in favor of Mr. Bellinger, determining that his main motive for establishing the trust was to preserve assets for retirement purposes, rather than to defraud creditors.
Highlights of the Cook Islands’ Approach to Asset Protection
- Creditors must meet a high burden of proof before accessing a settlor’s assets
- The International Trust Act of 1984 provides strong protections for settlers
- Settlers must prove insolvency in relation to the specific creditor bringing the suit
A Testament to Effective Asset Protection
The “Bellinger” case serves as a testament to the effectiveness of Cook Islands trusts in protecting assets from creditors. With thousands of previously adjudicated cases supporting its reputation, the jurisdiction remains a popular choice for individuals seeking robust asset protection.
Conclusion
The courts of the Cook Islands have once again demonstrated their commitment to protecting settlors’ assets, providing a safe haven for those seeking to safeguard their financial security. This landmark case further solidifies the Cook Islands’ reputation as a trusted destination for asset protection.