How Much Does an Offshore Trust Cost?
An offshore asset protection trust typically costs $20,000 to $25,000 to establish and $5,000 to $10,000 per year to maintain. The total depends on jurisdiction, whether the structure includes an LLC, and the complexity of the assets being transferred.
Setup Costs by Jurisdiction
| Component | Cook Islands (Trust Only) | Cook Islands (Trust + LLC) | Nevis | Belize |
|---|---|---|---|---|
| U.S. attorney fees | $15,000 | $20,000 | Included | Included |
| Trustee establishment fee | $5,000 | $5,000 | Included | Included |
| LLC formation | N/A | ~$900 | N/A | N/A |
| Total | ~$20,000 | ~$25,000–$26,000 | $12,000–$18,000 | $10,000–$15,000 |
The attorney fee covers all legal work: consultations, risk analysis, trust deed drafting, trustee coordination, due diligence preparation, and funding guidance. There are no separate foreign legal fees. If the structure includes an LLC, the fee also covers the operating agreement and entity formation.
Not every structure needs an LLC. The LLC adds a management layer that lets the settlor retain practical control during normal circumstances. For straightforward liquid portfolios, a trust-only structure may be sufficient.
Annual Costs
| Component | Cook Islands | Nevis | Belize |
|---|---|---|---|
| Trustee administration | $3,300–$5,000 | Included in total | Included in total |
| U.S. tax compliance (Forms 3520, 3520-A, FBAR) | $2,000–$4,000 | $2,000–$4,000 | $2,000–$4,000 |
| Banking and custodial fees | $500–$1,500 | Included in total | Included in total |
| Total | $5,800–$10,500 | $4,500–$9,000 | $4,300–$8,500 |
Trustee fees cover fiduciary oversight, regulatory filings, recordkeeping, and routine correspondence. U.S. tax compliance is a separate expense that does not vary by jurisdiction—any foreign trust triggers annual filing of Form 3520, Form 3520-A, and FinCEN Form 114. CPAs experienced in foreign trust reporting charge $2,000 to $4,000 per year for these filings. Penalties for late or incorrect filing start at $10,000 per form.
The Form 3520 and 3520-A filings are the most complex, requiring coordination between the U.S. CPA and the offshore trustee. The FBAR is filed separately with FinCEN and carries the harshest penalties for noncompliance.
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Why Jurisdictions Cost Different Amounts
The Cook Islands costs more because it has the longest litigation track record, the most restrictive creditor challenge standards (beyond a reasonable doubt, with a one-to-two-year statute of limitations), and the deepest market of licensed institutional trustees. These features have real operating costs.
Nevis and Belize cost less because their trustee markets are smaller, their regulatory frameworks are leaner, and their litigation histories are shorter. The leading offshore trust jurisdictions differ primarily in how aggressively their statutes reject foreign judgments and how much institutional infrastructure supports enforcement defense.
When the Cost Is Justified
The structure makes sense when non-exempt assets exceed $500,000, litigation exposure is real and recurring, and domestic planning tools have been evaluated and found insufficient. For Cook Islands trusts specifically, the practical floor is closer to $1,000,000. Below that threshold, Nevis or Belize may provide proportionate protection at a lower price.
The cost is easiest to justify for physicians facing malpractice exposure beyond policy limits, real estate developers with construction defect risk, and business owners with personal guarantee exposure.
When It Does Not Make Sense
An offshore trust is unnecessary if total liquid assets are below $300,000, if there are no current or reasonably anticipated creditor threats, if the primary concern is estate planning rather than asset protection, or if domestic tools can address the risk. The disadvantages of offshore trusts—cost, complexity, and compliance burden—outweigh the benefit when exposure does not justify the investment.
Evaluating Providers
Qualified U.S. attorneys charge $15,000 to $25,000 for setup. That fee includes substantive risk analysis, customized drafting, and accountability for the structure’s enforceability. Providers quoting $5,000 to $10,000 for a Cook Islands trust are typically using template documents, skipping the fraudulent transfer analysis, or earning referral fees from the trustee company.
Two questions to ask any provider: Do you earn commissions or referral fees from the trustee company? Will you tell me if I do not need an offshore trust?
What an Offshore Trust Does Not Save
An offshore trust does not reduce U.S. income taxes. The IRS treats it as a foreign grantor trust, meaning all income flows through to the settlor’s personal return. The trust adds reporting obligations, not tax benefits. The value is exclusively asset protection and settlement leverage.
All offshore trusts share this tax treatment regardless of jurisdiction. The mechanics are the same whether the trust is in the Cook Islands, Nevis, or Belize: an irrevocable transfer to a foreign trustee, grantor trust reporting, and annual IRS filings. Cook Islands trust costs follow a similar structure but reflect that jurisdiction’s higher trustee and compliance fees.
