Fraudulent Transfer Laws in the Cook Islands

Fraudulent transfer laws in the Cook Islands are primarily aimed at preventing individuals from unlawfully escaping creditors by moving assets out of their reach.

Under these laws, a transfer of assets is considered fraudulent if it is made with the intent to hinder, delay, or defraud creditors.

This is similar to the provisions found in many jurisdictions, but the Cook Islands offer a unique level of protection.

Criteria for Fraudulent Transfers

For a transfer to be deemed fraudulent in the Cook Islands, the creditor must prove that:

  1. The debtor transferred the asset with the actual intent to defraud.
  2. The creditor’s claim arose before the asset was transferred.
  3. The debtor was insolvent or became insolvent as a result of the transfer.

Statute of Limitations on Fraudulent Transfer Claims

One of the key benefits of a Cook Islands trust is that it has a short statute of limitations for fraudulent transfer claims.

Under the law, creditors must bring a claim within one year of the transfer or two years from when the transfer could reasonably have been discovered.

This period is shorter than in many other jurisdictions, providing a layer of security for those who establish trusts there.

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Burden of Proof

Cook Islands law puts the burden of proof on your creditor to demonstrate beyond a reasonable doubt (the highest standard of proof) that you transferred assets into the trust with the explicit intent to defraud that specific creditor.

Implications for Asset Protection

The limited timeframe for challenging transfers makes it difficult for creditors to collect on assets transferred to the trust.

Gideon Alper

About the Author

I’m an attorney who specializes in asset protection planning. I graduated with honors from Emory University Law School and have been practicing law for almost 15 years.

I have helped thousands of clients protect their assets from creditors. Before private practice, I represented the federal government while working for the IRS Office of Chief Counsel.