Cost to Set Up an Offshore Trust

How Much Does It Cost to Set Up an Offshore Trust?

On average, establishing a Cook Islands trust costs roughly $10,000 to $25,000 upfront, with ongoing annual fees of about $3,500 to $6,000 for trustee services and maintenance. More complex cases or premium providers can push initial costs into the $30,000+ range (some estimates even cite $25,000–$40,000 or higher).

By contrast, alternative jurisdictions like Nevis or Belize offer cheaper trust setups (sometimes as low as $5,000–$8,000 to establish, with $2,000–$4,000 per year in fees).

What Is an Offshore Asset Protection Trust?

An offshore asset protection trust is a trust formed under the laws of a foreign jurisdiction specifically to shield assets from creditors and lawsuits.

A Cook Islands trust is the most common example: it’s a self-settled irrevocable trust established in the Cook Islands (a small South Pacific nation) and is renowned for its strong legal barriers against foreign judgments. The key is that a licensed offshore trustee located in the jurisdiction (e.g. Cook Islands) manages the trust assets. Because U.S. courts lack direct authority there, assets in a Cook Islands trust are extremely difficult for U.S. creditors to reach, offering a high degree of protection.

Offshore trusts like these typically require more administration and legal oversight than domestic trusts, which is why their costs are higher.

For context, a domestic asset protection trust in the U.S. might cost only $1,000–$5,000 to set up, whereas a foreign trust ranges around $5,000–$25,000+.

Initial Setup Costs for a Cook Islands Trust

Upfront fees make up a large portion of the cost to establish an offshore trust. For a Cook Islands trust, initial setup costs typically range from $10,000 on the low end to $25,000 or more for complex situations. Some providers even quote common setups around $20,000–$40,000. This upfront expense covers several components:

• Legal Fees and Trust Drafting: A qualified asset protection attorney must draft the trust deed and related documents tailored to your needs. This legal work is often the biggest component of the setup cost. In many cases, the attorney’s fees for creating a foreign trust fall around $15,000–$30,000 just for the legal drafting and planning. In simpler cases it could be ~$10k, while highly complex plans can incur $30k+ in legal fees.) These fees pay for crafting the trust terms, ensuring compliance with Cook Islands law, and coordinating any ancillary structures.
• Incorporating an LLC or Other Entities: Often, a Cook Islands trust is paired with an offshore LLC (e.g. a Nevis LLC) owned by the trust to hold bank accounts or investments. The cost to form and register such an LLC is usually not included in the initial package.
• Trustee Acceptance and Due Diligence: The Cook Islands requires using a licensed trust company or trustee based there. Trustees typically charge an initial acceptance or setup fee to take on a new trust. This may cover due diligence checks (know-your-customer/anti-money-laundering compliance) and opening the trust account. Depending on the provider, the initial trustee fee and compliance processing can range from a modest $2,500 up to around $7,500 for standard cases. In very complex situations with extensive background reviews, additional legal review fees might apply – in rare cases, thorough reviews have added anywhere from $1,000 to $30,000+ to the cost, though such extremes are not typical for most clients.
• Government or Registration Fees: Unlike some jurisdictions, the Cook Islands does not require public registration of the trust deed, preserving privacy. However, there may be government filing fees for ancillary steps (for instance, if the existence of the trust or an LLC must be recorded). These are usually a small portion of the cost (a few hundred dollars). In Nevis, by comparison, the government charges an initial registration fee of only a couple hundred dollars for a trust, which illustrates that most of the setup expense is for professional services rather than government costs.
• Bank Account Setup: If part of establishing the trust involves opening an offshore bank account under the trust or its LLC, there may be bank-related setup fees or minimum deposit requirements. Some trust companies include bank account opening in their package. Others may require a separate deposit (for example, trust companies might ask for a minimum asset deposit like $100,000 to fund the trust as part of the setup). While not an out-of-pocket “fee,” this minimum funding is a consideration for clients (you need sufficient assets to make the trust effective).

Overall, the typical Cook Islands trust setup cost (including all the above) is often quoted around $20,000–$30,000 for an average client scenario. It can be lower if using a budget provider or simpler trust (some trusts have been set up for as little as ~$10k) and higher for more complicated cases (involving rush service, very high asset values, or multiple layers of entities).

Most clients will fall in the lower end of the range and do not need special add-ons that increase the costs.

We charge clients $15,000 to create an offshore trust. Larger law firms charge more, often $20,000 to $40,000 for an offshore trust plan. There are also trust companies—not law firms—whose primary business is to sell offshore trust packages. We have found their fees to start in the range of $20,000 to $25,000 for an offshore trust.

Factors That Influence Setup Cost

Several factors can drive your offshore trust’s setup cost higher or lower:

• Trust Complexity: A simple trust (few beneficiaries and straightforward terms) is cheaper than one with multiple beneficiaries, intricate distribution provisions, or custom asset management instructions. More complex trusts require more drafting and planning time, increasing legal fees.
• Amount and Type of Assets: Larger asset transfers or complex asset types (e.g. businesses, real estate, intellectual property) can raise costs. Protecting many millions in assets might involve more extensive legal structuring and due diligence, whereas a trust funded with a few hundred thousand in cash is simpler. Higher asset values may also incur higher initial trustee fees or require additional entities (each with its own cost).
• Attorney/Provider Experience: Highly experienced asset protection attorneys or firms often charge a premium for their expertise. You’re partly paying for their track record of success. Less experienced providers might quote lower fees (but could be more prone to errors, which in this field can be very costly down the line). However, some providers charge for inclusions that most people do not need.
• Scope of Trustee Involvement: While the trustee’s ongoing role is mainly an annual cost, if your trust will require the trustee to perform extra initial work (for example, helping restructure asset ownership or coordinate multiple account openings during setup), the trustee’s fees at inception could be higher. Generally, though, trustee fees are spread out annually (covered below) and the initial cost is mostly legal fees.

By understanding these factors, you can gauge why one client’s offshore trust cost $15k and another’s cost $25k+. Each case is unique.

Annual Trustee and Maintenance Fees

After the upfront establishment, ongoing costs are required to keep the offshore trust in good standing each year. The primary recurring expense is the trustee’s annual fee. In the Cook Islands, a licensed trustee company must administer the trust, and they charge for their services. Annual trustee fees typically range from about $3,000 up to $10,000 per year for a Cook Islands trust.

Simpler trusts with minimal activity might be on the lower end ($3k–$5k), while a trust that requires more active management or complex accounting could incur towards the higher end ($8k–$10k). These fees cover the following ongoing services:

• Trust Administration: The trustee handles day-to-day management of trust assets according to the trust deed. This includes maintaining trust records, holding assets securely, facilitating any distributions to beneficiaries, and ensuring the trust’s terms are followed.
• Compliance and Reporting: Offshore trustees must ensure the trust complies with Cook Islands regulations and international standards (like anti-money-laundering laws). Annual filings or renewals may be required to keep the trust legally active. The trustee’s fee often includes handling these formalities, such as any government renewal fees. (Government annual fees in the Cook Islands are relatively modest, especially compared to the trustee’s professional fees – they typically amount to a few hundred dollars or so as part of the maintenance.)
• Registered Agent and Office: The trust must maintain a local registered office and agent in the jurisdiction. The trustee company usually fulfills this role, and their fee covers providing a local office/address for the trust and any required agent services.
• Communication and Support: Throughout the year, the trustee will correspond with the settlor (you) or any trust protector, providing updates or seeking approval for certain actions. They may also coordinate with your lawyers or accountants as needed. This general administration is part of the annual charge.

If the trustee must perform extraordinary tasks beyond the routine (for example, facilitating frequent asset transactions, or responding to legal challenges), they might bill additional hours separately. Many trustee companies have an hourly rate for non-standard services.

For most clients, though, a single all-inclusive annual fee covers normal administration. Frequent trading or complex asset management by the trust could thus increase costs.

In addition to the trustee fee, you may encounter a few other recurring costs:

• Trust Protector Fee (if applicable): Some offshore trusts appoint a trust protector – an independent party who oversees the trustee and can veto or direct certain actions. A protector is optional but common in Cook Islands trusts for added security. If you use a professional protector (rather than, say, a family friend serving for free), there is usually an annual fee for that service. Protector fees are often in the range of $500 to $2,000 per year, depending on the duties. This would be on top of the trustee’s fee.
• Accounting and Tax Reporting: While the Cook Islands itself has no taxes on trust income, U.S. persons with offshore trusts have IRS reporting obligations. You’ll likely need a CPA to file an annual trust tax return (IRS Form 3520/3520-A) and possibly an FBAR if foreign accounts are over $10k. The cost for these accounting services is usually modest – perhaps a few hundred dollars to a couple thousand per year, depending on complexity. Budget maybe $500–$1,500 a year for tax prep, more if the trust’s assets generate lots of taxable income that needs reporting.

To summarize the ongoing maintenance costs: for a typical Cook Islands trust, expect roughly $5,000–$10,000 per year in total upkeep (trustee + filings + other incidentals). Some trusts can be maintained for closer to $3k/year if minimal, while very large trusts might be above $10k/year if using top-tier services.

By comparison, jurisdictions like Nevis and Belize have lower annual fees (often in the ~$2k–$4k range, as discussed later). But in all cases, remember that maintaining the trust is an essential part of keeping your asset protection in force – failing to pay annual fees could result in the trust lapsing or the trustee resigning.

Banking, Compliance, and Asset Transfer Costs

Aside from the formal setup and trustee fees, there are other ancillary costs to consider when establishing and using an offshore trust:

• Banking Fees: An offshore trust typically comes with one or more offshore bank or brokerage accounts to hold the assets. Banks will charge standard fees for transactions. For example, wiring money into the trust or out to a beneficiary will incur wire transfer fees – often around $50 to $100 per wire (exact amount varies by bank). If the trust holds accounts in foreign currencies, currency exchange spreads may effectively cost you a small percentage when converting funds. Maintaining the account itself might have monthly maintenance fees if balances are below a threshold, though many international banks waive fees for large accounts. It’s wise to confirm the banking fee schedule; while not huge in the context of a trust, these costs can add up with frequent activity.
• Currency Exchange Considerations: Some people use offshore trusts to diversify into other currencies or international investments. While not exactly a “fee,” exchanging USD into a basket of foreign currencies involves conversion rates that can work for or against you. As one commentary pointed out, you must keep exchange rates and currency conversion costs in mind if moving wealth into different denominations via the trust. Additionally, if the trust will move money across borders regularly, foreign exchange fees might be applied by banks or brokers.
• Asset Transfer and Title Changes: Funding the trust means moving your assets into it. Cash and securities are straightforward (just wire to the trust’s account, incurring the wire fee as noted). For real estate or other titled assets, you may need to retitle the asset into the name of an offshore LLC owned by the trust. This can incur local costs – for instance, recording a new deed, paying any deed transfer taxes or fees in the property’s jurisdiction, etc. If you transfer property, you might also pay an attorney to handle the conveyance. These costs vary widely depending on the asset and locale (they are not specific to the offshore trust itself, but rather incidental costs of moving assets). If transferring a business interest, you might have filing fees or taxes due on that transfer as well.
• Compliance Costs: As part of setting up the trust, the trustee will conduct due diligence on you (the settlor) and the source of funds. Sometimes, if the situation is complex, they might require a deeper investigation or external legal opinions. Typically, a basic due diligence/KYC is included in the trustee’s setup fee, but if there are unusual compliance requirements (for example, multiple layers of ownership or international business assets that need vetting), there could be extra compliance charges.
• Insurance or Trustee Indemnity Fees: Some trust companies charge a small annual trustee indemnity fee or bond premium to cover their risk in acting as trustee. This might be a few hundred dollars or a percentage of assets. Most firms do not charge this explicitly; it is part of the trustee fee.
• Optional Services: You might also voluntarily engage additional services for your trust. For example, you could hire an independent investment advisor or asset manager for the trust assets, which would have its own fees. Or you might pay for legal opinions for reassurance on certain transfers, etc. These are case-specific and not required, but worth mentioning. If you anticipate needing ongoing legal advice beyond routine maintenance, factor in those hourly legal fees as well.

In summary, miscellaneous costs like bank fees, compliance checks, and asset transfers are relatively minor in comparison to the big-ticket expenses (legal setup and trustee fees). They might amount to a few hundred dollars here and there. However, they’re part of the full picture of maintaining an offshore trust.

For example, transferring $500,000 into your trust account might incur $50 in wire fees, and annual tax form preparation might be $1,000 – small percentages of the asset protection investment.

Cost Comparison: Cook Islands Trust vs. Nevis Trust vs. Belize Trust

When considering offshore trusts, cost can vary significantly by jurisdiction. The Cook Islands is often viewed as the gold standard for asset protection trusts – and it also tends to be the most expensive option. Other jurisdictions, such as Nevis (part of St. Kitts & Nevis in the Caribbean) and Belize (Central America), offer similar asset protection trusts at lower price points. Here’s a comparison of typical costs:

• Cook Islands Trust: Initial setup roughly $10,000–$25,000 for most cases (sometimes up to ~$40k for complex situations), and annual fees about $3,000–$6,000 on the lower end, up to $10,000 for larger trusts. As discussed, some U.S. firms charge even more (into five figures) given the Cook Islands trust’s premium status. The higher cost aligns with the Cook Islands’ unparalleled legal track record in fending off creditors. This jurisdiction has decades of case law supporting its trusts, making it the most battle-tested choice for asset protection.
• Nevis Trust: Nevis trusts present a more cost-effective alternative. Typical formation fees range around $5,000 to $8,000 and annual maintenance around $2,000 to $4,000. The basic legal setup in Nevis can be even lower – for instance, Nevis trust legal expenses might start around $4,000 for a simple trust. Annual trustee fees in Nevis are also lower, often cited in the $1,000 to $5,000 per year range, reflecting more modest hourly rates and lower overhead for Nevis trust companies. In fact, Nevis has minimal government fees (around $225 initial registration and $220 annual renewal by law) so most costs are professional fees. Why cheaper? Nevis’s asset protection trust law is strong, but the jurisdiction is newer (less established case law than the Cook Islands), and the market for trusts is competitive, which keeps provider fees down. Many clients with moderate wealth opt for Nevis to save on costs, accepting the slightly greater legal uncertainty compared to Cook Islands. Nevis trusts are still considered effective, but the island’s legal system hasn’t been tested to the same extent by U.S. creditors.
• Belize Trust: Belize is another popular offshore trust jurisdiction known for affordability. Setting up a Belize trust typically costs about $4,000 to $7,000 initially, with yearly fees in the ballpark of $2,000 to $3,000. These figures represent using local providers and standard scenarios. For example, one Belize trust company advertises a complete trust formation for about $2,900 USD (inclusive of trustee acceptance, registration, etc.) and an annual fee of $1,800 USD thereafter. This underscores just how low the entry cost can be in Belize with the right provider. However, if you engage a U.S. law firm to create a Belize trust with comprehensive services, the price can rise closer to Cook Islands levels. Some attorneys note that first-year costs for a Belize trust can range $15,000 to $50,000 (including legal work), with $5,000–$10,000 annual maintenance for a fully managed structure. In other words, Belize can be done cheaply, but a full-featured asset protection plan in Belize might still cost five figures. Belize’s asset protection trust law (the Belize Trusts Act) offers strong features like non-recognition of foreign judgments and a short statute of limitations on fraudulent transfer claims, similar to Cook Islands law. But Belize’s court precedent and trust industry are less established, and its banking options are somewhat more limited. Thus, Belize is often chosen by those who prioritize cost savings and are willing to be slightly more on the “experimental” side compared to the well-trodden Cook Islands path.

Bottom line: If budget is a primary concern, Nevis and Belize trusts provide much lower entry and maintenance costs than a Cook Islands trust. The Cook Islands justifies its premium pricing with a long history of success in asset protection, a well-developed trustee industry, and strict privacy laws. For many clients, that reputation is worth the extra cost – especially if substantial assets or serious risks are involved. On the other hand, for those with more modest assets, the cost difference can be a deciding factor. It’s possible to start with a Nevis or Belize trust at a fraction of the Cook Islands price, and still gain a level of offshore protection far beyond a domestic trust. The “best” jurisdiction often comes down to balancing cost vs. legal strength for your situation.

Is an Offshore Trust Worth the Cost?

For many individuals concerned about preserving wealth from lawsuits or creditors, the cost of an offshore trust is justified by the peace of mind and legal security it provides. A Cook Islands trust, while expensive, offers what is arguably the strongest asset protection available – once assets are in the trust for a certain period, creditors face an uphill battle to even challenge it, often having to litigate in the Cook Islands under unfavorable conditions. This level of protection can make the five-figure annual expenses worthwhile if you have substantial assets at risk or a high liability profession.

That said, offshore trusts are not just for millionaires or billionaires. They can be valuable for moderately wealthy individuals, too – for instance, a successful physician, business owner, or landlord who might have a few million in assets and significant lawsuit exposure. Many such clients are not “ultra-rich” but decide that spending say $20k upfront and $5k a year is a reasonable insurance policy against losing their nest egg in one unlucky courtroom verdict. The key is to weigh the cost against the potential loss if you don’t have the protection. If you’re facing a possible multi-million-dollar claim, a $25k trust that helps thwart that claim is clearly worth it.