Private Trustee

Reuben Tylor

Reuben Tylor is a barrister as well as a principal of Cook Islands Trust Corporation Ltd, and pioneered the Cook Islands asset protection legislation.

A New Twist on Private Trustee Companies

A private trustee company can provide savings, control, and privacy for clients who prefer not to place their assets with a trustee company owned by a financial institution. This article looks at how these entities operate in the Cook Islands.

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ost offshore jurisdictions require a grantor to appoint a licensed trustee company to act as trustee of an offshore trust if the trust is to be domiciled in that jurisdiction. In some jurisdictions, however a client may form a separate offshore company (a private trustee company) for the special purpose of acting as trustee of his or her trust or trusts, instead of appointing a licensed offshore trustee company. There are many situations where it may be advisable for a client to form a private trustee company. The Cook Islands has special provisions ensuring that private trustee companies are easy to establish and operate, as well as being effective. Most importantly, in the Cook Islands there is no need to form a separate purpose trust to hold the shares of a private trustee company, as the different forms of corporate ownership of a Cook Islands offshore company make this extra entity unnecessary.

Often the only licensed trustee companies giving the client the security of being owned by a financial institution are exposed in jurisdictions such as the United States because of their worldwide links. The alternative of placing assets under control of an individually owned trustee company may not be comfortable for the client or his advisers, nor can this risk be negated by fidelity insurance. Some clients may not even want to disclose the affairs of their trust to the staff (often expatriate) of a licensed trustee company, particularly where the information is politically sensitive. Finally, where a trust or...