How to find the best country and jurisdiction for an offshore trust. The Cook Islands comes out as the best.
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Next in sorting for the right jurisdiction, there’s a broad category we can strike from the list—countries that didn’t inherit the English legal tradition. Trusts are a creature of that tradition and its principles of equity. Those principles both allow and compel a trustee to exercise prudent judgment and to consider all relevant facts and circumstances when it acts. Some civil law jurisdictions have enacted statutes that attempt to simulate English legal principles of equity but with results that are not entirely satisfactory. They can leave you with a trustee that acts more like a robot than as a thoughtful and accountable decision maker.
There’s a separate reason for preferring the English-law jurisdictions. Even though your hometown lawyer may not be acquainted with any of them, he’s trained in the same legal tradition. He can read their statutes and understand what those laws would mean to a judge in the jurisdiction. That allows you to get advice from the sources you already know you can rely on. And—another big plus—the laws and the trust instrument you’re considering using will be written in English.
Restricting the candidates to countries that follow the English legal tradition disqualifies some places, such as Switzerland and Panama, that you might imagine would be suitable. Both countries are excellent choices for certain things—Switzerland for storing gold and other investments, and Panama for a bank account or an international company—but neither is a good choice for a trust.
That reduces the list to:...'