When you set up an Asset Protection Trust, I recommend that you make it an irrevocable trust in an offshore jurisdiction. The reason for this is because if the trust is revocable, then a court could order you to wind up the trust to pay your creditors in the event of a lawsuit. This would defeat the purpose of setting up the trust in the first place, namely, to protect your assets from creditors.

My preferred place to establish an Offshore Asset Protection Trust is the Cook Islands. If an irrevocable Asset Protection Trust is established in the Cook Islands, then a Canadian court has no authority to order a foreign trust to be wound up. If it did make such an order, the order would not be recognized or enforced in the Cook Islands.

If at some time in the future you decided that you no longer need the Asset Protection Trust, then you can voluntarily direct the Trustee to dissolve the trust. However, it must be voluntary. The Trustee will require an affidavit from you certifying that you are not dissolving the trust under circumstances of duress or pursuant to a court order. So even if a Canadian court ordered you to instruct the Trustee to dissolve the trust, the Trustee would be required under the terms of the trust to refuse.

If you are interested in establishing a Cook Islands Asset Protection Trust and would like a free initial discussion click here