Tenancy by the entireties (“TBE”) is a form of joint ownership which is created during marriage and which can only exist between spouses. Among the traditional legal characteristics of TBE is that one spouse cannot mortgage, sell or otherwise dispose of any portion of the property without the joinder of the other spouse, as the property is deemed to be owned by the marital unit and not by either spouse individually.
The APN has repeatedly warned our readers against so called “too good to be true” income tax reduction schemes involving offshore entities. In this issue we’ll see what recently happened in one such case.
The Andersons established a Cook Islands Trust and funded it with (among other assets) commissions earned in connection with marketing late-night water-filled dumbbells and similar products. The Federal Trade Commission (“FTC”) sought to freeze the Anderson’s assets (along with the assets of others involved in the program) and found, to its dismay, that it could not freeze the Anderson’s assets because they were safely tucked away in a Cook Islands Trust.
The new law abolishes the common law “rule against perpetuities”. This means that a “dynasty” trust can now be established in the Cook Islands. Thus, you can establish a trust in the Cook Islands which will continue indefinitely.
With this issue we begin a periodic review of selected offshore jurisdictions. These reviews will cover such factors as the legal system, the geographic location, communications facilities, availability of professional services, and other items we deem pertinent.